Firms with huge tax liabilities: FBR trying to ascertain reasons for disappearance

The Federal Board of Revenue is making an attempt to ascertain reason for sudden disappearance of certain companies with huge tax liabilities from the face of the earth, whose addresses were available with the department.
Sources told Business Recorder here on Thursday that the FBR has introduced a new policy in the field formations to mop up untraceable companies and units having pending sales tax liabilities, but it is astonishing that the concerned tax officials were now unable to trace the units.
These registered companies liable to tax suddenly disappeared and they are not traceable by the department at given addresses due to reasons best known to them. Sources said that as per section 2(25) of the Sales Tax Act, 1990, a person liable to be registered, but who is not registered, is to be treated as a registered person. Therefore, any amount determined to be outstanding against a person for the period, when he was not registered is recoverable from him. Such liability, however, should be determined after due process in accordance with the law, such as after audit or investigation and adjudication or assessment. In case a unit becomes untraceable before such a determination can be made, the field formations would have to follow the procedure given by the FBR.
Regarding untraceable units or where the address is not complete, sources said that a fact finding inquiry should be carried out by the regional tax authorities. The fact-finding inquiry would determine how a unit once traced out became untraceable or whose present address is not fully known or is incomplete.
In case the inquiry pinpoints failure in performance of duty on part of any officials, necessary disciplinary action should be taken. The department will take up matter with the external auditors for settlement of the audit objection (untraceable companies), if any. If, however, no such lapse is pointed out and despite best efforts such a unit still cannot be traced out, the matter may be closed and taken up with external audit for settlement of the audit objection.