Malik Riaz let off over alleged tax evasion worth Rs119.4bn: report

July 22, 2013


Property tycoon Malik Riaz Hussain shown exiting Supreme Court. - File Photo
Property tycoon Malik Riaz Hussain shown exiting Supreme Court. - File Photo

ISLAMABAD: President Asif Ali Zardari dismissed the report submitted by the Suddle Commission in the Arsalan Iftikhar case, and has given property magnate Malik Riaz Hussain a clean chit in a suspected tax evasion of Rs 119.4 billion, according to a Daily Times report by the Daily Times Monitor.

The president accepted Malik Riaz’s representation, and dismissed the much questioned December 4, 2012 decision made by the federal tax ombudsman (FTO), the Monitor stated in its article citing reports containing references to official Presidency documents.

The Suddle Commission had been formed by the Supreme Court in order to probe an alleged Rs 342 million business deal between Malik Riaz and the son of Chief Justice of Pakistan Iftikhar Muhammad Chaudhry, Dr Arsalan Iftikhar.

The commission had incriminated Malik Riaz in a colossal tax evasion that amounted to Rs 119.4 billion, and proposed that a penalty for concealment of assets in wealth statements filed with income tax returns be enforced on the property tycoon in its interim results.

The documents cited by the Daily Times Monitor also stated that a joint representation questioning a suo motu order passed by the FTO had been filed by Malik Riaz and the principal officer of Bahria Town (Pvt.) Ltd, under Section 14(I) of the Federal Ombudsman Institutional Reform Act 2013. This was concurrently corroborated by the presidential order, which suggested that the representation had indeed been filed.

The notice and the representation explained that the suo motu case concerning an alleged business deal between Malik Riaz and Dr Arsalan Iftikhar – an attempt to influence the judicial process – was disposed of by the Supreme Court on June 14, 2012, and the attorney general of Pakistan was subsequently directed to set the state machinery in motion in order to ensure that “all those who may have committed any illegal acts, including Malik Riaz, Dr Arsalan Iftikhar and Salman Ali Khan, are pursued and brought to book with full force and rigour of the law”.

The attorney general wrote to the National Accountability Bureau (NAB) chairman regarding the matter on June 18, 2012. Subsequently, Dr Arsalan Iftikhar filed CRP No 167/2012, which was allowed by the apex court on August 30, 2012. The FTO was appointed as a one-man commission, who was expected to hold an inquiry into the matter.

According to the documents, the commission had submitted three interim reports. After the third report was received, it was noted that it was no longer necessary for the commission to proceed further in the inquiry, and the matter was therefore disposed of.

According to the FTO Ordinance of 2000, the FTO’s responsibility is to identify, examine, compensate and correct any injustice done to a person through the maladministration by functionaries that oversee the laws of taxation. Referring to the law, the main objection raised in the representation was that the federal tax ombudsman did not have any authority to commence suo motu proceedings and issue notices to the petitioners.

The Presidency’s letter further argued that the term maladministration has been defined in Section 2(3) of the afore-mentioned ordinance, while Section 9(1) gives the tax ombudsman the authority to investigate any charges of maladministration on the part of the Revenue Division or any tax employee, and this he can inter alia do on his own motion.

When the Law and Justice Division sought the FTO’s comments, the FTO Secretariat reported on March 16, 2013 that the proceedings had only been taken against the maladministration committed by the FBR, adding the board would be responsible for taking any action prescribed by the Income Tax Ordinance 2001.

Section 32 of FTO Ordinance, 2000 states, “The Revenue Division or any person aggrieved by a recommendation of the federal tax ombudsman may, within thirty days of the recommendation, make a representation to the president who may pass such order thereon as he may deem fit.”

Formerly, the petitioners had filed an application that challenged the said order, with the FTO issuing a subsequent notice. The Law and Justice Division dealt with the matter, thus arriving at the conclusion that the action was ultra vires and void.

“The representation, therefore, is competent at this stage... This secretariat agreed with the said conclusion,” the report affirmed, referring to the Presidency documents.

“It appears that the FTO has taken upon himself to continue with the proceedings conducted as a one-man commission, which is beyond the ambit of the FTO Ordinance 2000,” the letter stated. “The proceedings initiated and the notice issued, therefore, is without jurisdiction. The FTO Secretariat has not filed any comments despite notice. In its response to the earlier petition, the FTO Secretariat had given out that the case is only against maladministration of the FBR... Accordingly, the president has been pleased to accept representation and to set aside impugned decision of FTO commencing proceeding against the petitioners on the basis of third interim report.”