Sindh High Court stops tax recovery against SSGC

Sindh High Court stops tax recovery against SSGC

KARACHI: Sindh High Court has suspended tax recovery notices issued against Sui Southern Gas Company Limited, according to a communication sent to the Pakistan Stock Exchange (PSX) on Friday.

The gas utility clarified reports regarding action of the Large Taxpayers Office (LTO) Karachi for making recovery by attachment of bank accounts.

READ MORE: FBR freezes SSGC’s bank accounts for tax recovery

SSGC said that LTO Karachi had issued notice of recovery of sales tax to banks regarding SSGC without following the legal process and waiting for decision of an independent forum i.e. Appellate Tribunal.

“Demand was raised on irrational and unreasonable grounds of treating swapping of indigenous gas against RLNG to SNGPL as sales income,” the gas utility said.

It said that against the said recovery notice, SSGC filed constitutional petition before Sindh High Court and the SHC suspended the recovery notice of LTO Karachi through an Order dated February 23, 2022 being devoid of legal merits and directed SSGC to pursue matter before the Appellate Tribunal.

The LTO Karachi on February 23, 2021 issued a press release stating that it had frozen bank accounts of SSGC due to its default of sales tax amount to the tune of Rs23 billion. The default amount of sales tax was also confirmed by the Commissioner Inland Revenue (Appeals).

The SSGC in its latest communication said that the LTO Karachi had withdrawn such recovery notices.

The LTO Karachi in an official note dated February 24, 2022 sent to banks stated: “… for the recovery of sales tax outstanding demand of Rs23.65 billion through bank attachment issued/served in respect of M/s. Suit Southern Gas Company Limited is hereby withdrawn with immediate effect.”