Khawaja SHAHBAZ AHMED VS DEPUTY DIRECTOR, DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATION, RANGE OFFICE, GUJRANWALA
2012 P T D 1361
2012 P T D 1361
[Lahore High Court]
Before Sh. Ahmad Farooq, J
Khawaja SHAHBAZ AHMED
versus
DEPUTY DIRECTOR, DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATION,RANGE OFFICE, GUJRANWALA and another
Criminal Miscellaneous No.10333/B of 2011, decided on 27/10/2011.
Sales Tax Act (VII of 1990)---
----Ss. 2(37), 3, 6, 7, 22, 23, 33(2), (5), (6), (8), (11), (13) & (16), 38 & 73---Federal Excise Act (VII of 2005), S. 3A---Criminal Procedure Code (V of 1898), Ss.497 & 497(2)---Bail, grant of---Further inquiry---Bail sought on medical grounds---Accused was the sole proprietor of steel mills and allegations against him were that his steel mill supplied its products to different registered/unregistered persons without issuing sales tax invoices, causing huge loss to the public exchequer; that the steel mill made taxable supplies to registered persons but in order to understate its production and taxable supplies, said supplies were shown to have been made to unregistered persons; that taxable supplies of the steel mills were much more than what was declared to the sales tax department, and that the accused knowingly, deliberately and fraudulently understated and underpaid sales tax---Contentions of the accused were that he was suffering from acute heart disease; that he had been falsely implicated in the case due to mala fide of the authorities as the accused and other steel mill owners had been litigating against the sales tax department on different issues; that the prosecution had no incriminating material to connect the accused with the alleged commission of the offence; that alleged tax liability of the accused was yet to be determined by the adjudicating authorities and prior to that, no coercive measures, including arrest of the accused could be effected, andthat the offences alleged did not fall within the prohibitory clause of S. 497, Cr.P.C---Validity---Accused was alleged to have evaded tax and excise duty to the tune of Rs.133 million but liability of said amount was yet to be determined by the competent authority---Prior to the final determination of tax liability the offence became a matter of further inquiry, entitling the accused to the concession of bail---Medical report of the accused showed that he was suffering from heart disease and two of his arteries had narrowed severely, and that he needed medicine and easy access to a hospital with treatment facilities---Further incarceration of the accused might have put his life at stake as his treatment was not possible in jail---Accused was granted bail subject to deposit of 5% of the his total alleged liability with the concerned authority/department.
The State through Collector of Sales Tax v. Muhammad Ashfaq Ahmed and others 2006 PTD 286 ref.
Kh. Adnan Ahmad for Petitioner.
Nadeem Mahmood Mian and Ms. Kausar Parveen for the Complainant.
ORDER
SH. AHMAD FAROOQ, J.---Through the instant petition, the petitioner/Kh. Shehbaz Ahmad has sought post arrest bail in a case arising out of F.I.R. No. 5 of 2011, dated 28-6-2011, registered in Police Station, I & P Branch, Directorate General of Int. & Inv. Range Office, FBR, Gujranwala, under sections 2(37), 3, 6, 7, 22, 23, 38 and 73 of the Sales Tax Act, 1990 read with section 3A of the Federal Excise Act, 2005, punishable under sections 33(2)(5)(6)(8)(11)(13)(16) of the Sales Tax Act, 1990.
2.Briefly, the prosecution story as contained in the F.I.R. is that Messrs Allah Tawakal Steel Mills, Gujranwala made supplies of their end product i.e. billets/ingots to different registered/unregistered persons without issuing sales tax invoices and thereby caused a huge loss to the public exchequer. It is alleged that Messrs Allah Tawakl Steel Mills also made taxable supplies to registered persons but in order to understate their production and taxable supplies, they showed that the same were made to unregistered persons. It was further alleged that the petitioner's mill during the period May, 2008 to March, 2011 declared its turnover to the tune of Rs.285,871,376 and paid sales tax to the extent of Rs.30,978,405. On comparison of the above figure with production and value of supplies of similar units, coupled with the statements of accounts maintained by Messrs Allah Tawakal Steel Mill, it transpired that taxablesuppliesweremuchmorethanthesuppliesdeclaredtothe sales tax department. The accused are also alleged to have knowingly,deliberately,fraudulentlyunderstatedandunderpaidthesales tax amounting to Rs.133.0 million and thereby committed taxfraud in terms of section 2(37) of the Sales Tax Act, 1990 read with section 3AoftheFederalExciseAct,2005,punishableundersections 33(2)(5)(6)(8)(11)(13)(16) of the Sales Tax Act, 1990.
