Court Grants Bail to Man Involved in Rs. 3 Billion Fraud Case Against Rs. 100 Surety Bond

Islamabad High Court (IHC) while granting bail to an individual accused of tax fraud, cautioned Chairman FBR that any action taken during criminal proceedings in breach of the law laid down in Taj International (Pvt.) LTD will expose the Federal Board of Revenue and its tax officials for abuse of power. The bail application is allowed and the petitioner is admitted to bail, subject to furnishing bail bonds in the sum of Rs.100/- (Rupees One Hundred) to the satisfaction of the trial Court. The petitioner shall be at liberty to deposit cash surety in accordance with the policy of this Court. This important judgement has been issued by the IHC on Wednesday. According to the judgment of the IHC, let a copy of this order also be sent to Chairman FBR who will ensure that the order together with the judgment of Lahore High Court in Taj International (Pvt.) LTD is circulated to the relevant tax officials exercising powers under the Sales Tax Act within the territorial jurisdiction of this Court. As any action taken while initiating criminal proceedings in breach of the law laid down in Taj International (Pvt.) LTD will expose the Federal Board of Revenue as well as the officers who have been delegated powers under the Sales Tax Act to penal consequences for abuse of power. Let them remember that as public officials the statutory and police powers of the state delegated to them are to be exercised as a trust, in accordance with law. IHC judgment stated that the petitioner is seeking bail after having been arrested in the case registered pursuant to F.I.R. No.7/2024 in terms of Section 2(37) of the Sales Tax Act, 1990 (“Sales Tax Act”) read with the punishments mentioned at Serial No.11 and 13 of Column 1 of the table under Section 33 of the Sales Tax Act. It is the State’s case that Kineses Energy and Power Innovations (Pvt.) Limited (“Taxpayer”) is liable for sales tax fraud in the amount of approximately Rs. 3.2 billion. The petitioner is the branch manager of First Women Bank, Imperial Court Branch, Karachi, and has been arrested for aiding and abetting the Taxpayer by opening their accounts in the branch. It said that the Court therefore finds that the arrest and detention had been undertaken in breach of the law laid down by the Lahore High Court in Taj International (Pvt.) LTD. and upheld by the Supreme Court by order dated 04.12.2024. The tax department has initiated criminal proceedings while being privy to the law laid down in Taj International (Pvt.) LTD., which amounts to a colorable exercise of authority and abuse of power undermining the petitioner’s right to liberty, dignity, equality, and due process guaranteed by Articles 9, 14, 25, and 10A of the Constitution. In their zeal for maximizing tax collection, public officials comprising the tax department have thwarted the law laid down in Taj International (Pvt.) LTD. and have abused the powers vested in them under the Sales Tax Act and have undermined the petitioner’s fundamental rights guaranteed by the Constitution. It is also a shame that neither the Magistrate granting remand nor the Court denying bail took into account provisions of the Sales Tax Act as enumerated in Taj International (Pvt.) LTD., and have instead acted as cheerleaders for the misguided tax recovery steps undertaken by the tax department instead of being the protectors and enforcers of fundamental rights guaranteed by the Constitution. While the question of legality of the criminal proceedings initiated against the petitioner is not before this court, it expects that the trial Court seized of the matter will take into account the legality of the proceedings it terms of the law laid down in Taj International (Pvt.) LTD, IHC order said.