Murad takes up deduction of Rs. 6 billion from Sindh Government Account with FBR, orders prompt recovery

Sindh Chief Minister Syed Murad Ali Shah expressing his serious displeasure on the direct deduction of around Rs6 billion, including Rs 125,163,514 recently from the account of Sindh government. “This is unacceptable and must be taken seriously to recover the amount which is only meant for people of Sindh and their development.”

This he said while presiding over a joint meeting of Excise & Taxation Department and Sindh Revenue Board. The meeting was attended by Minister Excise Mukesh Kumar Chawla, Secretary Excise & Taxation Haleem Shaikh, DG Excise Shoaib Siddiqui, Chairman SRB Khalid Mahmood, Advisor SRB Mushtaq kazmi and others.

The Excise & Taxation Department informed the relevant heads about the latest position/issues of unauthorized deduction by the Federal Board of Revenue. The legal team of department is pursuing all the matters of FBR before the Commissioner Appeals, in the Appellate Tribunal as well as before the Federal Tax Ombudsman.

It has been noted with deep concern that the Income Tax Department has been creating bogus demands against the department on various pretexts and after creating such demands is making recovery via means of attachment of accounts where the funds are deposited under different heads, by the department. Recently, Income Tax Department created a demand of Rs.294,537,428 and in pursuance of this demands, they issued a notice U/S 140 of the Income Tax Ordinance, 2001 which is meant for recovery of the amount through the attachment of accounts. 

The Commissioner Inland Revenue through a letter dated June 14, 2017 to the Divisional Head Operations, National Bank of Pakistan directed him to pay an amount of Rs.294,537,428 to them. The latter obliged and paid the amount out of funds which were collected under the head of “Infrastructure Cess”, by issuing pay order dated 14th June, 2017.On this the chief minister directed his Excise minister to recover the amount at all costs. “This [amount] belongs to the people of Sindh and I would not allow any body or institution to usurp their funds unconstitutionally,” he said.  

The concerned branch of the National Bank of Pakistan is bound to transfer the funds deposited therein on a day to day basis to Account No.1 of Sindh government. However, it has been noted that the concerned branches of the National Bank of Pakistan are not acting in the manner so prescribed to deal with the funds. 

It was also noted that upon receipts of the notices issued u/s 140 by the Income Tax Department, the concerned branch issued the pay order directly without any intimation to the department. It was also witnessed that even after the issuance of the pay order, no information was provided to the department about the issuance of the funds which exhibits the prejudicial attitude of the National Bank of Pakistan.

The Chief Minister was told that the pay order issued in favor of the Commissioner Inland Revenue for a sum of Rs.294,537,428/- was noticed upon the reconciliation of figures by the department during the month of August.

A complaint/Protest against this unwarranted action on the part of National Bank of Pakistan branch has been lodged with both Governor State Bank of Pakistan and president National Bank of Pakistan requesting them to make good the loss caused to the Sindh Government by their institution otherwise the Sindh Government would be compelled to resist to litigation before their higher judiciary.

The meeting was told that besides, the FBR Karachi has sent more ‘demand’ notices of more than Rs.3 billion without any concrete evidence as claims against previous years starting from 2012 being differential amount of due and deposits on account of withholding tax. The secretary excise & taxation said that he is going to reply them and have obtained 45 days precautionary stay from Appellate Tribunal Inland Revenue of Pakistan Karachi against the notices. The chief minister said “looking at the way they have behaved so far, it can be presumed that nothing positive will come out of it.”

It is important to mention here that after unauthorized deductions of more than six billion by the Karachi FBR from non-food account of Sindh Government maintained with State Bank of Pakistan, the FBR emboldened by earlier easy illegal gain again asked the latter to deduct and pay to them an amount of Rs. 125,163,514 from the same account. “This time State Bank of Pakistan clearly stated that recovery of dues/tax from that account without decree or award by any Court of Tribunal would be in contravention of Article 12 (d) of the constitution of Pakistan,” said Excise Minister Mukesh Chawla.

Mr. Chawla suggested that the Sindh government must file a constitutional petition in Sindh High Court against the unconstitutional deductions from the Non-Food Account and recovering of the same from both FBR and SBP. “The FBR having had shut up call from SBP have now resorted to targeting the amounts in transition temporarily deposited in National Bank of Pakistan before their final landing in the Non-Food Account,” he said and added “this turn on the part of the Federal agency is very alarming”.

The secretary excise said that presently, all the seven taxes/fee/Cess collected by the Excise, Taxation & Narcotics Control Department are deposited in various branches of National Bank of Pakistan. It is regretted to note that the performance of National Bank of Pakistan is both prejudicial and against the interests of the department.

The Chief Minister directed the Secretary Finance Hassan Naqvi to seek authorization from State Bank of Pakistan for Sindh Bank for the collection of all the Provincial Taxes collected by the Department instead of National bank of Pakistan.

The chief minister directed the Minister Excise to take action against the National Bank of Pakistan Manager, KPT branch to recover the amount. Mr. Chawla said that he would register an FIR against the manager and get him arrested. On this the Chief Minister said that he don’t want to know what he was going to do “But, I want the money of people of Sindh back to Sindh government,” this is my final order.

The minister directed Secretary Excise to register an FIR against the Manager and get him arrested. 

Posted on: 2017-09-21T11:11:00+05:00