LAHORE: The sales tax department is violating the limitation period of five years for issuing show cause notices to taxpayers in default after obtaining permission from the Federal Board of Revenue (FBR) for condoning of such delay, said sources.

According to the sources, the Board was not authorised to suppress statutory limitation periods protecting assesses against the initiation of action against them by the tax authorities.

They said the expiry of the limitation period accrues a vested right in favor of taxpayers. However, the department believes that since the controversy in such matters involves tax frauds, therefore, limitation period can be condoned in the larger interest of revenue generation.

However, waiving or ignoring of the limitation period in the case of tax fraud is unprecedented and cannot be allowed under the Sales Tax Act. Also, they pointed out that the relaxation extended by the Board also fails to state any tangible reason for waiving the limitation period and issue a show cause notice against taxpayers.

All such permissions lack fairness and transparency in exercise of statutory discretion by the Board, suffers from opacity and therefore unreasonable.

Copyright Business Recorder, 2023