DECISION/FINDINGS The complainant is aggrieved by non-payment of refund due to Klass Textile Mills (Pvt.) Ltd. For the assessm ent years 1994-95 to 1998-99. The company is a manufacturer and exporter of garments enjoying exemptions under clause 188-D of Part I of the Second Schedule to the Income Tax Ordinance, 1979, Tax aggregating Rs.7,798,380 was withheld under various subsections of section
50. However, assessm ent for the years 1994-95 to 1998-99 was later rectified on 20-1-2001 under section 156 of the Income Tax Ordinance in the light of (now well-known) judgment by the Supreme Court of Pakistan in re: Elahi Cotton Mills Ltd. (1979) 76 Tax 5 SC (Pak.). A fresh demand notice showing refund at Rs.7,798,380 was then served which is the basis of the present claim of refund.
2. The respondent failed to submit any reply whatsoever despite several opportunities provided by this Secretariat for the purported reasons that the assessment records of the company were with some other Investigating Agency. The case was finally fixed for 20-11-2001 when Mian Munawar Ghafoor, I.A.C. Appeared alongwith the assessment records and admitted that the refund as claimed is very much due. He attributed delay to non-availability of record with the Department. It was admitted by the respondent's Representative that since no arrears were outstanding against the complainant nor any adjustment was pending, the refund would be paid sooner rather than later. He acknowledged that it was in the interest of the Department to pay refund immediately in order to avoid the burden of compensation payable under section 102 of the Income Tax Ordinance which had already started accruing due to the delay in payment of the refund. It is, therefore, recommended that:--- The refund of Rs.7,798,380 should be paid immediately alongwith the compensation @ 15% as per under section 102 of the Ordinance.
General instructions be issued to the functionaries of the Department not to unnecessarily withhold I efunds worked out on IT-30s so that the State is not burdened with the obligation to pay compensation under section 102 on delayed payment.
A compliance report be submitted within 30 days of the rec,ipt of this order.