KARACHI, July 8: The Supreme Court registry at Karachi has dismissed leave to appeal and remanded Ashfaq Ahmed, Khurram Ashfaq and another man in judicial custody till furnishing a bank guarantee of Rs67.77 million as ordered by the Sindh High Court.

The accused, who had wilfully evaded Rs9.08 million sales tax, shall also furnish Rs250,000 each with PR bonds in the like amount for satisfaction of the court for their release.

The apex court’s two-member bench, comprising Justice Iftikhar Muhammad Chaudhry and Justice Abdul Hameed Dogar, was hearing two identical criminal appeals against the judgment of the Sindh High Court passed on July 24, 1999 and announced common order on both the appeals.

The court, in its verdict authored by Justice Chaudhry, said: “Today when we commenced hearing of instant petitions, we confronted counsel appearing for petitioners with the contents of the application submitted by the petitioners wherein they spelled out conditions on the basis of which they wanted to get bail order in their favour, including the one that they shall furnish bank guarantee in the sum of Rs67.77 million for satisfaction of the Nazir of the High Court within three weeks from the date of filing the application, and asked that when the petitioners have themselves consented for the said order, than how these petitions are competent.”

The Supreme Court observed that counsel for the appellants could not answer satisfactorily, except stating that no such condition could be attached to the bail granting order.

“We are not inclined to agree with his such contention because condition of furnishing bank guarantee was imposed on the petitioners as per their own desire because they wanted to get themselves released on bail, otherwise they have no case on merit for grant of bail in view of overwhelming incriminating evidence collected against them by the prosecution,” the court ordered.

The Supreme Court, in its judgment, said the appellants were stopped by their conduct to blow hot and cold in the same breath, ie, the order on the basis of which they were directed to furnish bank guarantee was bad in the eye of law. As such, keeping in view the above circumstances, the court was inclined to recall the bail granting order to relegating the parties to the position which had been prevailing before the passing of he impugned order of the SHC.

The SHC granted interim bail on July 22, 1999 and confirmed it on July 24, 1999 with the condition that the petitioners should furnish a bank guarantee in the sum of Rs67.77 million to the satisfaction of the Nazir of the SHC within three weeks, when the main case against the petitioners pertaining to evasion of sales tax was pending before the Special Judge Custom and Taxation, Saddar, Karachi.

The facts of the case are that an Additional Collector-I, Sales Tax (West) Karachi, received information that M/s Kruddson Private Limited, Karachi, were involved in massive evasion of sales tax on the supply of aluminium sections. On receipt of such information a team, consisting of a senior auditor and a deputy superintendent, under the instructions of the Additional Collector, visited the company’s office on June 3, 1999 and checked the record.

At the relevant time petitioner Ashfaq, managing director of the company, was present, but he declined to produce the sales tax record. However, the team then verified the stock of raw material and finished goods lying in a factory in the presence of Ashfaq, the Supreme Court order said.

The managing director made a statement on being questioned that imported door locks, door closes and other locks lying in the factory’s godown belonged to Khas Trading Company, a firm owned by his son Noman Ashfaq, which was registered as a commercial importer. The team also recorded the statement of attorney Taufiq Ahmed countersigned by the managing director.

The scrutiny of accounts ledgers revealed that evasion of sales tax, including additional tax amounting to Rs9.08 million, took place from August 1997 to March 1998 and from May 1998 to July 1998. Again on June 5, 1999, sales tax staff, with two assistant collectors, visited a sale point of M/s Kruddson at Karachi and interviewed manager sales Mohammed Aslam.

It is the case of department that Aslam also informed the sales tax department that accountant Mohammed Taufiq and he himself were aware of the modus operandi of tax evasion by way of manipulation of accounts as they were themselves instrumental in doing so.

The counsel for the petitioners stated that as they had obtained a stay order from the apex court, so they had not furnished the bank guarantee, and they be given two weeks to comply with the impugned order.

Deputy Attorney-General Syed Zaki Mohammed opposed the request of the counsel for the petitioners and argued that the matter had been pending since 1999 and the petitioners themselves surrendered before the High Court. He submitted that they were not entitled to grant of further time.—PPI