Tax evasion: FIR lodged against leading female fashion designer

An FIR has been lodged against a leading female fashion designer of Chaklala Scheme-III, Rawalpindi involved in tax fraud on the complaint of Director General, Intelligence & Investigation (IR) Islamabad.
Sources told Business Recorder here on Monday that a credible information was received by the Directorate General (Intelligence & Investigation - Inland Revenue) Islamabad, that manufacturer-cum-retailer of women designer dresses situated at Chaklala Scheme III, Rawalpindi is involved in tax fraud as defined under section 2(37) of the Sales Tax Act, 1990.
Preliminary investigation in the matter has revealed that fashion designer ("the accused") was "liable to be registered" in Sales Tax under section 2(25) of the Sales Tax Act 1990, read with Rule 4 (a) and 4(b) of The Sales Tax Rules 2006, and SRO 1125(I)/2011. However, the accused failed to get registered and instead concealed its true sales from the department knowingly and dishonestly to evade taxes.
In order to obtain material evidence, search of premises of the accused was carried out after obtaining prior approval from Magistrate and in accordance with section 40 of the Sales Tax Act, 1990 and relevant provisions of Code of Criminal Procedure, 1898. Documents, record and computer systems were taken into custody and were examined under the law.
Data available in the computer of Zaheer, employee of fashion designer and scrutiny of other documents impounded showed that the accused made taxable supplies from tax years 2012 to January 2015 amounting to Rs 242 million, whereas the accused declared sales of only Rs 9.3 million with tax authorities in the same period, and particularly avoided the minimum threshold of registration in sales tax by keeping its annual declaration under Rs 5 million. The taxable supplies were made from three outlets of the accused located in Islamabad, Rawalpindi and Lahore. Sales tax on these supplies was due as per SRO 1125 of 2011, but was evaded knowingly and dishonestly.
Moreover, it is also established that the accused is maintaining benami accounts in the name of its employee and husband and two such accounts are traced, one in the name of husband of the accused and the other in the name of Zaheer, employee of the accused. These undeclared benami accounts were maintained to evade taxes and to keep illegal transactions out of books.
In the light of evidence on record and the facts reported above, it has been established that fashion designer has violated sections 3(1)(a), 6, 7, 22(1), 23(1), 26, 73 of the Sales Tax Act, 1990 and committed tax fraud in terms of section 2(37) and punishable under sections 33(7), 33(11) & 33(13) of the Sales Tax Act, 1990 read with Sections 37A and 37B of ibid. Hassan bin Izhar, Assistant Director I&I-IR Islamabad, has been appointed as the Investigation Officer in the case.