Inadmissible input tax adjustment: arrest warrants of 32 persons issued

Special Judge Customs, Taxation and Anti-Smuggling, Lahore, on Wednesday issued arrest warrants of owners of 26 manufacturing/trading concerns during the hearing proceedings in case FIR No 25/10 dated 30.11.2010, registered by the Directorate of Intelligence & Investigation, FBR on charges of inadmissible input tax adjustment by them.
Arrest warrants were issued by the Special Judge on the application filed by the Investigating Officer/Deputy Director, Directorate of Intelligence & Investigation, FBR, Lahore. The application stated that while owners of 26 concerns were required to join investigation in case FIR No 25/10 dated 30.11.2010, they neither joined the investigation nor responded to time and again communication regarding claim of inadmissible input tax adjustment by them and recovery thereof.
The Directorate of Intelligence and Investigation, FBR, Lahore, had earlier busted a gang of mega tax fraudsters, involved in evasion of sales tax to the tune of Rs 2.4 billion and in consequence thereof criminal proceedings had been initiated against them. As a result thereof, an amount of Rs 800 million has already been recovered/secured from the culprits, in favour of the national exchequer. The Customs Court issued warrants of the said 26 business concerns as they failed to respond to the charges levelled against them in the FIR. The list of arrest warranties along with the evaded sales tax is as following:
(a) M. Yousaf Engineering Works, Lahore Rs, 11,120.381
(b) Abdullah & Hurts Casters, Lahore Rs, 6,913,990
(c) Raffay Printers, Lahore Rs 5,834,563
(d) Husanain Ilyas Printers Lahore Rs 3,648,746
(e) Chaudhary Auto and Agricultural Industries Rs 3,474,955
(f) Maqbool and Brothers, Lahore Rs, 3,303,308
(g) Town Carier Printers, Faisalabad Rs 3.093,409
(h) Rakson Engineers, Lahore Rs 3.061,395
(i) Ali Subhan Packages (Pvt) Ltd, Faisalabad. Rs 3,002,718
(j) Power Electronics Pakistan (Pvt) Ltd Rs 2,559.453
(k) Khan Packages, Rawalpindi Rs, 2,856,766
(l) Solo Tech, Lahore Rs 2,856,76
(m) Tariq Poly Pack (Pvt) Ltd, Lahore Rs 2,906.585
(n) Graphic Media Corporation, Lahore 2,892,94
(o) Bilal Packages, Faisalabad. Rs, 3,920,638
(p) Bannu Hashim Traders, Gujrat Rs 4,094,051
(q) Farooq Mughal & Company, Balakot Rs 2,737,694
(r) Unique Business Systems, Rawalpindi Rs, 3,878,411
(s) Dynamic Printers, Lahore Rs, . 8,996,686
(t) AS Enterprises, Lahore Rs 3,968,669
(u) Anmol Plastic Industries, Lahore Rs 2,533,530
(v) Ideal Business Products, Peshawar Rs 5,4,29,122
(w) Al-Haram Packages, Multan Rs 3,268.062
(x) Ira Imaging (Printing & Publishing), Lahore 3,001,098
(y) A.K. Enterprises, Rawalpindi Rs 4,034,892, and
(z) Al-Noor Grinding Mill, Lahore Rs 2,940,476
Total Rs 103,048,165. FBR Lahore sources told Business Recorder that in addition to the above units, arrest warrants of 6 accused persons, who facilitated the tax fraud by issuing fake sales tax invoices, on behalf of the dummy supplier units, have also been issued.
They include Asif Hanif, Iftikhar Ali Khan, Muhammad Azam, Sajid Hussain, Imran, Muhammad Fayyaz. Sources said that the Directorate of Intelligence and Investigation, FBR, Lahore, has already constituted teams for arrest of the aforesaid 32 persons/owners of the manufacturing/trading concerns in pursuance of the orders of the court of Special Judge, Customs, Lahore and, accordingly, raids were underway.
Sources said that the Directorate of Intelligence and Investigation, FBR, Regional office, Lahore, has registered an FIR against 32 tax evaders, involved in claim of illegal input tax adjustment on the basis of fake sales tax invoices, issued by a cartel of fraudsters. The quantum of evasion detected in this scam runs into Rs 613 million. Ejaz Latif, the mastermind of the fraudsters, involved in issuance of fake sales tax invoices has been arrested and record has been recovered from the mastermind which includes user IDs, pincodes, passwords, sales tax returns, correspondence with FBR regarding sales tax registration and NTN issuance, discrepancy notices of various units and formats of fake sales tax invoices of fake/fictitious units.
Sources said that the mastermind admitted before the investigating team that he was operating 20 fictitious units for generating fake sales tax invoices. Further, disclosures were expected. The tax evaders include units engaged in manufacturing and supply of automobiles, plastics, paper, textiles, etc. The manufacturers/traders against whom FIRs has been lodged, amongst many others, include Chenab Engineering Works, Faisalabad involved in sales tax evasion of Rs 50 million, Hi-Tech Electrical Engineering & Services, Lahore involved in sales tax evasion of Rs 19 million, Star Asia, Lahore involved in sales tax evasion of Rs 17.60 million, Malik Board and Paper Industries (Pvt) Ltd involved in sales tax evasion of Rs 12.18 million, Lahore, M. Yousaf Engineering Works, Lahore involved in sales tax evasion of Rs 21 million, Haq Brothers, Lahore involved in sales tax evasion of 9.8 million, Sachal Construction (Pvt) Ltd, Islamabad involved in sales tax evasion of 9.3 million, Al-Badar Engineering Company, Lahore involved in sales tax evasion of 9.1 million, Ghraphic Systems, Lahore involved in sales tax evasion of 6.7 million, Excel Solutions (Pvt) Ltd, Lahore involved in sales tax evasion of Rs 6.6 million, etc. Up till now, Tayyab Ibrahim Director of Sachal Construction (Pvt) Ltd, Islamabad, Abdul Qayyum owner of Star Asia, Lahore and Jamil Ahmad Meyo owner of Hi-Tech Electrical Engineering & Services, Lahore have been arrested. Investigation teams are raiding premises of other nominees whose names are included in the FIR. Informed sources revealed that this new detection of Rs 613 million in the already detected amount of Rs 1506 million, thus totalling the amount of tax evasion to Rs 2,119 million in this case. On the other side, the number of fake suppliers has risen to 110 and number of beneficiaries units rises to 1785. It may also be reminded that out of the detected amount of Rs 2119 million Rs 692 million has already been recovered from the tax evaders and for the rest, efforts are under way to recover the same.
Besides the above, the Directorate of Intelligence and Investigation, FBR, Regional office, Lahore has also registered a criminal case vide FIR No 29/10 dated 10.12.2010 against Ali Riasat Steel Industry, Lahore involved in tax fraud of Rs 50 million. Furthermore, an accused Atif Butt has been arrested in case FIR No 06/10 dated 13.05.2010 registered against Humaria Enterprises, Lahore involving an evasion of sales tax to the tune of Rs 230 million. Another accused Furqan Ahmad Rind has also been arrested by the Directorate in Humaria Enterprises, Lahore' case. Further investigations are underway.