' M. BILAL KHAN, J.--- This order will dispose of two bail applications titled Muhammad Ishaq Saqi v.
The State (Criminal Miscellaneous No,10404/B of 2006) and Adnan Saqi v. The State (Criminal Miscellaneous No,945/B of 2007), as both these matters arise out of one and the same F.I.R.
2. The petitioners seek post-arrest bail in case F.I.R. No,2 of 2006 dated 3-6-2006, registered with Police Station I&P Cell, Customs Intelligence, Gujranwala for offences under sections 3(1)(a), 4(a), 6, 7, 8, 10(1), 22(1), 23(1), 26(1) and 73 of the Sales Tax Act, 1990 read with sections 2(37), 11(2), 34 of the Sales Tax Act, 1990 punishable under sections 33(3), 33(4), 33(5), 33(11), 33(13), 33(16), 33(17), 33(18), 33(19) (ibid), read with Sales Tax Refund Rules, 2002 vide SRO 575(I) of 2002 dated 31-8-2002 recoverable under section 36(1) of the Sales Tax Act, 1990, further read with sections 37, 37-A and 37-B of the sales Tax Act, 1990.
3. The F.I.R. Had been recorded at the instance of Deputy Director Intelligence and Investigation (Customs, Excise and Sales Tax) Range Office, Gujranwala on 3-6-2006 which runs as under:-- "A credible information was received by the Deputy Director, Intelligence and Investigation (Customs, Excise and Sales Tax) Gujranwala that Messrs Wasif Enterprises, Gali Mehran Hotel Near Cheema Hospital, Daska, Sialkot were involved in fraudulent claim of Sales Tax refund with the connivance of the Officers and staff of Collectorate of Sales Tax, Gujranwala.
(2) Preliminary investigation in the matter has revealed that during the month of November, 2003, December, 2003 and January, 2004 Messrs Wasif Enterprises Gali Mehran Hotel near Cheema Hospital Daska, in connivance with the officers and staff of the Collectorate of Sales Tax and Federal Excise Gujranwala have fraudulently managed to secure illegal/inadmissible Sales Tax Refund to the tune of Rs,89,27,262. The preparation of this tax fraud stands established on the basis of following revelations:--
(i) Two cheques i.e. No,5676562 dated 8-2-2004 for Rs,98,32,716 and 5676563 dated 12-2-2004 for Rs,1,00,00,000 issued in favour of Messrs R.J. Traders Faisalabad the suppliers, have been found fake, as confirmed from Prime Commercial Bank, Paris Road, Chamber of Commerce Building Branch, Sialkot.
(ii) Messrs Wasif Enterprises purchased 386 and 2250 pes. Of Leather Jackets on 11-1-2004 and 13, 15, 16, 17-1-2004 but export has been shown to have taken place on 9-4-2004 and 12-1-2004 i.e. Export has preceded purchase which is logically incorrect.
(iii) Messrs Wasif Enterprises purchased 90,000 meters of Fabrics dated 11-11-2003 to 13-12-2003 from Messrs Karachi Textile Karachi, and exported on 13-11-2003 from Lahore, again logically impossible.
(iv) Sales Tax invoices issued by Messrs Karachi Textile Karachi are not serial-wise as the earlier numbered invoices have been issued on later dates i.e. Against the chronological order.
(v) There are three suppliers i.e. Messrs R.J. Traders Faisalabad, Messrs Karachi Textile, Karachi and Messrs Sheikh Tanners Kasur. All of these units have been reported by the respective Collectorates as being suspected/black listed ones.
(vi) The physical verification of the premises of Messrs Wasif Enterprises, Gali Mehran Hotel, near Cheema Hospital Daska, has confirmed that no such unit exists at the said address.
(vii) None of the suppliers exist on the given addresses.
(viii) It is also added that as intimated by the Collectorate of Sales Tax and Federal Excise Faisalabad vide letter No,IV-ST(4) HQ/45/05/555 dated 28-3-2006, the firm namely Messrs ,R.J.
Traders Faisalabad has been declared as black listed.
