Bail granted to accused in Rs3bn sales tax fraud case for Rs100

Islamabad: The Islamabad High Court (IHC) granted bail to a co-accused in a Rs3.2 billion sales tax fraud case for Rs100. The court declared the tax department’s criminal proceedings as an excess of its authority, and also termed the decision of the subordinate court to reject the accused’s bail as shameful.

Justice Babar Sattar issued a 10-page decision approving the bail and ordered that a copy of the court decision be sent to the Chairman Federal Board of Revenue (FBR), while also hinting at action against tax officials for future violations of the law.

The decision said that the bank’s branch manager was arrested for assisting in opening an account at the branch of Kinesis Energy and Power Company. The state did not present any material to prove the petitioner’s involvement in the crime of tax fraud, and the tax department did not even determine the tax due on the taxpayer as per the law.

According to the court decision, the tax department arrested the petitioner in violation of the Lahore High Court (LHC) decision. The Supreme Court also upheld the decision of the LHC in the Taj International Private Limited case. The tax department initiated criminal proceedings despite being aware of the LHC decision. It exceeded its powers by initiating criminal proceedings, and by misusing its powers. The petitioner’s constitutional rights to dignity, respect, and equality were violated.

The decision stated that in an attempt to collect more tax, the authorities and tax officials violated the established law. It is a shame that the magistrate who granted remand and the court that rejected bail did not consider the provisions of the Sales Tax Act. The subordinate court praised the misleading actions of the tax department instead of protecting fundamental constitutional rights.

It was added in the decision that the question of the legality of the criminal proceedings is not before this court. The court hopes that the trial court will consider the legality of the proceedings. The bail of the petitioner is granted in return for bonds of Rs100.

The court ordered that the Chairman FBR should distribute copies of the decisions of the IHC and the LHC among the tax officers, who should take criminal action related to sales tax in light of the Taj International case decision. The FBR and tax officials will face action for misuse of powers for acting in violation. The legal and police powers assigned to public officials should be used in accordance with the law.