RECORDER REPORT

ISLAMABAD: Directorate, Intelligence & Investigation Inland Revenue (IR) Faisalabad has unearthed a case of tax fraud committed by a textile unit involved in suppression of supplies to the tune of Rs 263,011,024 through mis-declaration of sales and income tax record.

Sources told Business Recorder here on Thursday that the agency’s officials persistently pursued the case which resulted in deposit of initially detected amount of Rs 13,150,551 following directions of the court. Among other major cases detected by Directorate, Intelligence & Investigation IR Faisalabad, this is also one of the cases detected by the regional directorate where amount has been deposited by the involved units.

Details of the case revealed that F M Textile Mills, Faisalabad was involved in the manufacturing of textile goods i.e. weaving and sizing but the said unit was involved in suppression of supplies to the tune of Rs 263,011,024/- by way of mis-declaration in sales and income tax record.

The action under Section 38 of the Sales Tax Act, 1990 was initiated by the agency’s officials against the unit. A team of three Deputy Directors along with other officers/staff authorised under section 38 ibid vide no 1233 dated 17.11.2016 visited the running business premises of said unit. At that time certain records of sales/purchases and bank related documents were provided by the said unit voluntarily. During peaceful exercise a person namely Sheikh Ijaz, who is father of owner of the unit aggressively entered the unit and locked the main gate of the premises and started agitation, resistance and hindrance in the path of exercise of lawful execution of duties by the team. He incited the workers and dozens of workers physically assaulted the team. After physical scuffle they snatched the resumed record by force while inflicting physical injuries to some of the team members.

The directorate found that the unit was involved in tax fraud as envisaged in section 2(37) of the Sales Tax Act, 1990, by way of making taxable supplies without charging/paying due sales tax and violated the provisions of sections 3, 6, 7, 8, 8A, 22, 23, 25, 26, 38 & 73 read with 2(14), 2(20), 2(33), 2(35), 2(37), 2(40) & 2(41) of Sales Tax Act, 1990, SRO 283(I)/2011 dated 01.04.2011, SRO 1125(I)/2011 dated 31.12.2011, SRO 1058(I)/2011 dated 23.11.2011 and SRO 154(I)/2013 dated 28.02.2013 read with the Sales Tax Rules notified vide SRO 555(I)/2006 dated 05.06.2006. Further, the sales tax is recoverable under Section 11(2) read with 11(3) of the Sales Tax Act, 1990, along with default surcharge under section 34(1) of the Sales Tax Act, 1990. The offences committed by are punishable under sections 33(11), 33(12) and 33(13) of the Sales Tax Act, 1990.

Consequently, a criminal case was lodged vide FIR No. 02/2016 dated 18.11.2016 as per law against proprietor of the said unit), and other persons/workers, its beneficiaries/connivers. The registered unit filed Writ Petition No. 37358/2016 before Lahore High Court Lahore against action under section 37A ibid.

In response to the directions passed in Writ Petition No. 37358/2016 by the Lahore High Court, Lahore the registered person had deposited initially detected amount of Rs 13,150,551/- vide CPR No.ST-20170105-0360-1025550 dated 05-01-2017, sources added.