Mega sales tax fraud: police get four-day remand of accused Khurram Aftab

The accused person involved in mega sales tax fraud of Karachi is presently in the custody of police on four days remand granted by Judge of Customs and Taxation Court Karachi for detailed investigation in case of fake and flying invoices tax fraud. Sources told Business Recorder, here on Tuesday that the mega sales tax fraud has been detected by the Directorate General of Intelligence and Investigation Inland Revenue (IR) FBR at Karachi.
On a self-initiated scrutiny of data of sales tax returns various registered persons showing nominal payment of net tax, despite huge input/output tax transactions, it has been observed that some unscrupulous elements registered under sales tax are involved in committing tax fraud by issuing fake/flying sales tax invoices.
This clearly reflects violations of section 23 of the Act for generating bogus input tax credit/refunds in favour of recipients of such invoices, thereby involved in filing of incorrect and false sales tax returns in contravention of section 26(l) of the Sales Tax Act, 1990. On physical verification of the premises of M/s Orthodox & Co, the accused registered person was not traceable on his declared address, which indicates that he has deliberately declared wrong or fake address. The notice under section 37 of the Sales Tax Act was also sent through courier on the declared address which was returned undelivered with the remarks of incomplete address. On the other hand the accused R/P has continuously been filing monthly sales tax returns by using the e-filing user ID and password from undisclosed premises and generating fake input tax credit through fake invoices, sources said.
The analysis of information/ details retrieved from FBR's portal/Integrated Tax Management System (ITMS) and information received from other sources, revealed that the illegal/ inadmissible input tax have fraudulently been adjusted by the accused registered person on the basis of fake purchases/input tax declarations through returns as the relevant suppliers have either not declared any sales to the accused registered person in respective returns or they have filed Null returns or were found non-filers. Consequently, the subsequent supplies declared returns by the accused registered persons are patently fake, accordingly sales invoices generated/issued in favour of beneficiaries (names to be incorporated after investigation is completed), against fake supplies have also become fake and bogus, therefore, the accused RIP knowingly, dishonestly and fraudulently involved in filing false sales tax returns and issuance of fake sales tax invoices and thus committed tax fraud.
Sources said that investigation so far conducted in the case revealed that the accused registered person had issued sales tax invoices to M/s Golden Hyderabad during the period December 2010 to March 2011, accordingly verification of purchase invoices and payments from the aforesaid buyer to the supplier was made which indicated that the said buyer has made payments to the accused registered person through banking channel.
Further verification from buyer's bank revealed that 25 cheques worth Rs 17.418 million were issued against purchases from M/s Orthodox & Co, which were cleared through different banks.
Sources said that on further investigation it was revealed that a person namely Khurram Aftab Vohra is the actual proprietor of M/s Orthodox & Co and in his aforesaid capacity maintaining a bank account No 06-6913137 at a bank of North Karachi Industrial Area branch and operating from his office at shop No 8, Madina Centre, Opp Madras Hotel Jodia Bazar, Karachi. On scrutiny of bank details it was confirmed that out of 25 cheques, two cross cheques in the name of Orthodox & Co amounting to Rs 1.463 million were credited to the aforesaid bank account operated by Khurram Aftab Vohra.
During investigation, it was also revealed that the above named accused is also maintaining a number of 'Baynami' bank accounts in the name of M/s Orthodox & Co at two banks and 18 cheques involving amount of Rs 13.283 million were credited in a bank account No 30073010000811 of Orthodox & Co and 02 cheques involving Rs 2.245 million were cleared from KASB Bank Ltd, Hyderi Branch.
In view of the above it is evident that the accused person is the actual proprietor of M/s Orthodox & Co and is involved in running/operating the fraudster unit/firm and beneficiaries (to be incorporated after investigation), has individually and jointly committed the tax fraud by way of issuing fake sales tax invoices and adjusting illegal/inadmissible input tax on the basis of fake sales tax invoices and fake/bogus import.
By committing this tax fraud they have deprived the national exchequer of its legitimate revenue to the tune of Rs 120 million and have violated the provisions of Sales Tax Act, 1990 as mentioned in column No 08 above. FIR has been lodged accordingly. The accused person Khurram Aftab Vohra Proprietor of M/s Orthodox & Co was arrested on February 19, 2012. The arrested accused was produced in the Court of Customs and Taxation Judge Karachi on February 20, 2012. The judge, on request of DD, I&I-IR granted four days remand of the accused for further investigations, sources added.