Customs Court frames charge against suspect in bogus sales tax refund case

Bogus Sales Tax Refund

The Customs Court framed charged against Muhammad Jawaid of M/s Friends Enterprises and summons to prosecution witnesses for recording their statements for next date of hearing, in first information report (FIR) for fake/ bogus input and refund of sales tax amounting to Rs681,275 and Rs962,030.

On 19 November 2021, during the hearing, above-mentioned accused appeared before the court along with his counsel, special prosecutor for customs department and investigation officer also attended the court.

Investigation officer of Commissioner Enforcement-I, CTO, Karachi submitted progress report and states that above mentioned company is non-existent at the registered premises declared Saeedabad, Baldia Town, Karachi, it has been further reported that the sales tax registration was suspended and blacking proceeding has been complete by Zone-01 of defunct RTO, Karachi dated Nov 08, 2012 as per database administrator report no refund claim has been sanctioned after issuance of Red Alert.

He further submitted that accused persons involved in running/ operating the fraudster units and beneficiaries and have fraudulently and jointly committed the tax fraud by way of using the fake sales tax invoices and adjusted illegal/ inadmissible input tax and claimed refund on the basis of fake sales tax invoices and fake/ bogus documents by committing this tax fraud, they have deprived national exchequer of its legitimate revenue and have violated the provisions of sales tax act, 1990.

Investigation officer argues that accused person and others are also involved in the scam of issuance/ suing of fake/ flying invoices claiming fake input/ refund or flying invoices without and physical transferred of goods by way of obtaining unlawful/ fraudulent input tax adjustment and proceed of issuance of fakes sales tax invoices in connivance of others suppliers/ buyers in the supply chain and not existent at the declared business premises, which is tantamount to tax fraud in terms of section 2 (37) of the sales tax act, 1990.

After the hearing, the court approved the charge sheet and directed the investigation officer to complete the investigation and submit the final charge sheet on the next date of hearing.

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