The STATE through Commissioner Inland Revenue VS AHMED ALI KHAN, 2017 PTD-LAHORE-HIGH-COURT-LAHORE 107 (2016)

(a) Sales Tax Act (VII of 1990)---

----Ss.33(5), 33(11) & 33(13)---Offences and penalties---Failure to deposit tax amount---Issue or use a document which was forged or false---Tax fraud---Accused were charged with allegations that they were involved in charging sales tax on fake invoices and they were not depositing the same in the government exchequer, thus had caused huge loss to national exchequer---Trial Court convicted accused persons on basis of confessional statements---Validity---Filing a Constitutional petition, rather than revision against an order passed on confessional statement of accused, carried no weight---Non-mentioning of exact amount in charge sheet by Trial Court was not fatal so as to vitiate whole proceedings---Accused persons were convicted under Ss. 33(5), 33(11) & 33(13) of Sales Tax Act, 1990---Revision petitions were disposed of accordingly.

(b) Criminal Procedure Code (V of 1898)---

----S.412---No appeal in a case when accused pleads guilty---Conviction was recorded on basis of confessional statement, law even ousted remedy of appeal as enshrined in S.412, Cr.P.C.

Muhammad Khalid Chaudhary assisted by Ch. Aftab Maqsood for the State.

Ahmad Awais, Saeed Ahmad Cheema, Abdul Waheed and Muhammad Hammad for Respondents.

Date of hearing: 29th June, 2016.

JUDGMENT

ABDUL SAMI KHAN, J.---Through the captioned revision petitions under section 439, Cr.P.C. read with section 561-A, Cr.P.C. the State has called in question impugned order dated 12.12.2009 passed by the learned Special Judge Customs Taxation and Anti-Smuggling, Lahore through which he has convicted Ahmad Ali Khan, Muhammad Ali Khan and Saadat Ali Khan respondents for offences under sections 33(5)(11)(13) of Sales Tax Act, 1990 and sentenced them to imprisonment of a period which they have already undergone. The respondents were further ordered by the learned trial court to pay fine of Rs. 3000/- each or in default of payment of fine to further undergo simple imprisonment for 15 days each. The State has filed the captioned revision petitions for suitably enhancing the period of their sentences and the amount of fines.

2.Precisely, the germane events leading to the filing of these revision petitions are that the respondents were booked in case FIR No. 16/02, dated 20.08.2002 registered at Police Station Collectorate of Sales Tax and Central Excise, Customs House, Lahore in respect of offences under sections 37-A and 37C(c) of Sales Tax Act, 1990 with the allegations that the respondents were involved into charging sales tax on fake invoices and they were not depositing the same into the Government Exchequer and in this way they have caused huge loss to the national exchequer. During investigation the respondents were found guilty and after completion of investigation of the above mentioned criminal case report under section 173, Cr.P.C. was submitted before the learned trial court. The respondents were summoned to face trial by the learned trial court and during trial proceeding the respondents confessed their guilt inasmuch as they have left themselves at the mercy of learned trial court to take lenient view. The respondents have also got recorded their statements in this regard in which they have confessed their guilt without any coercion or duress. On the basis of their confessional statements the learned trial court has convicted and sentenced them as mentioned in paragraph No. 1 of the judgment.

3.Learned counsel for the petitioner/State contends that the respondents have caused a huge loss to the national exchequer to the tune of Rs.2,04,60,105/- by charging tax on the basis of fake invoices. The respondents themselves opted to make statements wherein they confessed their guilt which fact proves set of allegations levelled against them in the FIR. The maximum punishment provided under the statute is five years along with fine of Rs. 25000/- as well as amount equal to loss caused to the national exchequer whichever is higher and the punishment recorded by the learned trial court is not in consonance with the offences committed by the respondents.

4.On the other hand learned counsel for the respondents at very initial stage raised objection to the maintainability of these revision petitions. He further contends that during the course of investigation the respondents remained under incarceration and after changing their plea the learned trial court by exercising his discretion deems it appropriate to award imprisonment to them to that extent which they have already undergone. The learned counsel goes on to state that law has also conferred discretion upon the learned trial court either to award fine or to award one hundred percent of the amount of tax involved so the learned trial court has deemed it appropriate to exercise its discretion by imposing fine of Rs. 3000/- each along with imprisonment of period which they have already undergone and it has not awarded total loss of tax involved, so the discretion exercised by the learned trial court needs not to be interfered by this Court. The amount or tax evasion is not mentioned in the charge which has been framed by the learned trial court on generalized manner for which the respondents cannot be convicted and sentenced.

5.After hearing the learned counsel for the parties and going through the impugned order dated 12.12.2009 it has been observed by this Court that at the very initial stage of arguments learned counsel for the respondents have raised preliminary objection with regard to maintainability of these revisions petitions as according to him at the time of filing of these revision petitions no specific provision or procedure in respect of assailing order of learned Special Judge Customs, Lahore was provided in Sales Tax Act, 1990. To addendum his argument in this regard he has submitted that writ petitions were competent against the impugned order passed by the learned Special Judge Customs, Lahore rather than the instant revision petitions. I have taken this preliminary objection with great concern and observed that although section 37F was inserted by Finance Act, 2010 (XVI of 2010) on 30th June, 2010 in Sales Tax Act, 1990, i.e. after filing the instant revision petitions yet the fact remains that by virtue of induction of supra section in Sales Tax Act, 1990 the previous procedure of filing revision petitions against impugned order of learned Special Judge Customs, Lahore has been recommended and justified as such the suggestion of filing a writ petition against an order passed on confessional statement of accused by learned Special Judge Customs, Lahore, as stated by learned counsel for the respondents, carries no weight. During course of arguments learned counsel for the respondents has also highlighted that exact amount of tax evasion has not been mentioned in the charge so without determining the loss cause to national exchequer charge could not be proved against the respondents. In this context I may observe here that non-mentioning of exact amount in, the charge-sheet by the learned trial court is not fatal to vitiate the whole proceedings against them. It may not be out of place to point out here that this Court has ample power to cure this discrepancy by exercising the provisions enshrined in section 225, Cr.P.C. which are reproduced as under:--