' The details regarding the suppliers and refund obtained is as follows:-- S. No, Name of Supplier Refund claimed Rs, Refund paid Rs 1 Messrs Karachi Textile26,48,284 26,48,284 2 Messrs Sheikh Tenners36,92,101 36,92,101 3 Messrs R.J. Traders 25,86,877 25,86,877 Total 89,27,262 89,27,262
4. In the light of the evidence on record and the facts reported above it stands established that above Wasif Rasool son of Ghulam resident of Chak No,88 Fateh Pur P.O. Khas Tehsil Hasilpur, District Bahawalpur, proprietor of Messrs Wasif Enterprises, Daska in collaboration with Messrs R.J.
Traders, Messrs Sheikh Traders and Messrs Karachi Textile have fraudulently claimed and drawn the amount of Sales Tax to the tune of Rs,89,27,263 with the connivance of the concerned officers and staff of Collectorate of Sales Tax, Gujranwala. In this manner the accused have violated the provisions of sections 3(1)(a), 4(a), 6, 7, 8, 10(1), 22(1), 23(1), 26(1) and 73 of the Sale Tax Act 1990 read with sections 2(37), 11(2), 34 of the Sale Tax Act, 1990, punishable under sections 33(3)(4)(5), 33(11), 33(13)(16)(17)(18)(19) (ibid) read with Sales Tax Refund Rules, 2002 vide SRO 575(1)12002 dated 31-8-2004 recoverable under section 36(1) of the Sale Tax Act, 1990 further read with sections 37, 37-A and 37-B of the Sales Tax Act, 1990.
' Report is submitted for lodging F.I.R. Against the above accused persons. A copy of F.I.R. Showing No, and date may be sent to undersigned for further proceedings.
' Report for lodging of F.I.R. In English, bearing signature of Mr. , Muhammad Saqif Saeed, Deputy Director, Intelligence and Investigation (Customs, Excise and Sales Tax) Gujranwala received and entered in the register vide F.I.R. No,2 of 2006 dated 3-6-2006 and copy forwarded to all concerned for further necessary action."
5. The petitioner Muhammad Ishaq Saqi was arrested in the instant case on 2-10-2006 whereas Adnan Saqi was arrested on 13-12-2006 and are in custody ever since. Their application for post- arrest bail had been dismissed by the learned Special Judge, Customs and Anti-Smuggling, Lahore vide orders dated 30-11-2006 and 5-1-2007 respectively. Hence these petitions.
6. It was argued by Dr. A. Basit, Advocate, the learned counsel for Muhammad Ishaq Saqi petitioner, that the latter was a qualified accountant by profession and operates as an independent accountant privately from Lahore; that during the period 2001-2006 a large number of firms in Lahore, Gujranwala and Sialkot had utilized his services as an accountancy expert; some of these firms used to claim refund on exports made by them; that the petitioner in his capacity as a private accountant was only required to scrutinize the relevant claims for refund already formulated by his clients prior to their submission to the competent authorities and that his involvement was confined to preparing all refund cases; that one Sh. Muhammad Shafique who had been a client of the petitioner had falsely involved the petitioner in case F.I.R. No,161 of 2006, for an offence under section 489-F, P.P.C. Registered with Police Station Gulberg, Faisalabad; that in order to frustrate the release of the petitioner in the aforesaid case (F.I.R.. No,16'1 of 2006) aforesaid Sh. Muhammad Shafique has manoeuvred registration of F.LRs, Nos.2, 3 and 6 with the I&P Cell Customs.
Intelligence and Investigation, Gujranwala; that by his machinations Sh. Muhammad Shafique has ensured continued incarceration of the petitioner; that there is no allegation against the petitioner that he had any beneficial interest, with the registered exporters against whom fraud in export refund has been alleged; even according to itself no role has been ascribed to the petitioner and his name does not feature on the same; that as already stated the petitioner was never the real beneficiary of obtaining refund and not only that he was not even remotely connected with any of the firms which had claimed and procured refund; that no recovery could be effected from the petitioner although he had undergone full statutory physical remand of 14 days; that none of the offences charged with attracts the prohibitory clause of section 497(1), Cr.P.C. Which entitles the petitioner to the concession of bail as a matter of right. The learned counsel for the petitioner heavily relied on the case of Tariq Bashir and 5 others v. The State PLD 1995 SC 34.
