Whether a criminal prosecution involving serious allegations of tax fraud can be quashed or throttled at the initial stage under constitutional jurisdiction?

2004 PCRLJ 974

AKHTAR MUHAMMAD Versus FEDERATION OF PAKISTAN through Federal Secretary Interior, Islamabad and 11 others

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Citation2004 PCRLJ 974

CourtSindh High Court

Case No.Constitutional Petition No. D‑1627 of 1999

Judge(s)Nazim Hussain Siddiqui, C.J. and Ghulam Rabbani

Authored byGhulam Rabbani

ResultPetition dismissed

AI Summary — generated from this judgment; read the full text below and verify before relying on it.

This Constitutional petition was filed by an employee of a private company seeking the quashing of First Information Report No. Appg.-116/Dg-I dated 25-9-1998, lodged by the Directorate-General Intelligence (Customs and Excise), Karachi. The petitioner was alleged to have connived in the illegal dumping and disposal of raw material cleared from Karachi Port for warehousing at Peshawar and finished goods at Lahore, thereby defrauding the exchequer of legitimate revenue. The petitioner contended that the F.I.R. was mala fide, ultra vires, and without jurisdiction, especially as related proceedings were pending before the High Court of Peshawar. The respondents argued that a formal complaint had been submitted to the Special Judge (Customs and Taxation), Karachi, who had taken cognizance under the law. The High Court held that serious allegations of tax defraudment existed and that criminal prosecution at this stage could not be throttled from proceeding. Consequently, the petition was dismissed in limine.

Questions settled in this judgment

Whether a criminal prosecution involving serious allegations of tax fraud can be quashed or throttled at the initial stage under constitutional jurisdiction?

Laws & provisions referred

Section 16, Customs Act 1969
Section 18, Customs Act 1969
Section 19, Customs Act 1969
Section 32, Customs Act 1969
Section 88, Customs Act 1969
Section 89, Customs Act 1969
Section 97, Customs Act 1969
Section 104, Customs Act 1969
Section 111, Customs Act 1969
Section 112, Customs Act 1969
Section 156(1), Customs Act 1969
Section 185-A(6), Customs Act 1969
Section 3, Sales Tax Act 1990
Section 6, Sales Tax Act 1990
Section 33, Sales Tax Act 1990
Section 34, Sales Tax Act 1990
Section 36, Sales Tax Act 1990

quashing of FIRconstitutional petitionCustoms ActSales Tax Acttax evasioncognizanceSpecial Judge Customs and Taxationthrottling prosecution

ORDER

GHULAM RABBANI, J.‑‑‑ The petitioner claiming to be an employee of respondent No.9, Messrs Shafi Industries (Pvt.) Ltd. Peshawar has stated that he alongwith others has been involved by the respondent No. 2 in F. I. R. No. Appg.‑116/Dg‑I, dated 25‑9‑1998 lodged in the office of the respondent No.3, the Directorate‑General Intelligence (Customs and Excise), Karachi under sections 16, 18, 19, 32, 88, 89, 97, 104, 111, 112 of Customs Act, 1996 punishable under clauses 10‑A, 14, 50, 62, 77, 81 and 82 of section 156(1), sections 3, 6, 33, 34 and 36 of the Sales Tax Act, 1990. It is alleged that the said F.I.R. is mala fide, ultra vires and without lawful authority and jurisdiction. According to petitioner the said F.I.R. alongwith some show‑cause notices, have been challenged by the respondent No.9 before the High Court of Peshawar in Writ Petition No.360 of 1999, in which, it has been ordered that status quo be maintained. He has prayed that the said F.I.R. with all subsequent proceedings thereto be quashed.

2. On behalf of the respondents Nos.2 and 3 viz. the Intelligence Officer Directorate‑General and the Director‑General Intelligence and Investigation, Karachi, written submissions have been filed. Briefly stated, it is disclosed therein that the petitioner with mala fide intention and conscious knowledge in connivance with the respondent No.9 has been instrumental in dumping and disposal of raw material cleared from Karachi Port for warehousing at Peshawar so also disposal of the finished goods at Lahore. It is alleged that the petitioner by his aforementioned acts done in league with other accused has deprived the exchequer to its huge legitimate revenues; therefore, respondents Nos.2 and 3 have acted properly and in accordance with law. The complaint/information pertaining to the commission of offence in writing has been laid before the Special Judge (Customs and Taxation), Karachi who has taken cognizance thereof under section 185‑A(6) of the Customs. Act and the matter is pending before him.

3. We have heard learned counsel for the parties and have examined the material available on record.

4. It appears that the petitioner alongwith other co‑accused have been challaned before the learned Special Judge (Customs and Taxation) to face trial under section 156(i)(14)(77)(81)(82) of Customs Act and other provisions of Sales Tax Act. The prosecution at this stage cannot be throttled from proceedings against the accused. Admittedly, there are serious allegations of defraudment of the taxes against the accused.

5. By our short order, dated 18‑1‑2000, we had, therefore, dismissed this Constitutional petition in limine alongwith listed application and these are the reasons for the same.

H.B.T./A‑36/K Petition dismissed.