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ISLAMABAD: The Lahore High Court (LHC) has directed the Federal Board of Revenue (FBR) to explain why the verified and determined income tax refund along with additional payment for delayed refund has not been paid to a public limited company.

In this regard, the LHC has issued an order.

The LHC order said that it is contested by the company (Fauji Foods Limited) that the Large Taxpayer Office Lahore and Centralized Income Tax refund Office FBR are under obligation to release the verified and determined refunds to credit of petitioner to the tune of Rs 285,383,802 along with additional payment for delayed refunds as provided under Section 171 of the Income Tax Ordinance, 2001, but the needful is not being done without any justification. The petitioner has further submitted that impugned inaction is absolutely illegal and without lawful authority.

Let notice be issued to FBR with direction to file report and para-wise comments, so as to reach the LHC by the next date of hearing on March 19, 2024, the LHC order added.

The company objected that, “the state cannot be allowed to unnecessarily withhold the funds of the taxpayer, not only because of its own fault but also through an intentional effort on the part of state functionaries by violating principles and doctrine of “unnecessary enrichment” which could not be allowed to happen in terms of Articles 4, 8, 10, 25 and 10A of the Constitution.

The cost of the petition may be imposed on the respondents for their intentional delay in releasing/issuing the refund to the company.

The Tax department may be directed to immediately release the verified and determined refunds to the credit of the petitioner to the tune of Rs 285,383,802 along with additional payment for delayed refunds as provided under Section 171 of the Income Tax Ordinance, 2001, the company added.

The company requested the FBR to credit the already determined refund of Rs 285,383,802 to the account of the petitioner as already declared in the taxpayer profile of the petitioner. However, till date, there has been no response from respondent department and the taxpayer has been deprived of its lawful property.

The non-issuance of a valid and determined refund of the petitioner by the department is not only illegal but is also infringing upon petitioners’ fundamental rights protected under the Constitution and the precedents set by the higher courts, petitioner added.

Copyright Business Recorder, 2024

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