FINDINGS MUSHTAQ AHMAD SUKHERA, FEDERAL TAX OMBUDSMAN.----This is an own motion investigation initiated while exercising powers conferred under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 to investigate irregularities committed by the FBR field formations in processing and sanctioning of bogus sales tax refunds during the period 2011-14 identified by Directorate General I&I IR of FBR. The Red Alerts in such cases were issued to the field formations concerned but neither any action was initiated against the fake claimants and their connivers in the Deptt, who were involved in bogus registration; processing and sanctioning of fraudulent refund and issuance of refund cheques, nor was any action proposed against the related officers/officials of bank branches concerned and PRAL management.
2. In the case of M/s Sajida Enterprises STRN 170039248619, a Registered Person (RP) engaged in the manufacturing of paper and paperboard, the investigation conducted by I&I-IR Karachi, revealed that: i) the RP was registered on 12.03.2012 and filed refund claim of Rs. 4.082 million for the tax period March 2012; and ii) the input tax claimed by the RP from Messrs Sajjad and Brothers and M/s Knit Corn for the tax period March 2012 was bogus and the refund created on this basis was also fake.
3. Thus, Red Alert was accordingly issued by the Directorate of I&I-IR Karachi vide letter dated 16.06.2012 for verification whether registration requirements was fulfilled and initiating statutory proceedings against the RP for claiming bogus refund.
4. Comments of the Secretary, Revenue Division, Islamabad were sought in terms of Section 10(4) of the FTO Ordinance read with Section 9(1) of the Federal Ombudsmen Institutional Reforms Act, 2013. In response thereto, the Commissioner-IR, Zone-IV, RTO-II: Karachi submitted para-wise comments vide letter dated 30.12.2019. It was contended that proceedings under section 21(2) of the Sales Tax Act, 2012 were initiated and the RP was suspended vide order dated 18.09.2012 and subsequently blacklisted on 03.07.2013. It was further informed that the Deptt. did not process the refund claim filed by the RP IA for the tax period March, 2012.
5. Averments of the Deptt. considered and case record perused.
6. It is noted that the Directorate was of the view that entire input claimed by the RP during the month of March 2012 from Messrs Sajjad and Brothers and Messrs Knit Corn International was bogus. From the perusal of the tax profile of the RP, it emerged the no refund was processed by the Deptt.
7. In view of supra, as the matter was promptly attended by the Deptt. upon receipt of the Red Alert no maladministration can be attributed to the Deptt. The investigation is accordingly, closed. File be consigned to record.