chemical dealers for alleged tax fraud
RECORDER REPORT
ISLAMABAD: An FIR has been lodged by the Directorate of Intelligence & Investigation, Inland Revenue Faisalabad against M/s Sheikh Brothers Chemicals & M/s S. B. Chemicals over allegedly committing a tax fraud to the tune of millions, causing huge revenue loss to the national exchequer.
Sources told Business Recorder on Tuesday that the regional directorate of intelligence IR Faisalabad lodged an FIR No. 01/2016 dated September 22, 2016 against the said companies on the charges of tax fraud. This is one of the major cases of tax frauds being detected by the regional directorate of Faisalabad after fulfilment of all legal formalities. An expert team of the regional directorate has been actively engaged in analysis of data and verification of tax records to detect cases of tax evasion to prevent revenue loss to the national kitty. Through timely detection of cases of tax evasion, fiscal frauds, concealment of income and broadening the tax base, the compliance level has been increased among business community and deterrence has been created within the territorial jurisdiction of the said directorate. Moreover, Directorate of Intelligence & Investigation, Inland Revenue Faisalabad has taken a number of actions against the tax evaders in different sectors and industries including packaging industries.
Details of the case revealed that on receipt of definite information the said both companies are operative and involved in the manufacturing as well as supplies of Detergents (washing powder and detergent bar) but on the other side M/s Sheikh Brothers Chemicals had already declared its business closed since 31.05.2013. Consequent upon, the Deputy Directors along with other authorized officers under section 38 of the Sales Tax Act, 1990 visited the running business premises of both the companies having been duly authorized u/s 38 of the Sales Tax Act, 1990 by the competent authority i.e Director Intelligence & Investigation- IR Faisalabad vide no. DIR/I&I-IR/FSD/3122 dated 09.06.2016 and no. DIR/I&I-IR/FSD/3127 dated 09.06.2016 respectively.
At that time certain records of sales / purchases and bank related documents were provided by the said units. As a result of this exercise, M/s Sheikh Brothers Chemicals, Faisalabad filed complaint before Federal Tax Ombudsman vide no. FTO-FSD/0000571/2016 dated 23.06.2016 with the stance that the under reference exercise is illegal and based on forgery of documents. After due consideration and providing proper chances of being heard to the complainant and the department the FTO has decided the instant complaint. The FTO ruled that both parties heard and record perused. In this case Complainant is contending that unit was closed since 31.05.2013 and departmental officers have raided it on 09.06.2016 by using force in the form of breaking lock etc without search warrants under Section 40 of the Act. It has also been alleged that officers even had no departmental authorization from competent authority under Section 38 of the Act and the same was allegedly prepared after raid. The department’s view is that the unit was visited after proper authorization by Director I&I Faisalabad vide letter No.DIR/I&I-IR/FSD/3122dated 09.06.2016. Department has also contended that the unit was not closed as record resumed during visit on09.06.2016 showed that it had received raw materials during 2014, 2015 and 2016. Moreover it had renewed financial arrangement with a Takaful company on 17.12.2015.
The said position shows that apparently the Complainant’s unit was operational after 2013 (contrary to Complainant’s contention) and departmental officers had visited it on 09.06.2016 after valid authorization from competent authority. Thus apparently no case of maladministration is made out against the department. The request of the Complainant for declaring action of the department as null, void and illegal also appears pre-mature particularly when so far department has not taken any coercive or legal action against him.
The FTO further had permitted the department to proceed for lodging of FIR against the complainant as per law. Hence, the stance of the department was fully upheld by the FTO being completely lawful and bona fide. Resultantly, the above mentioned FIR has been lodged by the department completely in line with the law.
This allays and dispels the misunderstanding as if the FTO had acceded to the complaint against the Department by holding the impugned action by the Department containing any maladministration whereas the reality and the interpretation of the said order by the FTO is exactly otherwise and contrary to the stance taken by the taxpayer. As a matter of fact, the FTO declared the departmental action out rightly legitimate and within four corners of the law, officials added.
