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Secretary

Revenue Division

Islamabad. …Respondent

Dealing Officer: …Mr. M Mubeen Ahsan, Advisor



FINDINGS/DECISION

Mr. Ali Zahir Jafri, Complainant

Mr. Irfran Javed, Deputy Collector of Customs

The complaint has been filed by a former Principal Appraiser of the Karachi Custom House against the CBR alleging maladministration on account of non-payment of rewards recommended by the Collectors of Customs. It has been stated in the complaint that in 1994, 13 cases of evasion of duty and taxes of over Rs. 50 crore were detected through his hard efforts; the minimum detection and recovery in each case amounted to more than Rs one crore whereas the highest recovery in one particular case was Rs. 22.2 crore. These detection and recoveries were highest ever in the history of Custom House and other departments under the CBR.

2. The Complainant alleged that “The Central Board of Revenue vide order No.7/13-AS/94 dated 20-10-1994 has sanctioned the reward equal to 1 ½ years salary in case No.4 only. Whereas the Collector has recommended the reward in each case.” It was added that the Collectors of Customs had recommended rewards in another five cases but despite reminders sent by the Collectors themselves and the Complainant, the rewards have not been paid for the last 14 years. He sent complaints to the Chairman CBR but a deaf ear was turned to his petitions. After about a decade CBR vide letter dated 29-07-2003 called for a report from the Custom House. Collector of Customs sent report vide letter dated 23-12-2003 confirming the recommendations of the rewards. Subsequently, CBR vide letter dated 26-05-2004 asked for fresh recommendation from the new Collector but the Collector vide his letter dated 14-09-2004 replied that the recommendation of his predecessor Collector could not be reviewed.

3. The Complainant stated that the CBR again resumed silence and did not respond to the reminders sent from October 2005 to March 2006 and his legitimate reward was delayed without any cogent reason. He requested that CBR be asked to pay legitimate rewards as recommended by different Collectors, the amounts of reward be calculated taking into consideration the devaluation of currency by about 138% and, since he could not invest the reward money in any profitable scheme due to the alleged unlawful action of CBR, he may be compensated by paying the amount equal to the dividend announced by the multinational companies or the NIT for each year of delay.

4. The Collector of Customs in his comments on the complaint raised the objections that (i) the matter was beyond the jurisdiction of the Federal Tax Ombudsman under sub-section (3) of section 9 of the Federal Tax Ombudsman Ordinance, (ii) the complaint was barred by time under section 10(3) of the Ordinance, and (iii) the grant of reward was not a claim or right of the officer but a prerogative of the authority to allow the reward or not.

5. It was pointed out by the Collector that the Complainant was dismissed from service on account of evasion of million of rupees in 1999. The cases mentioned in the complaint were more than 12 years old, case files were not traceable and it was not possible to ascertain the factual position. The Collectorate was not in a position to confirm whether reward had been paid to the Complainant and other officers/officials connected with these cases. He raised the question as to why did the Complainant fail to pursue the cases while he was in service. The cases related to the period 1993-1994 and he remained in service till his dismissal in 1999 but remained silent.

6. It was further stated that the rewards claimed by the Complainant were special rewards for which only CBR was the competent authority. It appeared that, perhaps, instead of cash reward the Board awarded performance certificates to the outstanding workers. The recommendations for grant of reward made by the Collectors were subject to the approval of the CBR and without its approval, the recommendations of the Collector had no legal existence. It was stated that the Complainant was paid reward equal to 18 months’ salary in one case and given certificates of performance. He was not entitled to any reward on the recommendation of the Collectors without CBR’s approval and was also not entitled to any compensation claimed by him.

7. During the hearing of the complaint, the Complainant stated that dismissal from the service in 1999 did not disentitle him from the rewards recommended by the Collectors to the CBR for meritorious services rendered by him while serving as Principal Appraiser in the Department. With regard to the cases being old he stated that the letters of the Collectors of Customs recommending special reward were available with him as well as with the CBR which have been enclosed with the reply of the CBR to the complaint.

8. He pointed out that the Accounts Section of the Custom House should be in a position to report whether rewards to other officers for whom recommendations were made alongwith him were paid or not. He reiterated that the Collector of Customs vide letter dated 04-08-1994 had recommended to the CBR that, in each of the 13 cases mentioned in the enclosed list, special reward to the officers and members of the staff who rendered outstanding performance be sanctioned. He stated that these were not ordinary recommendations but involved recovery of more than Rs.50 crore and there was no reason why Member (Customs) should not have sanctioned the same.

