Tax demand worth Rs4 billion against Hascol annulled

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SOURCEThe News
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KARACHI: The Federal Board of Revenue’s appellate tribunal revoked Rs4 billion worth of tax demands created against an oil marketing company Hascol Petroleum Limited, citing lack of evidences as a reason for the decision.

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“Since the action of the learned officer (Inland Revenue) is totally based on assumption and presumption, lack of reasoning and short of evidence regarding issuance of fake invoice, the impugned order in original dated 26-4-2019 passed by the Deputy Commissioner Inland Revenue is not sustainable in the eyes of law and hence directed to be annulled,” the oil marketing company cited on Wednesday the tribunal verdict as stating. Hascol Petroleum Limited, in a statement to the Pakistan Stock Exchange, said the Commissioner (Appeals) accepted the company’s plea and rejected tax demands created by the Large Taxpayers Unit (LTU) Karachi.

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Commissioner (Appeals) is the first forum for taxpayers to contest any action taken by a tax department. The LTU Karachi created sales tax demand of Rs4 billion against the petroleum company on April 26, 2019 on the grounds that the company had issued flying invoices to conceal further tax on supplies of lubricants and other related items.

The company filed the appeal against the demand order before the Commissioner Appeals. The petroleum company contested that the order was bad in law and also contradictory to provision for delegation of power under the sales tax law.

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The company claimed that the further tax was properly charged to lubricant products. The company also dismissed the charges of flying invoices. The commissioner appeals observed that the tax office had failed to provide any plausible reason/evidence. The commissioner appeals maintained that the tax unit failed to mention as to how and why the reply of the company was found unsatisfactory against alleged tax demand. “Since the action of the learned officer [of LTU Karachi] is totally based on assumption and presumption, lack of reasoning and short of evidence regarding allegation of issuance of fake invoice, in these circumstances, I have no other option but to hold that the impugned order in original is not sustainable in the eyes of law due to aforementioned facts, hence directed to be annulled,” the commissioner appeals said in an order. Sources in LTU Karachi said the unit would file appeal in the Appellate Tribunal Inland Revenue against the order passed by the Commissioner Appeals.

(This news/article originally appeared in The News on August 8th, 2019)

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