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The Customs Authorities are empowered under Section 224 of the Customs Act, 1969 to extend payment timelines in cases where delays are beyond the Control of the Bidder --- Federal Tax Ombudsman

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The Customs Authorities are empowered under Section 224 of the Customs Act, 1969 to extend payment timelines in cases where delays are beyond the Control of the Bidder --- Federal Tax Ombudsman

Islamabad 07-11-2024: In a recent ruling, the Federal Tax Ombudsman (FTO) directed the Directorate of Intelligence & Investigation-Customs, Quetta, to release an auctioned vehicle to a successful bidder after condoning a delay in the final payment. The Federal Tax Ombudsman (FTO) invoked its powers under Section 10(1) of the Federal Tax Ombudsman (FTO) Ordinance, 2000, to address what was deemed maladministration by the Directorate for failing to deliver the vehicle and issue the necessary auction certificate to the bidder.

The complaint was filed by an individual who had successfully bid on a 2014 Daihatsu Mira at an auction held by the Customs Directorate. Despite completing the full payment of Rs. 1,055,000, the complainant alleged that the Directorate failed to provide the vehicle and the auction certificate, which prevented him from registering the car with the Motor Registering Authority.

The Directorate responded by citing non-compliance with auction payment rules, specifically pointing to delays in the deposit of the required 25% earnest money and the remaining balance, which breached Customs Rules 67 and 68. As per Rule 69, failure to comply with payment timelines mandates forfeiture of the earnest money in favor of the government.

After reviewing the case, the Federal Tax Ombudsman (FTO) highlighted key provisions in the Customs Act and Customs Rules, 2001, that regulate the auction process:

Rule 68 requires the full bid payment to be completed within seven days, with a maximum extension of 15 days under certain conditions. Although the complainant did not meet these deadlines, he ultimately completed the payment.

The Federal Tax Ombudsman (FTO) referenced Section 224 of the Customs Act, 1969, which empowers the Federal Government or customs authorities to extend payment timelines in cases where delays are beyond the control of the bidder, particularly when failure to do so would result in undue hardship.

The Federal Tax Ombudsman (FTO) determined that the delay in payment was not due to negligence or malfeasance on the complainant’s part, and thus recommended that the Federal Board of Revenue (FBR) exercise its discretion under Section 224 to condone the delay. The Federal Tax Ombudsman (FTO) further directed the Directorate to release the vehicle to the complainant upon fulfillment of remaining procedural requirements. Compliance with this order is expected within 45 days.

This ruling underscores the importance of administrative discretion in public auctions, particularly under circumstances where rigid application of rules may cause unnecessary hardship. The Federal Tax Ombudsman (FTO) decision reinforces the role of tax ombudsmen in ensuring fair and equitable administrative practices within government departments, especially in cases involving public auctions.