KESC asked to remit Rs890m to FBR
KARACHI, Oct 30: The deputy commissioner of Inland Revenue has warned the Karachi Electric Supply Company (KESC) of initiating recovery proceedings against it, including attachment of its bank accounts, if it fails to remit Rs890 million to the national exchequer.
The amount was collected by the KESC in electricity bills from consumers on behalf of the FBR.
In a reminder to the chief financial officer of the KESC, the tax authorities stated that as a collecting agency under section 235 of the Income Tax Ordinance, 2001, it was KESC’s legal obligation to remit the tax collection from the electricity consumers to the national exchequer.
It maintained that any further delay would tantamount to violation of legal provisions of the ordinance.
In an earlier letter addressed to the KESC on Sept 26, the tax authorities stated that as per record of the FBR record, the said tax had not been remitted since July 2012 and an amount of Rs890 million was being retained by the KESC without any valid reason.
In the instant letter, the tax authorities complained that instead of remitting the said tax, the KESC filed a suit in the Sindh High Court on the premise that this office does not have lawful jurisdiction under Section 161 of the Income Tax Ordinance to recover the outstanding tax.
It informed the KESC that the jurisdiction under the said Section had now been assigned to the Inland Revenue office by the Federal Board of Revenue (FBR).
The tax authorities warned the KESC that since they are holding public money without any valid justification, therefore, it is being reminded of its legal obligation to remit the state revenue retained by it since July 2012.
The letter further stated that in view of the jurisdiction assumed by this office under Section 161 of the Income Tax Ordinance, 2001, recovery proceedings would be initiated, including attachment of bank accounts under Section 140 of the ordinance.
The letter, signed by deputy commissioner (Inland Revenue) Badar Ayub, maintained that the tax amount be deposited without fail as with the assumption of the jurisdiction, its suit before the court has become infructuous, as cause of action ie locus standi of the suit stands removed.