ATTA UL HAQ SIDDIQUI vs THE STATE

ORDER

' RAHMAT HUSSAIN JAFFERI, J.---Facts giving rise to the present Petition for grant of bail, as mentioned in the F.I.R. Lodged by Dr. Saifuddin, Deputy Director, Directorate General of Intelligence and Investigation (Customs, Excise and Sales Tax), Karachi on 24-11-2005, are as under:-- "An information was received through the Director General. Directorate General of Intelligence and Investigation (Customs, Excise and Sales Tax) B-70, KDA Scheme No, 1, Karsaz Road, Karachi, that a person namely Attaullah Siddiqui, Proprietor of Messrs Quality Export International, located at Plot No,166-167, Sector 32-A, Korangi Industrial Area,Karachi, manufacturer/exporter of Terry Towel have been claiming fraudulent refund of sales tax against fake invoices of various supplier. A preliminary investigation was initiated to verify the given information. During the course of scrutiny of the computerized sales tax profile of above named exporter it reveled that invoices of suppliers against which the sales tax refund has been claimed are fake'and non-existent. Accordingly, the premises of Messrs Quality Export International was physically verified by the staff of Directorate of Intelligence, Karachi and it was found that no such unit exists at the given address i.e, Plots Nos.166- 167, Sector 32-A. Korangi Industrial Area. Karachi. It is, therefore, established that Messrs Quality Export International, Karachi, is a fake claimant of sales tax refund. An amount of Rs,62,367,437 has been sanctioned so far by the concerned officials of Collectorate of Sales Tax (Enforcement).

Karachi, against invoices of non-existence suppliers.

' Thus Messrs Quality Export International Karachi have fraudulently claimed and got sanctioned inadmissible sales tax refund amounting to Rs,62,367,437. Which is recoverable from them under section 36(1) of the Sales Tax Act, 1990, besides criminal proceedings under sections of law as enumerated in column No,8 of the F.I.R."

2. Learned advocate for the petitioner has stated that the prosecution rest their case on three allegations (i) fake invoices, (ii) nonexistence of unit and (iii) non-existence of suppliers; that the prosecution have not collected any evidence to support the above allegations; that heir record shows that the suppliers are in existence, therefore, the allegations of non-existence of suppliers and fake invoices have been belied by. Their own record. He has further stated that the unit is in existence and doing its business.

3. Conversely, learned Standing Counsel has stated that the prosecution have collected sufficient material to show that the invoices were fake, the suppliers were non-existent and that there was no existence of factory. On enquiry about the evidence to support the above points, learned Standing- Counsel has gone through the police papers and stated that the investigating officer has recorded the statements of three witnesses namely Muhammad Salman, Auditor, Abdul Waheed Khan, Deputy Superintendent, and Kashif Naseer, Auditor, all of Sales Tax Department. He was asked to read the statements of all the three witnesses. After reading the said statements, learned Standing Counsel conceded that none of these witnesses gave evidence with regard to the allegations mentioned in the F.I.R. He was further enquired as to whether the investigating officer collected any documents from anyofficer and recorded the statement of such officer, to which he verified the record and stated that no such statement was recorded through which the witness produced the documents before the investigating officer. However, he has submitted that bulk of documents are available in police file but without further proof as to who had produced the said documents before the investigating officer.

4. In these circumstances, we are astonished to see the investigation being conducted in this type of cases involving crores of rupees. It appears that the investigating officer does not know as to how to conduct the investigation and to collect the evidence so as to prove the allegations. This is a very serious matter. The concerned department should examine this question and take positive steps to improve the quality of investigation.

5. From the above position apart from the statements of above mentioned three witnesses, who have not supported the allegations made in the F.I.R. There is no other evidence collected by investigating officer so far to prove the said allegations. As such the case of the petitioner requires further enquiry within the meaning of subsection (2) of section 497, Cr.P.C. Therefore, the petitioner is entitled to the concession of bail.

6. In the circumstances, we grant bail to the petitioner in the sum of Rs,500,000 (five hundred thousand) on furnishing solvent surety with PR bond in the like amount to the satisfaction of trial Court.

' The petition is allowed along with the listed items.

' A copy of this order be sent to Member Law Central Board of Revenue, Islamabad, for taking necessary steps to improve the quality of investigation, otherwise the cases will be spoiled at the initial stage, which will be detrimental to the department as well as to the Country.