3.The learned counsel for the petitioner contended that the petitioner, who is the sole proprietor of Messrs Allah Tawakal Steel Mill has been falsely implicated in the instant case, due to the mala fide of respondent No.1, as the petitioner and other steel mill owners have been litigating against the Sales Tax Department on different issues, which were resolved in their favour. He further contended that the prosecution has no incriminating material to connect the petitioner with the alleged commission of the offence. He submitted that the alleged tax liability is yet to be determined by the Adjudicating Authority and prior to that, no coercive measures, including arrest could be effected. In this regard he has placed reliance on the case of The State through Collector of Sales Tax v. Muhammad Ashfaq Ahmed and others (2006 PTD 286). He further submitted that punishment of none of the offences alleged to have been committed by the petitioner falls within the prohibitory clause of section 497, Cr.P.C. He argued that the case of the petitioner is that of further enquiry and he is entitled to bail. He further argued that the petitioner is entitled to bail even on medical ground as he is suffering fromacuteheartdisease,whichfactisevidentfromletterdated20-8-2011, issued by the Additional Medical Superintendent, Punjab Institute of Cardiology. Lahore.
4.Conversely, the learned counsel for the complainant contended that the prosecution has collected sufficient material to prove the fact of tax evasion of huge amount by the petitioner and has committed taxfraud by practising fraud. He further contended that the petitioner has caused a colossal loss to the public exchequer, which is an offence against society. He argued that the criteria for grant of bail in white collar crimes is entirely different from the other crimes. He further argued that mere fact that the offences do not fall within the prohibitory clause of section 497, Cr.P.C. does not entitle the petitioner to bail as the grant or refusal of bail is the discretion of court, and while exercising such discretion the court has to consider the facts and circumstances of each case.
5.Argument heard. Record perused.
6.The petitioner is alleged to have evaded sales tax to the tune of Rs.123.0 million and Excise Duty in the sum of Rs.10.0 million, the total of which becomes Rs.133.0 million. Admittedly, the alleged liability of Rs.133.0 million is yet to be finally determined by the competent authority. In the circumstances, prior to final determination of tax liability by the competent forum/authority, commission of the offence becomes a matter of further enquiry, entitling the petitioner to the concession of bail. Even otherwise, the petitioner is also entitled to bail, on medical ground. As per the report submitted by the Additional Medical Superintendent, Punjab Institute of Cardiology, Lahore, he is suffering from heart disease and two of three arteries of his heart show severe narrowing. It is also stated that he needs to take medicine regularly and an easy access to hospital with Heart treatment facilities. In view of the physical condition of the petitioner, his further incarcerationinjail mayputhislifeatstakeastreatmentofsuchlike patients is not possible in jail,especiallyinemergencysituation.In the circumstances, the petitioner is held entitled to the concession of bail.However,asthepetitionerisallegedtohavecausedahugelossof Rs.133.0 million to the national exchequer through evasion ofsales tax, the ends of justice would be served to release him on bail subjectto the condition of deposit of 5%ofthetotalallegedliabilityof Rs.133.0 million with the concerned authority/department, on the analogyofpenaltyprovidedundersection 33(5)oftheSalesTaxAct, 1990, along with submission of bail bonds in the sum of Rs.500,000 (Rupeesfive lac),withtwosureties,eachinthelikeamount,tothesatisfactionofthelearnedtrial Court. The deposit of 5%ofthetotal allegedlyliabilityshallbesubjecttothefinaloutcomeof thetrial.
M.W.A./S-68/LBail granted.