7. Mian Muhammad Abbas, Advocate the learned counsel for Adnan Saqi, petitioner has adopted the arguments addressed by Dr. A. Basit, Advocate, the learned counsel for Muhammad Ishaq Saqi petitioner.
8. On the other hand Mr. M. Nawaz Cheema, the learned Legal Advisor to Customs Department, M.
Saqif Saeed, Deputy Director Intelligence and Investigation (Customs, Excise and Sale Tax)
Gujranwala assisted by Haider Ali Khan, S.I.O. Customs, fiercely opposed the grant of bail to the petitioners. It was argued that in the investigation held so far a fraud of Rupees 90 million has been detected; that this amount of Rupees 90 million has been received by the petitioner and his co- accused through absolutely dubious invoices to the tune of an amount in excess of Rs,627 million; that a large number of ghost and imaginary companies had been got registered by the petitioners and their co-accused; that in the accounts of the said fake companies banking transactions to the tune of rupees three hundred million had taken place only in the account of Bismillah International whereas in the account of Wasif Enterprises transactions worth rupees eighty-five million had been carried out; Muhammad Jamshed son of Muhammad Yousaf who was supposedly proprietor of Bismillah International was arrested who turned out to be a small time employee in the office of a clearing agent at Lahore drawing a meagre salary of less than Rs,10,000 per month. In his detailed statement recorded on 28-9-2006 Muhammad Jamshed has spotlighted the role of the present petitioners and has also narrated the manner in which his name as also the names of so many others like him have been used.
' The learned counsel for the department further argued that as many as 12 spurious Companies had been registered only in Gujranwala Collectorate of Sale Tax out of which Hijab Enterprises is owned by Adnan Saqi (petitioner in Criminal Miscellaneous No,945-B of 2007) whereas Adnan Export is owned by Muhammad Ishaq Saqi (petitioner in Criminal Miscellaneous No,10404/B of 2006).
9. I have heard the learned counsel for the parties and have carefully perused the record.
10. There is no denying the fact that the size of the fraud so far detected is in excess of Rs,9 crore.
This shows that the Government exchequer has been revaged with merciless vengeance by adopting various contraptions and techniques by the petitioners and their co-accused.
Muhammad Ishaq Saqi and his son Adnan Saqi petitioners, in collusion with each other, conceived a plan by means of which they have prima facie resorted to a large scale plunder of the national exchequer by fraudulent manipulation of refund claims. It appears from the record that their modus operandi entailed a three pronged strategy:-- ' Firstly; false companies were created which later on turned out to be existent on paper only, as the said companies never carried out any actual business transaction on ground.
' Secondly; unwary acquaintances of the principal accused had been cleverly trapped by obtaining their identity cards and Cheque books, etc. ' Thirdly; bogus refund claims were prepared, submitted and got approved on the strength of fake documents and the accused persons kept on enlarging the network by adding to the numerical strength of spurious companies.
It can be gathered from the material available on the record that the petitioners cleverly ensured that their signatures did not appear on the documents like cheque books, etc. However, statements of Wasif, Tahir Irshad Khan, Faisal Imtiaz and Haroon depict the manner in which the accused had been operating. It is also discernible from the record that the petitioners did not confine their activities only to those companies mentioned in F.I.Rs, Nos.2 of 2006 and 3 of 2006 but also created Messrs Hijab Textile and Messrs Adnan Textile in Lahore and withdrew Rs,35.43 million and Rs,12.65 million as refund claims respectively from the Sales Tax Department. Muhammad Ishaq Saqi and Adnan Saqi are registered owners of Messrs Hijab Textile and Adnan Textile respectively. Two more exporting firms namely Messrs A. Khan Export Daska and Messrs Haroon Corporation Daska were also invented for the same purpose.
