Daily Times

ISLAMABAD: The Director General of Intelligence and Investigation(I&I) of FBR has written a letter to chairman Nisar Muhammad to get his permission for the expeditious recovery of sales tax worth Rs 2.18 billion from a company, MS Distributors.

Documents available with Daily Times stated that taking cognizance of the issues raised in the investigation report that was sent to the I&I Directorate by the Regional Tax Office Lahore stating that the RTO had passed an adjudication order for tax years 2012 to 2015 under sales tax act, 1990 against the said company. The order created the sales tax demand of Rs 143.43 million, 77.91 million, Rs 202.37 million and Rs 668.769 million for 2012 to 2015 respectively, additionally a penalty equal to 100 per cent of the said sales tax amount was also imposed on the firm for all the years under consideration.

The owner of MS Distributors, which is the sub distributor of Nestle Pakistan Limited Foods submitted the first appeal before the Capital CIR (Appeals) in which he had requested for re-determining the liability against his company for the above mentioned period by passing fresh orders. In response the CIR(Appeals) had termed that the sales tax was evaded by the firm. Documents further stated that the sales tax defaulter again gave another appeal before the ATIR against the order of the CIR (Appeal). On which the ATIR directed the CIR (Appeal) to pass a fresh order on the merits of the case as it had no statutory order to remand the case back.

In the meantime, the concerned ACIR Audit unit 3 zone IV RTO Lahore took up the matter again in the light of the decision of CIR (Appeals) dated 19 February 2016 and issued a final show cause notice for compliance on 23 March 2016.

The tax payer filed a writ petition in the Lahore High Court on the ground that re-adjudication proceedings may not be finalised till the decision of the 2nd appeal. The high court issued status-quo orders .

It is however informed that the ACIR had re-adjudicated the case by reassessing sales tax demand and the penalty for the same period at Rs 143 million, Rs 77 million, Rs 202 million and Rs 668 million respectively.