' ALI SAIN DINO METLO, J.---After having failed to get pre-arrest bail from this Court and post-arrest bail from the trial Court i,e, the Court of Special Judge (Customs and Taxation) Karachi, applicant Uzair Zakaria, proprietor of Messrs. M.S. Industries, has again approached this Court for post arrest bail.
2. Briefly, the facts are that on 31-12-2005 Dr. Saifuddin, Deputy Director, Intelligence and Investigation (Customs, Federal Excise and Sales Tax) Karachi, registered a case (First Information Report) bearing No,290-DCl/FEST/HR/2005, against the applicant, as he had reportedly obtained inadmissible sales tax refund amounting to Rs,51,621,329 and customs rebate amounting. To Rs,4,078,782 from the Collectorate of Sales Tax (Enforcement) Karachi and Collectorate of Customs (Export) A Karachi during the period from April to June 2005. According to him, the goods exported actually belonged to some other companies and the applicant had simply managed fake, fabricated and bogus documents to claim the refund and rebate.
3. The pre-arrest bail was declined on the ground that the matter genuinely required investigation and no mala fides were established against the investigating agency. Nevertheless, it was observed that the trial Court would be free to consider post-arrest bail without being influenced by the order of rejection of pre-arrest bail. The trial Court has refused post-arrest bail on the ground that the amount involved was big and prima facie there was sufficient material to believe that the applicant had committed the offence.
4. On enquiry as to whether any action was 'taken against any officers sanctioning the refund or the rebate, the Standing Counsel as well as the Investigating Officer replied in negative and further informed that even action for recovery of the amount was not initiated as, according to them, the bills of lading, on the basis of which action was taken, were yet to be verified. Here it may be mentioned that copies B of some bills of lading purported to have been 'issued by Messrs. Novel Maritime (shipping company) showing different consignors, consignees, quantities and destinations, were allegedly provided to the investigating agency by Mr. Amin M. Memon, owner of another 'shipping company Messrs. Seagate Logistics, disclosing that the goods were actually laded under the said bills and the bills issued by him in the name of applicant's concern Messrs.
S.M. Industries as consignor were not genuine bills . The entire action was taken on the basis of those copies but strangely enough the said Mr. Amin M. Memon has neither been made as an accused nor cited as a witness. To another query they replied that the so called real owners of the goods could not be found. According to them, the goods were actually exported by the applicant and the bank credit advices (BCAs) showed that their price was also received in foreign exchange.
They further informed that genuineness of the copies of the bills purportedly issued by Messrs.
Noval Maritime could also not be verified. According to the interim challan (report of investigation) filed in the trial Court on 24-4-2006, sufficient time was required to finalize the investigation.
5. On further enquiry, both i,e, the Standing Counsel and the Investigating Officer statd that except for the bills of lading none of the documents filed by the applicant in support of the refund and rebate claims was doubted. The input tax invoices, the zero rated invoices, the bills of export and the bank credit advices were found to be genuine. Basically, refund of sales tax is claimed on the basis of input tax invoices. Under section 7 of the Sales Tax Act, 1990, a registered person is entitled to deduct input tax from the output tax but as output tax is not payable on the goods exported there can be adjustment of input tax against output tax and, therefore, the entire amount of input tax paid in respect of the exported goods is required to be refunded on the exporter.
6. The learned Standing Counsel as well as the Investigating Officer frankly conceded that for the time being the entire prosecution case was of change of destination, as according to them, the goods were unloaded at Dubai instead of Germany. In this regard it may be observed that apparently the change of destination has no effect upon refund of sales tax inasmuch as the amount of refund is determined on the basis of amount mentioned in the input tax invoices and is admissible irrespective of whether the goods were exported to Germany or Dubai.
7. As regards the contention of the learned Standing Counsel that the goods were shown to have been exported to high tariff country i,e, Germany but unloaded in low tariff country i,e, Dubai, it may be mentioned that the same will have no bearing upon the refund of sales tax and only same bearing upon the claim of customs rebate depending upon the quantum of over-valuation. In the present case except for a general assumption made on the concept of high tariff zone and low tariff zone. Even the percentage of over-valuation has not been disclosed.
8. Learned counsel for the applicant cited an unreported order passed by this Court on 1-3-1990 in C.P. Nos.225/226/227 of 1987, holding that claim of rebate could not be rejected on the ground of change of destination. The order was maintained by the Hon'ble Supreme Court vide its order dated 31-5-1990 passed in Civil Petitions Nos. 233-K/234-K/235-K of 1990.
9. Finding the case fit for the grant of bail, in the light of its above mentioned facts and circumstances, the applicant was admitted to bail in the sum of rupees two million with one surety and personal recognizance in the like amount to the satisfaction of the trial Court by a short order passed on 31-5-2006 and these are the reasons for the same. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.