11. It would be instructive to refer to the case of Saadat Ali Khan v. The State (Criminal .Miscellaneous 5806/B of 2001) decided by this Court on 7-11-2001. The allegation against the petitioner in the said case was that certain textile mills which were allegedly charging sales tax were not depositing the said tax into the Government treasury and were issuing fake invoices on the basis of which large amounts of money were being claimed from the Government as input tax without deposit of any output tax in the Government exchequer; that the public exchequer had been fraudulently deprived of crores of rupees in the said manner; that at least twenty bogus companies had been unearthed which were being used for the above kind of fraud by the same gang. The petitioners in the aforesaid case sought bail on the ground that they had nothing to do with the said fake companies; that the petitioner was an Advocate of the High Court and his only fault was that he used to professionally represent the said companies before the Sales tax authorities and that he had been falsely involved only because he had refused to oblige the departmental authorities. It was also argued that offences alleged against them did not fall within the prohibitory clause of section 497(1), Cr.P.C. The contentions of the Sales Tax Department were incorporated in paragraph No,4 (wrongly mentioned as paragraph 3) by his Lordship Mr. Justice Khalil-ur-Rehman Ramday, currently a sitting Judge of the Honourable apex Court, whereas his Lordship's findings exist in paragraphs Nos.4 and 5 of the said order. Paragraphs Nos.4, 5 and 6 are being reproduced:-- "(4) It was argued on behalf of the Sales Tax Department that the petitioner was not an innocent Advocate of the above mentioned three fake companies created only to depriv.e the national exchequer of crores of rupees; that the persons in whose names these companies had been registered were no other than the sons and the employees of the petitioner and in some cases some unconnected employees of an insurance company whose I.D. Cards had reached the hands of the petitioner because he was the legal advisor of the said Insurance Company; that the sons of the petitioner who were also amongst the persons in whose names these fake companies had been registered had absconded and had been declared as proclaimed offenders; that the petitioner was thus no stranger to the companies in question whom he used to represent on the strength of powers of attorneys which bore forged signatures of the allegedly registered persons and that the petitioner was the one had master minded this entire crime, to loot public money.
(5) It could not be denied before me that one of the above mentioned companies was registered in the name of the son of the petitioner while the other stood registered in the name of an employee of the petitioner's office and the third company was registered in the name of an employee of an Insurance Company as the I.D. Card of this person had come into the hands of the petitioner because he was the legal advisor of the said insurance company and required the I.D.
Cards. Of workers in connection with some labour disputes. It could thus, not be said that while representing the said companies on the strength of the forged power of attorneys the petitioner did not know about the antecedents and the background of the persons in whose names these companies stood registered. He is, therefore, not an innocent person not seized of any knowledge about the criminal purpose for which these fake companies had been registered and the purposes for which the same existed.
(6) The fact that the offence did not fall within the prohibitory clause of section 497(1) of the Cr.P.C.
Did not mean that a person accused of such an offence became entitled to the grant of bail as of right. Discretion still remained with the competent Courts to decide whether such a person was or was not entitled to the grant of the said discretionary relief. Needless to mention here that persons who were allegedly involved in robbing the national exchequer, which was the life line of a country could not be held to be entitled to any relief in equity. Such-like persons could be allowed bail only if they could satisfy the conditions prescribed by section 497(2) of the Cr.P.C. Which is not the case in the present situation. It may also be mentioned here that being an Advocate of this Court was hardly a ground to release an accused person on bail who was otherwise not entitled to be so released."
12. It is now well-settled that the mere fact that the offence(s) does not attract the prohibitory clause of section 497(1), Cr.P.C. Is not sufficient by itself to release an accused person on bail. The cruel manner in which the State exchequer has been ravaged cannot lightly be brushed aside. The Honourable Supreme Court has time and again stressed that Courts have to take a dynamic approach while deciding cases. Bail cannot be allowed to swindlers and plunderers of the national exchequer for the simple reason that offences do not attract prohibitory clause of section 497(1), Cr.P.C. The case of Tariq Bashir and 5 others v. The State PLD 1995 SC 34 also does not advance the case of the petitioners for grant of bail inasmuch as the case of the petitioners falls in one of the exceptions enumerated in the said case viz. Danger of offence being repeated if the accused is released on bail. Even otherwise co-accused of the petitioners namely Asif Yousaf Ghurki, Assistant Collector of Sales Tax and Abdul Rasheed Superintendent Sales Tax are still at large. I find no merit in these petitions, which are accordingly dismissed.