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Two sugar mills: arrest warrants for directors, management issued




  • Large Taxpayer Unit (LTU) Lahore has approached Special Judge Customs, Taxation and Anti-Smuggling, who has issued arrest warrants of directors and management of two sugar mills for committing fraudulent evasion of Federal Excise Duty (FED) in Sales Tax mode.

    According to the details, two sugar mills falling under the jurisdiction of LTU Lahore have committed tax evasion. In the first case, the analysis of monthly sales tax and federal excise returns and its comparison with the Special Return filed showed that the sugar mill has deliberately subverted legal provisions and are guilty of fraudulent evasion of Federal Excise Duty (FED) in Sales Tax mode amounting to Rs 154,142,462/-which was required to be paid during the tax period January, 2015. This fraudulent evasion of FED is established from deliberate misstatement of their FED liability vide their sales tax/FED returns filed for the tax period January, 2015 wherein they sold white crystalline sugar weighing 32,900 MT but declared its value at Rs 12/Kg as against prevailing rate of Rs 48/kg and did not pay FED on supplies of 309,885 bags of sugar. Resultantly FIR bearing No: 1/2015 dated 17-03-2015 was lodged against the company, its management and directors, report said.

    It said that the taxpayer filed Writ Petition bearing No: 8228/2015 for quashment of the FIR. However, the writ was dismissed on merit vide order dated 24-03-2015. Against this order, the taxpayer filed an ICA bearing No 458/2015. The Divisional Bench on 11-05-2015, on commitment by the legal counsel of the taxpayer, ordered the taxpayer to make upfront payment of Rs 45 million within three days and balance amount in five equal weekly installments. However, the taxpayer has not honoured their commitment before Lahore High Court till date. The ICA is still pending before the Lahore High Court and no stay has been granted.

    Since the taxpayer failed to join investigation and their directors and management was not available at their known addresses the Investigating Officer approached the Special Judge Customs, Taxation and Anti-Smuggling for issuance of arrest warrants. Bailable warrants of arrest were issued by the Special Judge against the directors and management of the company. The Investigating Officer has tried to make compliance of the warrants issued by the Special Judge. However, the directors and nominated management is not available on their known addresses and are deliberately trying to subvert due process of law.

    In the second case, analysis of monthly sales tax and federal excise and its comparison with the Special Return filed showed that the sugar mills has deliberately subverted legal provisions and is guilty of fraudulent evasion of Federal Excise Duty (FED) in Sales Tax mode amounting to Rs 113,619,198/-which was required to be paid during the tax periods December, 2014 and January, 2015. This fraudulent evasion of FED is established from deliberate misstatement of their FED liability vide their sales tax/FED returns filed for the tax periods of December 2014, wherein they sold white crystalline sugar weighing 20,474.20 M.T but declared its value at Rs 4.72/kg as against prevailing rate of Rs 48/kg and January 2015, wherein they did not pay FED on 263,646 bags of sugar. Resultantly FIR bearing No: 2/2015 dated 17-03-2015 was lodged against the company, its management and directors.

    The taxpayer filed Writ Petition bearing No: 8229/2015 for quashment of the FIR. However, the writ was dismissed on merit vide order dated 24-03-2015. Against this order, the taxpayer filed an ICA bearing No 457/2015. The Divisional Bench on 11-05-2015, on commitment by the legal counsel of the taxpayer, ordered the taxpayer to make upfront payment of Rs 45 million within three days and balance amount in five equal weekly installments. However, the taxpayer has not their commitment before the Lahore High Court till date. The ICA is still pending before Lahore High Court and no stay has been granted.

    Since the taxpayer failed to join investigation and their directors and management was not available at their known addresses the Investigating Officer approached the Special Judge Customs, Taxation and Anti-Smuggling for issuance of arrest warrants. Bailable warrants of arrest were issued by the Special Judge against the directors and management of the company. The Investigating Officer has tried to make compliance of the warrants issued by the Special Judge. However, the directors and nominated management is not available on their known addresses and are deliberately trying to subvert due process of law, report added.

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