Sales tax officials have committed gross violations of "reward rules", including unjustified grant of cash reward of Rs 1.004 million during 2004-2005.
The auditor general of Pakistan has highlighted these violations in the audit report of 2004-2005 committed by Collectorates of Sales Tax, Lahore and Rawalpindi causing huge loss to the national exchequer.
According to the report, a reward was framed in light of decision of Federal Tax Ombudsman (FTO) against Order-in-Original No176/92 in case of M/s Pan Islamic Industries.
The Collectorate of Sales Tax, Lahore sanctioned erroneously a reward of Rs 396,166 whereas a reward of Rs 39,166 was admissible. This resulted in irregular/excess sanction of reward of Rs 357,000.
The case was pointed out to the department in 2005. The same was also discussed in departmental account committee (DAC) meeting held in November 2005. The DAC directed the Collectorate to review this case and inform the Audit by November 28, 2005.
However, sales tax department has so far taken no action in this regard. In another case, the CBR's reward order of 1998 has allowed reward to officers and staff of the sales tax department on detection of sales tax evasion.
The Rawalpindi Collectorate sanctioned two cases for reward of Rs 258,792 and Rs 388,605 on 8th and 9th June, 2004, respectively against a routine case of late filing of returns by the Utility Stores Corporation (USC) of Pakistan. This is a government organisation and has no mala fide intention in concealing their sales.
In fact non filing of returns by USC was depicted by the Collectorate's computer data cell on which the Collectorate initiated an audit to justify for reward of Rs 647,397, which was not admissible.
The irregularity was pointed out by the Collectorate in June, 2005 and to the CBR in September, 2005. The case was discussed in DAC meeting on November 21, 2005 in which the Audit reiterated its contention that the government organisation against which reward was claimed had no mala fide intention in concealing sales tax. The Collectorate requested for some time to re-verify position in this regard after going through details of the case. No further progress was intimated.