9. Besides these 13 cases, the Complainant stated, the following recommendations for rewards were also sent to CBR:

(i) Special reward for the Deputy Collector, Assistant Collector and Principal Appraiser (Complainant) vide letter dated 16-09-1991.

(ii) In 1995 the then Collector recommended reward for himself, the Deputy Collector, the Assistant Collector, the Complainant and an Appraiser and an SPO.

(iii) Recommendation to the CBR vide letter dated 24-09-1995 for reward equal to two years’ salary for the Deputy Collector, Assistant Collector, the Complainant, an Appraiser and SPS.

(iv) Recommendation to CBR for reward to the Collector, two Assistant Collectors and two Principal Appraisers including the Complainant made on 25-06-1998.

The Complainant stated he was not in a position to report whether reward to the senior officers were sanctioned or not.

10. Deputy Collector of Customs replied that grant of special reward was not the right of the Complainant and the authority to sanction the same rested with the CBR. He stated that he was not aware whether reward to any other officials mentioned in the recommendatory letters was sanctioned. He added that the Complainant had been paid several rewards during his service in the Custom House and should not complain about the some rewards which were not sanctioned.

11. The complaint made by Mr. A.Z.Jafri, his arguments and the Department’s reply have been examined. As regards the objection about the jurisdiction of this office not to accept for investigation any complaint by a tax employee against the Revenue Division, this office has taken cognizance of the complaint as the Complainant is no longer a tax employee and has not complained against any personal grievance relating to his service. The complaint centres around the issue that the rewards recommended by the Collectors for his outstanding and meritorious services were not sanctioned by the CBR.

12. Although the particulars of the recommendatory letters from Collectors of Customs were mentioned by the Complainant in detail, the Respondent did not inform whether rewards were paid in 18 cases referred in the complaint. An incomplete and general statement about non-availability of the record was made in the reply to the complaint. Notices dated 23-09-2006 were issued to the Department to enquire and verify whether reward as recommended by the Collectors were paid to other officers and the Complainant. The Assistant Collector of Customs (Appraisement)-Establishment sent a brief and incomplete reply without verifying the payments from the Accounts Section. Finally the Research Fellow of this office was deputed to visit the Custom House and ascertain the actual rewards paid to the Complainant in each of the cases mentioned by him. With the assistance of the customs authorities he has ascertained from the Accounts Section of the Custom House that out of 13 cases the Complainant was paid reward in nine cases as follows.



S.No. Case No. Payments (Rs)

1. SI/MISC/395/93-IX Nil

2. SI/MISC/283/94-IX 63,333

3. SI/MISC/143/94-IX 96,000

4. SI/MISC/408/94-IX 144,234

5. Indus Motors Nil

6. SI/MISC/150/94-IX 55,384

7. SI/MISC/150-D/94-IX 40,500

8. SI/MISC/150-E/94-IX 61,800

9. SI/MISC/150-F/94-IX 53,000

10. SI/MISC/150-G/94-IX 33,334

11. SI/MISC/150-H/94-IX 31,750

12. SI/MISC/1632/89-IX Nil

13. SI/MISC/1632-A/89-IX Nil

In the remaining five cases Mr. A. Z. Jafri received reward in two cases and no reward was sanctioned to him in three cases.

13. From the above report, it transpires that Complainant was sanctioned reward in 11 cases out of 18 recommended by the Collectors to the CBR. The Complainant has concealed the facts and submitted an untrue representation that no reward was sanctioned and paid to him.

14. The detection of tax evasion and recovery of tax arrears are the basic responsibility of the employees of a revenue collecting agency. Reward is an ex gratia payment and cannot be claimed as a matter of right. Its sanction is the prerogative of the CBR or officers authorized in this behalf. It has been established that rewards in most of the cases recommended by the Collectors were sanctioned by the CBR and paid to the Complainant who concealed the factual position and approached this office with unclean hands and a false representation. This office takes a very serious view of the non-disclosure of facts by the Complainant and filing of a false and frivolous complaint against the Respondent. The complaint is rejected.

(Justice (R) Munir A. Sheikh)

Federal Tax Ombudsman

Dated: 2006

BEFORE THE FEDERAL TAX OMBUDSMAN

REGIONAL OFFICE

KARACHI

COMPLAINT NO.667/2006

M/s Mehran Associates

Through M/s G.A. Khan & Company

204 Bank & Business Centre

Second Floor, Near Duty Free Shop

Off Shahra-e-Faisal, Karachi …Complainant


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