LHC declares FBR’s sales tax audit illegal

LAHORE: The Lahore High Court Tuesday declared the current procedure of the Federal Board of Revenue’s sales tax audit illegal.

Justice Shams Mehmood Mirza issued the reserved order on more than 60 identical petitions and stopped the FBR from making final decision against the petitioners. They contended that direct audit selection is a violation of Section 25 (a) and Section 177-A.

They pointed out that selecting more than one year for audit is a violation of law and FBR’s current method of auditing sales tax and income tax is not valid according to law. They pleaded that the FBR’s current method of auditing sales tax and income tax should be declared null and void. The FBR’s lawyer told the court that the existing procedure of audit of sales tax and income tax has legal protection. However, the court accepted the petitions and declared the procedure of sales tax audit illegal.