FINDINGS/DECISION JUSTICE (RETD.) MUNIR A. SHAIKH, FEDERAL TAX OMBUDSMAN- The complainant company is registered with the Sales Tax Department vide Registration No. 0202511108373. The complainant is aggrieved by non issuance of sales tax refund alongwith surcharge admissible under Section 67 of the Sales Tax Act, 1990. The facts of the case are briefly stated as under:--
2. The complainant purchased a lot of 746 bales of imported Raw Cotton through auction from Collectorate of Customs (Appraisement), Karachi. The complainant submitted refund claim for the tax period December, 1998 which included sales tax of Rs. 7,00,336/- paid on purchase of imported cotton. The Collector Sales Tax Refund/Enforcements declined to allow refund and passed Order- in-Original bearing No. 11/2002, dated 10.1.2002. The said order was challenged by the complainant before the Customs Excise and Sales Tax Appellate Tribunal, Karachi. The Tribunal passed Order on 3.4.2004 and set aside the aforesaid Order-in-Original and remanded the case to the jurisdiction of Assistant Collector/Deputy Collector Sales Tax Refund, Karachi with the directions to complete necessary verifications and thereafter dispose of the refund claim on merit in the light of C.B.R.'s letter, dated 17.4.1999 within 90 days from the date of judgment. The Deputy Collector Refund VII passed the Order-in-Original bearing No. 451, dated 6.7.2006 under which the show-cause notice, dated 29.11.2001 was vacated and allowed refund of Sales Tax of Rs. 7,00,336/-. The respondents however did not make, payment of surcharge under Section 67 of the Sales Tax Act, 1990 on the plea that the same was not admissible in the case, It is alleged that the Collector of Sales Tax Refund/Enforcement had been delaying the refunds of Sales Tax for one or the other reason since December, 1998 and therefore the Surcharge @ 14% per annum was payable to the complainant. It is contended that final notice in this regard was served upon the respondents but they did not make any response so far. This amounted to maladministration. The complainant has prayed for issuance of directions to the respondents to allow the refund of Sales Tax alongwith compensation for delayed refund admissible under Section 67 of the Sales Tax Act, 1990.
3. The respondents have forwarded the parawise comments of Collector Customs (Appraisement), Karachi and Collector of Sales Tax and Federal Excise (Enforcement), Karachi. The Collector (Appraisement) has confirmed that a Certificate No. 98, dated 24.11.1998 was issued by the Assistant Collector (Auction) that Sales Tax of Rs. 7,00,336/- had been deposited as shown in computer record of the Custom House, Treasury under the head of account (Sales Tax 0220000).
The complainant was asked to approach the Collectorate of Sales Tax for the refund/input adjustment of Sales Tax amount under the Sales Tax Act, 1990. The allegation of maladministration has been vehemently denied.
4. The Collectorate of Sales Tax and Central Excise (Enforcement) have reported that the Refund Division made all efforts to redress the grievances of the complainant on receipt of the claim but was unable to sanction the said claim because input tax documents i.e. Sales Tax Invoice (domestic purchase) and Bill of Entry (imported goods) prescribed under Section 7 of the Sales Tax Act, 1990 were not produced by the complainant. Further more Sales Tax receipt/bill of auctioned goods produced by the claimant did not show the amount of sales tax charged separately in the light of C.B.R.'s letter, dated 17.4.1999. The claim was therefore rejected under Order-in-Original No. 11/2002, dated 10.1.2002. The complainant filed appeal, under Section 46 of the Sales Tax Act, 1990 against the aforesaid Order-in-Original before the Customs, Excise and Sales Tax Appellate Tribunal, Karachi Bench-ll. The Tribunal set aside the impugned Order-in-Original and remanded the case to the Jurisdiction of the Assistant Collector/Deputy Collector of Sales Tax refund with the directions to make complete verification within 60 days from the date of judgment and dispose of the refund claim on merit. The Deputy Collector (Refund-VII) vide Order-in-Original No. 451 of 2006, dated 6.7.2006 vacated the show-cause notice, dated 29.11.2001 and allowed refund of Sales Tax of Rs. 7,00,336/- to the complainant, It is stated that cheque for refund was issued on 13.7.2006. Lt is contended by the respondents that further payment of surcharge under Section 67 of the Sales Tax Act, 1990 was not applicable in the case till the investigation of the claim was completed. The claim was under process of adjudication in the light of judgment of the Sales Tax Appellate Tribunal. The respondents have prayed to reject the complainant's claim of surcharge as the amount of refund has already been sanctioned after the completion of legal proceedings under the Sales Tax Law.
5. The case has been discussed with the representatives of both the sides. The Departmental Representative contended that no- claim of compensation/surcharge was pending with the Department. The A.R! Of the complainant pleaded that the Collector of Sales Tax Refund/Enforcement, Karachi, was requested to issue the refund of Rs. 7,00,336/- alongwith delayed surcharge under Section 67 of the Sales Tax Act, 1990 vide his application, dated 24.5.2006.
The copy of the said, application has been filed alongwith the complaint.
6. The perusal of records shows that the complainant's claim of compensation under Section 67 of the Sales Tax Act, is still pending with the department. No order on his application, dated 24.5.2006 has been passed so far without any reason/justification. This constitute? Maladministration and the following recommendation is therefore made:--
(i) The C.B.R, to direct the concerned officer of Sales Tax Department to dispose of the complainant's claim of compensation linder Section 67 of the Sales Tax Act, 1990 within 30 days of the receipt of this order and compliance be. Reported within a week thereafter.