"225. Effect of errors. No error in stating either the offence or the particulars requited to be stated in the charge, and no omission to state the offence or those particulars, shall be regarded at any stage of the case as material, unless the accused was in fact misled by such error or omission, and it has occasioned a failure of justice."

Even otherwise in the whole proceedings conducted by the learned Special Judge Customs, Lahore the amount of tax evasion mentioned in report under section 173, Cr.P.C. has not been questioned by the respondents who after accepting accusation against them have got recorded confessional statements without any duress and coercion and requested the learned trial court to take lenient view against them.

6.Now adverting to the merits of the case, it has been observed that during trial proceedings the respondents have opted to confess their guilt by recording their confessional statements after submission of report under section 173, Cr.P.C. and framing of charge against them so in this way they have left themselves at the mercy of learned Trial court to be punished them by taking lenient view. A perusal of their statements shows that before professing their guilt the respondents were duly afforded opportunity to think over the matter with their free mind and they were realized that their confession would open door for the court to record their convictions but the respondents have made statements with their own free will and volition. Thus, in the cases where the conviction is recorded on the basis of confessional statements the law even ousts the remedy of appeal as enshrined in section 412, Cr.P.C. The provisions of section 412, Cr.P.C. are reproduced hereunder:--

"412. No appeal in certain cases when accused pleads guilty.---Notwithstanding anything hereinbefore contained where an accused person has pleaded guilty and has been convicted by a High Court, a Court of Session or Magistrate of the first class on such plea, there shall be no appeal except as to the extent or legality of the sentence."

In the backdrop of such situation the only question to be considered by this Court is now the quantum of sentence passed against the respondents along with fine and imposition of penalty of one hundred percent of tax involved in this case. For this purpose a visitation of section 33(13) of the Sales Tax Act, 2009 has become inevitable which is reproduced as under:--

[33. Offences and Penalties.___ [ ] Whoever commits any offence described in column (1) of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence in column (2) thereof:--

(13) . Any person who commits, causes to commit or attempt to commit the tax fraud, or abets or connives in commissioning of tax fraud ..

Such person shall pay a penalty of twenty five thousand rupees or one hundred percent of the amount of tax involved, whichever is higher. He shall further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the loss of tax involved, or with both .

A perusal of supra provisions of law gives an expressed impression to this Court that this section actually based on two type of punishments, in first part imposition of penalty of twenty-five thousand rupees or one hundred percent of the amount of tax involved whichever is higher is provided whereas in the second portion it has been mentioned that either the culprit can be sentenced to imprisonment which may extent up to five years or he can be liable to pay fine which may extent to an amount equal to the loss caused or with both. I have carefully perused the impugned order passed by the learned trial Court and found that the learned trial Court while convicting the respondents has only touched and considered second portion of punishment of supra provisions whereas it has not taken into considered first portion of section. Even in the first portion two types of punishments have been provided to be awarded to a culprit which are, penalty of twenty-five thousand rupees or one hundred percent of the amount of tax involved, whichever is higher. In my humble view the last three words "whichever is higher" prohibit the court to exercise its discretion to determine the quantum of amount and confined it to award maximum punishment. The learned trial Court has committed illegality by imposing a fine of Rs.3000/- each upon the respondents which is against the spirit of statute. It goes without saying here that committing fraud in refunding of taxes is a crime out and out in the society which is causing great loss to national exchequer. It is a crime against society and the people indulged in such crimes are playing hell with the public at large to face indirect rigors of inflation, unemployment and industrial crackdown, etc. which exercise is otherwise against the norms of natural justice. It is also significant to point out here that previously certain revision petitions carrying similar question of law were allowed by this Court and the judgment in this regard was challenged by the aggrieved person before the Hon'ble Supreme Court of Pakistan through Criminal Petitions Nos. 632-L to 634-L, 644-L to 654-L, 721-L to 729-L, 754-L, to 756-L, 762-L/2015 and the decision of this Court was upheld by the Hon'ble Supreme Court of Pakistan in supra petitions.

6.For what has been discussed above these revision petitions are partly allowed and the respondents are convicted in respect of offences under section 33(5)(11)(13) of Sales Tax Act, 1990 and they are ordered to deposit one hundred percent of the amount involved in this case, which is Rs. 2,04,60,105/- in the learned trial court within a period of six months failing which the learned trial court is directed to adopt all coercive measures provided under the law against the respondents for recovery of their respective share from above said amount. However, the amount already deposited by them during trial proceedings, if any, may be deducted from their respective share. So far as the period of imprisonment of the respondents is concerned, the period of sentence which they have already undergone during their arrest (as convicted by the learned trial court) is upheld and maintained. However, their convictions to the extent of payment of fine amounting to Rs.3,000/- each is hereby set aside. These revision petitions are disposed of with the modification made above.

WA/S-65/L Order accordingly.