The LHC has set aside the FBR order passed under Section 74 of the Sales Tax Act, 1990 to reject the taxpayer''s application seeking condonation of time limitation to claim time barred refunds. A petition was moved by a taxpayer of Faisalabad RTO through Waheed Shahzad Butt, Advocate, challenging the FBR rejection order issued under Section 74 of the Sales Tax Act, 1990 that viewpoint of the FBR in returning taxpayer''s money in shape of refunds, is patently illegal and contrary to the constitutional rights granted by the Constitution of Islamic Republic of Pakistan, 1973.
The LHC order states, "Petitioner is aggrieved of order dated 03.11.2016 passed by the FBR. Operative part of the impugned order is reproduced hereunder:-
"It has been observed that the reasons put forth by the RP are occasional happening occurring inadvertently which cannot be construed as justified reasons for such a long delay. The Supreme Court of Pakistan in the case has held that "where a matter is barred by limitation, each and every day''s delay must be explained before it can be condoned. Also the FTO in complaint has been pleased to hold that "the delay should not unduly protract and some plausible explanation should be offered for the delay.
As the delay has not been substantiated with plausible reason/explanation and relying on the judgements of the Supreme Court of Pakistan and Honourable FTO that substantive reasons of each and every day must be given before delay can be condoned, the request for condonation under section 74 of the Sales Tax Act, 1990 is hereby rejected."
In this case, the claimed refund was rejected through impugned order for the reason that each and every day is not explained. The learned counsel for the petitioner submits that petitioner''s case squarely falls within the law laid down in judgement Messrs Pfizer Laboratories Limited vs Federation of Pakistan. Further submits that facts of decision in Shahtaj Sugar Mills Ltd were distinguishable from the facts of petitioner, therefore, it was wrongly relied upon".
The LHC order added: "Learned Counsel for the respondents has opposed the petition and submits that judgement in Shahtaj''s case was rightly applied in this case. Perusal of the reproduced part of impugned order shows that facts of petitioner''s case as well as Shahtaj''s case were not compared in the impugned order. Examination of Shahtaj''s case shows that registered person has deposited the tax voluntarily and refund was claimed after passing of judgement in Colony Thal Textile Mills. The Supreme Court in this backdrop of facts decided against the registered person after discussing Pfizer Laboratories Ltd''s case.
Needless to say that authorities are required to pass reasoned and speaking order under Section 24-A of the General Clauses Act, 1897. The learned counsel for the respondent is also confronted to show whether the impugned order is appealable, he has read Section 45B and 46 of the Sales Tax Act, 1990 to substantiate that order passed under Section 74 of the Sales Tax Act, 1990 is not appealable. Under the circumstances, the impugned order is set aside and matter is remanded to respondent, who shall decide the matter through speaking order, after discussing facts of petitioner''s case and law down in above noted judgements, LHC ordered.
Copyright Business Recorder, 2017