DECISION /FINDINGS The complainant is a Public Company having its registered office at 2nd Floor, Noor Chamber, Robson Road, Karachi and its Mill is at Dhabaji Industrial Area, District Thatta. The company is an existing assessee on N.T.N. 13-7-0818469 of Circle-7 of Companies Zone-II Karachi.
2. It is alleged that the complainant had paid Rs.2,51,72,148 during the year ending 30-6-2000 by way of advance tax under various provisions of deductions but the same were not given credit on completion of relevant assessm ent. The complainant therefore, made an application under section 156 of the Income Tax Ordinance, 1979 on 28-6-2001 for rectification of the mistake apparent from the records. The Assessing Officer passed rectification order under section 156 on 8-8-2001 creating refund of Rs.2,16,99,797 but the cheque was issued for Rs.1,27,75,798 only retaining illegally a sum of Rs.89,23,999.
3. It is further alleged that the complainant applied for issuance of balance amount of refund vide letter, dated 22-11-2001 explaining therein its financial difficulties in running the business, but no response was given by the respondents.
4. The case was fixed for hearing on 13-3-2002 and the above-cited representatives of the complainant and the Department appeared. The Departmental Representatives also produced the relevant records which have been examined.
5. The respondents have also filed para-wise comments vide Letter No.5371, dated 7-3-2002. It is mainly contended therein that since the complainant has filed Constitutional Petition No.D- 2516/2001, dated 11-12-2001 on the same issue, the present complaint is not maintainable.
6. The complainant in his affidavit, dated 26-1-2002 had stated that the Constitutional Petition No.2516 of 2001 filed in the Honourable High Court, Sindh, Karachi would be withdrawn on 31-1-2002 or on the date of hearing of the petition. The complainant had withdrawn the aforesaid Constitutional Petition and a certified copy of the order of the Honourable High Court Sindh, dated 26-2-2002 has been furnished in this behalf. The objection of the respondents stands removed and the complaint is disposed of on merit.
7. The complainant in its application for rectification under section 156, dated 28-6-2001 stated that after adjustment of assessed taxes, an amount of Rs.2,56,41,134 was refundable to the company. It was further stated as under:--- "Out of this we intend to adjust outstanding demand of Sales Tax amounting to Rs.89,23,999 for w ich a separate request letter will be submitted by us to you in du course."
The complainant's A.R. In para. 5 of the present complaint has conceded that the aforesaid separate letter was never issued to the respondents regarding adjustment of outstanding Sales Tax Demand. The respondents have contented in the para-wise comments that the part of the refund amounting to Rs.89,23,999 was retained for adjustment against Sales Tax liability of the complainant. This was specifically mentioned in the refund order and the relevant portion is reproduced as under:- "Keeping in view the assessee's specific request vide para. 2 of this refund letter, a refund of Rs.1,27,75,798 being issued. The balance of Rs.89,23,999 is being withheld for partial verification and adjustment against sales tax liability of the assessee".
8. It is further contended by the Departmental Representatives that instead of making an application for adjustment of refund against sales tax liability the complainant company, filed a Constitutional Petition on the same issue before the Honourable High Court of Sindh, Karachi.
9. The A.R. Of the complainant has stated that due to delay in issuance of refund the complainant- company had cleared its sales tax liability by obtaining loan from the bank and at present there is no outstanding sales tax demand rather an amount of Rs.18,24,848 is refundable to the complainant by the Sales Tax Department. A photocopy of sales tax return filed with the concerned department has been furnished in support of this contention.
10. In the circumstances discussed above the contention of the Departmental Representatives that the delay in issuing the balance amount of refund was due to non-submission of application as promised by the complainant in its letter, dated 28-6-2001, carries weight. The complainant's A.R.
Has also conceded that no maladministration was committed by the respondents in retaining an amount of Rs.89,23,999.
11. Notwithstanding the facts stated above, the complainant's representative have vehemently contended that in the absence of any application from the company for adjustment of refund against sales tax liability and any order passed by the Assessing Officer under section 103 of the Income Tax Ordinance, 1979, the balance amount of refund should have been paid by the respondents.
12. In view of the above it is recommended that---
(a) the refund for the balance amount be issued to the complainant within 30 days of the receipt of this order;
(b) the claim of compensation be worked out strictly in accordance with the provision of section 102 of the Income Tax Ordinance and paid alongwith the refund.
(c) Compliance be reported within 7 days thereafter. .