ISLAMABAD (September 06 2003) : Taking stern action against a textile mill for the recovery of sales tax, the Central Board of Revenue (CBR) has given permission to field formation officers to seal the business premises of Farooq Habib Textile Mills, Lahore in case of non-payment of Rs 35.29 million as arrears.
The CBR has offered the unit to pay outstanding arrears on monthly basis, but in case of default the collector would exercise Section 48 of the Sales Tax Act, 1990 stopping the unit to remove any asset from its premises.
Furthermore, the CBR has decided to further proceed against the unit under Section 48, sealing the business premises of the unit and auctioning of its movable/immovable property for the recovery of defaulted amount.
Sources told Business Recorder here on Friday that the issue came to the limelight when the collectorate of customs, sales tax and central excise, Multan failed to recover outstanding dues from the textile mill.
The sales tax liability against the unit showed that Rs 35.29 million, including additional tax and penalty (including an adjudged amount of Rs 25.10 million) is to be recovered from the unit.
The CBR said that the measures taken so far by the collectorate failed to evoke any positive response.
Warranting the following action against the unit of Lahore to realise the adjudged sales tax liability the CBR directed the collector, collectorate of customs, sales tax and central excise, Multan to place embargo on the supplies to them by any ginning unit in terms of Sub-rule (5) of Rule 6 of the Special Procedure for Ginning Industry Rules, 1996.
Secondly, stop removal of any goods from their premises under Section 48 of the act read with Rule 5 of the Recovery Rules 1996.
However, the unit may be allowed to continue its operations, if it undertake to make staggered payment of an agreed amount of outstanding arrears on monthly basis.
In case of default in payment, the concerned collectorate should forthwith initiate these actions against the unit.
The CBR also said that if the recovery could not still be made then the collectorate might refer the case to the board in order to proceed with the following further action in terms of Section 48 of the act read with the Recovery Rules, 1996 to recover the dues.
Firstly, seal the business premises and if the amount is not recovered within 45 days of sealing of the premises, the movable and immovable property of the defaulter may be attached and sold through auction to recover the outstanding sales tax arrears.
Meanwhile, the collector of sales tax and central excise, Lahore would negotiate with the unit for recovery of dues in monthly instalments.