FINDINGS /DECISION ' The complaint has been filed on account of inordinate delay in the refund of sales tax by the Respondents. The Complainants have stated that a show-cause notice (SCN), dated 2-5-2000 was issued by the Deputy Collector (Adjudication-III) alleging that the audit team of DRRA had pointed that they had (twice) received the refund of the same amount of Rs,1,365,556 simultaneously, once through the Sales Tax Returns, and secondly from the Customs House, Karachi, alongwith the customs rebate during the period 1-7-1996 to 31-12-1996. On receipt of the SCN they paid the entire amount of sales tax i,e, Rs,1,672,294 alongwith additional tax and penalty of Rs,11,04,171, total Rs,2,807,530, by availing the amnesty provided by the Government.
2. The Coniplainants stated that the Sales Tax Department did not conduct any proceedings for the final disposal of SCN. They approached the Deputy Collector vide letter, dated 7-11-2001 to finalize the adjudication proceedings. The Deputy Collector heard the case and issued order-in-original, dated 20-3-2002 directing the Department to conduct a reconciliation meeting with them to arrive at the correct figure of refund allegedly paid twice. In pursuance of this order, the scrutiny of the sales tax record and the Complainants' record was conducted by a Deputy Superintendent whose report confirmed that only an amount of Rs,239,706 was paid to the Complainants twice which must be recovered from them alongwith additional tax and the balance refunded to them.
3. They filed a refund claim to the Deputy Collector (Refund) on 30-5-2002 to process the legitimate refund case. They reminded him vide letter, dated 4-6-2002 to expedite the matter. After two months they were verbally informed by the Superintendent (Refund . Division) that their refund claim could not be entertained and another SCN, dated 8-12-2002 on the same subject had been issued and the case was pending with the Deputy Collector (Adjudication-III).
4. The Deputy Collector again conducted the hearing, the Deputy Superintendent's report was again obtained, who once again confirmed that the Complainants were entitled to the refund Rs,2,198,031. The Deputy Collector passed another order-in-original, dated 7-8-2002 directing the Sales Tax Department to refund the amount.
5. The Complainants again approached the Deputy Collector (Refund) vide letter, dated 8-7-2002 with the request to process the refund claim in pursuance of the second order of the Deputy Collector. They repeatedly requested the officials of the Sales Tax Department through various letters and personal visits from August 2002 to April, 2003 to obtain their legitimate refund.
6. The Complainants stated that the Collector informed them that he had not received the second adjudication order. The letters sent to the Department and visits made to the office would clearly establish that the Collector had in fact received the order. The Collector filed an appeal after nine months which was barred by time under section 45-B of the Sales Tax Act. They alleged that it was the worst example of maladministration.
7. The Complainants stated that this was not end of their hardship. The Department's appeal was heard by the Collector (Appeals) and he passed an order, dated 24-5-2003 directing the Deputy Collector to pay the amount of refund within two weeks of the receipt of the order. The Department was bound to pay the refund within two weeks but two and half months have already elapsed and two more reminders, dated 30-5-2003 and 4-8-2003 have been sent to the Deputy Collector but to no effect. Copies of the second letter were endorsed to the Member (Sales Tax) and the Member (Legal) but they received no response. The Department was thus not refunding the due amount nor replying to their letters which reflected the callous and business unfriendly attitude of the Sales Tax Department. They requested that the Collector of Sales Tax and Central Excise (West), Karachi, be directed to refund the amount without delay alongwith 14% under section 67 of the Sales Tax Act for illegally retaining the money for more than three years.
8. The Collector (HQ), Sales Tax House, Karachi, sent a one-line reply to the complaint that the refund of the amount claimed by the Complainants has been sanctioned bn 17-9-2003. He did not give any reason why the matter remained pending for such a long time. All the letters and reminders sent by the Complainants and personal requests made by them proved fruitless. When the Complainants filed this complaint in this office and notice was sent to the Respondent, they acted immediately and paid the refund.
9. The Complainants confirmed vide letter, dated 24-9-2003 that the Deputy Collector (Refund) had sanctioned the refund of Rs,2,198,031 and the cheque has been received. Mr. Naseer Ahmad Malik. Consultant, and Mr. Aftab Ahmed, Controller of Finance, who attended the hearing also confirmed receipt of the refund from the Department. The Department did not care to depute a representative to attend the hearing.
10. While the grievance of the Complainant has been redressed it is necessary to investigate into the causes why the matter was handled in a slipshod manner, and why no action was taken despite the Department's own findings and the decision of the Collector (Appeals), and why no reply was given to the Complainants on their persistent requests for this long outstanding refund claim. It should also be examined why the same case suffered two quasi-judicial proceedings at the level of the Deputy Collector.
11. It is recommended that C.B.R. Direct the Director General of Inspection to.
(i) enquire into the circumstances of this case briefly mentioned above, identify the reasons for and fix responsibility of inaction and inordinate delay in the disposal of the claim;
(ii) disciplinary action be taken against the defaulting officers;
(iii) the inquiry be completed within two months; and