MULTAN: The Lahore High Court’s Multan Bench on Thursday directed the chairmen of the Federal Board of Revenue (FBR) and the National Accountability Bureau (NAB) and the director general of the Federal Investigation Agency (FIA) to submit a report on alleged tax evasion of Rs60 billion by a private firm.

Mian Muhammad Ghaffar of the Public Revenue Protection Company filed a petition No 8805 against the federation of Pakistan through secretary revenue division, chairmen of FBR and NAB, chief commissioner regional tax office, Multan and 12 others. Advocate Allah Bakhsh Khan Kulachi is the counsel for the petitioner.

The petitioner told the court that he had informed FBR chairman Tariq Bajwa, Chief Commissioner Inland Revenue Regional Tax Office, Multan, Iqbal Ahmad Khan, Deputy Commissioner Inland Revenue Muhammad Ali Malik and other authorities in December 2010 about Rs60 billion tax fraud related to the Fatima Enterprises Limited.

He said Iqbal Khan after considering the information constituted a team, headed by the DCIR, for intelligence, investigation and prosecution (II&P) through a letter No (CCIR, RTO/MN/SO-1/709-III 4315) on Jan 1, 2011. Initially, he said, Rs59.7 billion suppression of supply on the basis of several accounts maintained with Pakistani banks was taken up by the investigation team and the information pertaining to various bank accounts (approximately 79) of the firm for the period from July 2006 to December 2010 was collected.

“It was reported that quantum of declared net sales, in the income tax returns, for the tax years from 2007 to 2010 as per sales return was suppressed and concealed, being grave offence against national interest not warranted by any provision of law,” he stated.

He said Mr Khan after getting bribe disbanded II&P Branch discontinuing audit proceedings against the firm through a letter on July 23, 2011. “Consequently, the case was put into cold storage for about one year and stood barred by time limitation, in respect of fiscal year 2006-07, which was the sole intention of the respondents causing huge monetary loss of billions to the government exchequer,” he said.

He said that in August 2012, Additional Commissioner Audit Range Multan Asif Rasool after getting bribe from the firm finalised assessments and cleared the case and did not impose even a single rupee as income tax, sales tax, excise duty, withholding tax and others on the firm while causing a loss of at least Rs42 billion to the government exchequer and the case with regard to fiscal year 2006-07 stood time-barred.

“No audit in respect of sales tax, federal excise and withholding tax was conducted causing more loss of at least Rs15 billion including surcharge and penalty,” read the petition.

He said when Chief Commissioner Hafiz Jameel Ahmad Owasi was informed about the fraud with a request to get the case reopened for the recovery of billions as three new cases of Fatima Enterprises Limited, Nishat Sons Private Limited and Mansoor Oil Products of tax evasion were reported, he transferred the then DCIR, Malik, from audit unit to legal unit to sabotage the investigations on July 1, 2013.

He said Mr Malik was once again transferred and posted as Deputy Collector Model Customs Collectorate on July 15 to favour the firm pertaining to tax evasion of Rs290 million while a gas theft case of the firm was also finalised by the department and not even a single rupee of the tax was imposed.

“Moreover, notice for tax year 2009 involving the revenue of Rs68 million is pending in cold storage which shall be barred by time, on June 30, 2014 if not finalised by that date,” he added.

He informed the court that besides the declared bank accounts the firm had got un-declared accounts which had been concealed and suppressed from the state functionaries with sole object to evade billion of revenue causing catastrophic losses to the national exchequer.

The petitioner requested the court to issue direction for the completion of the investigations besides collecting more than Rs70 billion evaded taxes and duties and 100pc penalty from the firm in accordance with law.

He also requested that Mr Owasi and Mr Rasool be transferred to avoid their interference into the proceedings while the names of culprits be placed on the Exit Control List and criminal cases lodged against them.Justice Ibadur Rehman Lodhi directed the senior functionaries (respondents) to submit a report and para-wise comments within one month. The next hearing of the case would be held on Sept 10.

Published in Dawn, July 11th, 2014