' DR. MUHAMMAD SHOAIB SUDDLE (FEDERAL TAX OMBUDSMAN).---This complaint is against non- issuance of Sales Tax Registration Number (STRN).
2. The complainant, a (Pvt.) Ltd. Co. With NTN 2819205-2 incorporated in 2008 and a successor concern to AOP by the same name, renders embroidery services and is not liable to pay sales tax.
However, in order to be able to import machinery for its own use, it filed an application online for ST/FED registration on 30-9-2011. All information sought by the Deptt. In the context of the application was furnished between October, 2011 and May, 2012. Spot visit by the concerned ACIR and his staff was also made in May, 2012. Thereafter, the complainant received a notice from the ACIR intimating that its application for sales tax registration was misconceived as it was already registered for sales tax purposes at STRN 0307581000828 and it had the status of a non-filer. The Deptt. Directed that missing sales tax returns be filed along with penalty @ Rs,5,000 for each month of default as well as default surcharge. The Company clarified that the cited STRN was that of the predecessor AOP and not that of the successor Company and that the predecessor AOP not having done any business since 30-6-2008 was not required to file sales tax returns for the subsequent periods. However, as a matter of abundant caution, nil returns were filed for the sales tax periods 07 of 2008 to 08 of 2012. As STRN was not issued, the complainant filed a complaint before the Hon'ble FTO.
3. When confronted, the Deptt filed a reply contending that Messrs Rahila Imtiaz NTN 0400824-3 and Mr. Sadaqat Ali NTN 1008587-4, Directors in Aiman Ramsha Embroiders (Pvt.) Ltd., were also partners in the AOP by the same name. The AOP, an existing registered sales tax person, did not file sales tax returns after 30-6-2008 and was directed to file thc missing returns and also pay penalty assessed at Rs,5,000 for each month the default lasted. The complainant filed the returns but did not pay penalty or default surcharge. Pending full compliance of its directions by the AOP, the Deptt. Did not issue STRN to the Company by the same name as the AOP.
4. Both sides have been heard and the relevant record examined.
5. After examining the record and going through the reply filed by the Deptt. It was evident that the Deptt did not issue STRN to the complainant only because the defunct AOP by the same name as the complainant's Company did not pay penalty and default surcharge for the sales tax periods for which returns were filed belatedly. Under the law, the complainant is a distinct corporate entity quite apart from the defunct predecessor AOP and cannot be denied a STRN as it needed the same in order to be able to import machinery for its own use. Denial of the same has prevented the Company from importing machinery and conducting its business effectively. So far as the defunct AOP by the same name as the Company is concerned, the Deptt must deal with it separately.
Saddling it with sales tax liability by way of penalties and default surcharge when it was evident that it did not transact any business after 30-6-2008 and made no taxable sales and also filed "Nil"
Sales Tax Returns in the period 2008 to 2012 is arbitrary and oppressive.
Findings:
6. The delay in issuance of STRN to the Complainant Company is tantamount to maladministration under section 2(3)(ii) of the FTO Ordinance.
Recommendatioons:
7. FBR to-
(i) allow ST/FED registration to the Complainant Company, in accordance with law; and
(ii) report compliance within 21 days.