Tax advisers have formally approached the Chairman of the Federal Board of Revenue (FBR) to address allegations of harassment by tax officials from the Regional Tax Office (RTO) Sahiwal.
The complaints come in the wake of Prime Minister Shehbaz Sharif's stern warning to the FBR regarding punitive measures against officials engaging in unethical practices or making baseless cases.
Prime Minister's Stance on Tax Office Misconduct
Prime Minister Shehbaz Sharif has emphasized that any FBR officials implicated in fabricating cases without valid grounds will face severe consequences.
This directive comes at a critical juncture, as the FBR's transformation plan continues to be implemented. The reported misconduct in this case presents a significant test for the FBR to uphold its commitment to transparency and accountability.
Tax experts have voiced concerns over the persistence of harassment and corruption in field formations, despite the availability of automation, integration systems, electronic sales tax verification systems, and centralized databases.
These advancements were intended to reduce human interference and bolster tax compliance. Yet, the actions of tax officials in this case highlight a troubling disconnect between policy reforms and their execution.
The recent Supreme Court ruling dismissing over 300 civil appeals filed by the Department against the Lahore High Court’s judgment reinforces taxpayers' rights.
The Lahore High Court held that initiating criminal proceedings or filing FIRs before completing a proper assessment of sales tax under Section 11 of the Sales Tax Act is unjustified.
Allegations Against FBR Officials
A detailed complaint submitted by tax lawyers outlines several serious allegations against officials from the Regional Tax Office Sahiwal. Key accusations include:
- Illegal Entry into Business Premises: It is alleged that officers forcibly entered the taxpayer's premises without lawful authorization or approval from a competent authority.
- Impersonation: The officials reportedly posed as members of the FBR Intelligence team to intimidate the taxpayer.
- Unlawful Confiscation of Assets: Officials allegedly seized cash amounting to Rs. 1,050,000/- from the taxpayer’s premises and coerced them into providing post-dated cheques totaling Rs. 5.10 million.
- Unlawful Seizure of Records: The confiscation reportedly included crucial business documents such as vouchers, bill books, supply registers, and even the company’s computer systems.
- Threats and Intimidation: The taxpayer claims to have been threatened with severe consequences, including business closure, in an attempt to extort additional funds.
Lack of Action Against Erring Officials
The complaint further alleges that when the taxpayer sought redress by approaching the Commissioner Inland Revenue (CIR) Sahiwal Zone, no significant action was taken against the accused officials.
Instead, a notice under Section 176 of the Sales Tax Act was issued to the taxpayer as a means of covering up the alleged unlawful activities.
Tax lawyers have pointed out that these actions violate both the Sales Tax Act, 1990, and the Income Tax Ordinance, 2001.
They argue that no legal provision permits on-spot inspections or seizures without proper authorization or notification.
In their plea to the FBR Chairman, tax lawyers have requested strict action against the involved officers to restore taxpayer confidence in the system.
