ISLAMABAD: Federal government has validated the decisions of the Directorate General (DG) of Intelligence and Investigation (I&I), Inland Revenue (IR), Federal Board of Revenue (FBR) till June 30, 2018 by amending the sales tax Act 1990 in Finance bill 2018-19.
A number of decisions of the FBR’ wing against the tax defaulters were deemed invalid last year after the Lahore High Court declared the power and functions of DGI&I (IR) as illegal.
“In section 74A of sales tax Act 1990, the following new sub-section (2) shall be added, namely:– “Notwithstanding any omission, irregularity or deficiency in the establishment of or conferment of powers and functions on the Directorate General (I&I), IR and authorities specified in section 30A, all orders passed, notices issued and actions taken, before commencement of the Finance Act, 2018, in exercise or purported exercise of the powers and functions of the officers of IR under this Act by the DG (I&I), IR or the authorities specified in section 30A shall be deemed to have been validly passed, issued and taken under this Act.”.
In addition to this, for section 30A of sales tax act 1990, the following shall be substituted, namely, the Board may, by notification in the official Gazette,– specify the functions and jurisdiction of the Directorate General and its officers; and confer the powers of authorities specified in section 30 upon the Directorate General and its officers.”.
According to a judgment of LHC in writ petition No. 37358 of 2016, SRO 116 is hereby set aside as being ultra vires the powers of the FBR and is declared without lawful authority and is of no legal effect. The FIRs registered and the criminal prosecution set in motion in pursuance of SRO 116 are also set aside and quashed.
The LHC judgment had directed the federal government to frame rules with regard to the transfer and postings under the FBR Act, 2007 (Act, 2007) of officers and employees of the FBR. The FBR is directed to frame rules with regard to the Directorates and their functioning. In particular, the FBR will enact rules for structuring the powers given in section 37A which is couched in a broad language and confers wide powers on officers of Inland Revenue.
Under SRO 116, the tax department has appointed the officers of the DG I&I (IR), to be the officers of IR and exercise such powers and perform functions of officers of Inland Revenue as mentioned in Sales Tax Act.
Senior officers of tax department told that the decisions of I&I (IR) will be validated till the June 30, 2018 after the enforcement of this amendment. The department will further issue the SRO in July this year to further explain the functions of directorate of I&I (IR).