GULL JEWELLERS, NEW SARAFA BAZAR, SARGODHA VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2016 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 481 (2015)

Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---

----S. 10---Sales Tax Rules, 2006, R. 6(4) & proviso---Sales Tax Special Procedures Rules, 2007, R.4(b)---S.R.O. No. 680(I)/2014 dated 02.07.2014----Compulsory registration of taxpayer---Remedy---Complaint against compulsory sales tax registration of taxpayer---Complainant was asked by Federal Tax Ombudsman as to whether he had agitated against compulsory registration before concerned Commissioner to which he replied in negative---Validity---Remedy to the compliant could only be provided administratively by the Chief Commissioner or concerned Commissioner under proviso to R.6(4) of the Sales Tax Rules, 2006---Both Department and complainant agreed that the authorized representative of the complainant would move an application for de-registration of the complainant before the Chief Commissioner, intimating the reasons for wrong compulsory registration and the Departmental Representative would then intimate to the concerned Commissioner to reconsider application of the complainant on merit, as per law---Complaint was disposed of, accordingly.

Umar Farooq, Advisor for the Dealing Officer.

M. Nasir Nawaz for the Authorized Representative.

Shakil Ahmad Shakil, DCIR, for the Departmental Representatives.

FINDING

ABDUR RAUF CHAUDHRY, FEDERAL TAX OMBUDSMAN.---The complaint was filed in terms of Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (the Ordinance). Allegedly, the Complainant, Messrs Gull Jewellers, was compulsorily registered by CRO on 07-11-2014 on the recommendations of Local Registration Office (LRO) RIO, Sargodha vide letter No.LRO/REGIST/ 417 dated 15-10-2014. A corrigendum of this order was also issued on 12-11-2014 mentioning the correct provisions of laws and rules. As per the Complainant, he was running his business on a petty scale, and thus did not fall in any of the categories specified in S.R.O. 608(I)/2014 dated 02-7-2014. Through this complaint, he requested for deregistration.

2.The complaint was referred for comments to the Secretary, Revenue Division, in terms of Section 10(4) of the Ordinance, who forwarded the comments of the Chief Commissioner, RTO, Sargodha vide letter C.No.1(126)S(TO--11)12015 dated 19-2-2015, intimating as under:--

(i)That the Complainant had flourishing business and had a good name in the Gold Market. He was carrying out business in an air conditioned shop at Sarafa Bazar, Sargodha. Hence, it fell in category (b) of sub-rule (4) of Sales Tax Special Procedure Rules, 2007 amended vide S.R.O. 608(I)/2014 dated 2-7-2014;

(ii)Decision on compulsory registration was communicated to the Complainant on 01-10-2014;

(iii)Corrigendum in the original order of compulsory registration was issued on 12-11-2014, rectifying the mistake of mentioning incorrect provisions of law.

3.The AR intimated that clause 4(b) of the said SRO was made the basis of issuance of registration notices to all the retail shops in Sargodha. However, application of this clause on the Complainant was not correct, as it pertained only to those retailers, who were operating their businesses in centrally air conditioned Malls, Plazas and Shopping Centers. Hence, the air conditioned shop of the Complainant located in a non-centrally air conditioned building, was not liable to be registered on this account. This was the only reason for applying for deregistration. The AR also averred that the report of Mr. Saleem Raza Malik, IRAO, Incharge Registration Cell, RTO, Sargodha was sent by the LRO to the CRO without verification. Further stated that no notice intimating the reasons for compulsory registration was ever received by the complainant.

4.The DR controverted the interpretation of the AR about the air conditioning of the business premises, by stating that there was no word used in the SRO as centrally air conditioned. He also furnished a copy of the notice so issued to the complainant vide RTO's letter No.RTO/SG/2014-15/IRRC-2/2825 dated 01-10-2014, sent through TCS receipt No.03745727 dated 01-10-2014. As this was not returned undelivered, so it was presumed that it had reached its destination. When no reply of the complainant was received, the LRO recommended compulsory registration to the CRO on 15-10-2014. The AR was asked as to whether he had agitated this compulsory registration issue before the concerned Commissioner or the Chief Commissioner, to which he replied in the negative. The AR averred that it was improper to initiate action on a single default of not responding to the notice. The AR was told that remedy to his complaint could only be provided administratively by the Chief Commissioner or the concerned Commissioner of RTO Sargodha, under Proviso to sub-rule (4) of Rule 6 of the Sales Tax Rules, 2006, which is reproduced below:--

"Provided that if it is subsequently established that a person was not liable to be registered but was wrongly registered under this rule due to inadvertence, error or misconstruction, Commissioner shall send recommendation to REGSYS to cancel his registration. In case of such cancellation of registration, such person shall not be liable to pay any tax, default surcharge or penalty under the Act or rules made thereunder, subject to the conditions, limitations and restrictions prescribed under section 3B of the Act."

5.During hearing it was agreed between A.R. and D.R. that AR would move an application/request for de registration to the Chief Commissioner, intimating the reasons for his wrong compulsory registration. The DR will intimate the concerned Commissioner to reconsider the application of the Complainant on merit, as per law.

6.The complaint thus stands disposed of in the above terms and case file consigned to record.

KMZ/106/FTOOrder accordingly.