1. ' By this order, I would like to dispose of Special Criminal Bail Applications Nos.11 of 2003 and 12 of 2003 in a case relating to a Customs and repeated tax frauds spread over the period of about three years.
2. ' The prosecution case is that the applicants Abdul Majeed and Abdul Rashid are Director and Chief Executive respectively of Messrs Universal Gum (Pvt.) Limited which is registered with Collectorate of Sales Tax and Central Excise (West) Karachi since 26-8-1997 as manufacturers of Guar Split, Gum and exporter of Polyester Fabrics.
3. ' In the monthly sales tax returns from January, 2000 to September, 2002, Messrs Universal Gum (Pvt.) Limited (hereinafter referred to as Company) declared no business activity.
4. ' In October, 2002, a routine audit of the Company revealed that the company having declared no business in monthly returns had consumed large quantity of Electricity and Gas. As the consumption of the Gas and Electricity was in conflict with declarations made by the Company, the Sales Tax Authorities visited the factory premises at Dhabiji and found it operational and processing Guar for production of Guar Split, and Guar Gum etc. They also detected one Invoice No,936, dated 16-8-2000 confirming the sale of taxable goods i,e, Gum by the Company to Messrs Sanaullah Textile Mills, Karachi and collection of sales tax from them.
5. ' After that the Sales Tax Authorities issued notice to the Company under section 25, Sales Tax Act requiring them to produce sale and purchase register alongwith invoice book, all bank accounts record and month-wise production reports etc. The Company through written letter admitted that no sale/purchase register was maintained by them and that they were maintaining only one bank account with PICIC Commercial Bank, Karachi.
6. ' However, the detailed probe/inquiry resulted in so many discoveries about the large scale sale/purchase activity and exports by the registered person i,e, the Company. The Sales Tax Authorities were able to lay hands on invoices showing the sale of the product of the Company to different companies including Messrs Century Paper and Papers Board, Lahore. Messrs A.H.
7. Industries, Karachi, Messrs Jamal Textile Industries, Karachi, Messrs Panama Industries, Karachi, Messrs Packages Limited, Lahore, Chaman Textile, Lahore, Mushtaq & Co., Karachi, Messrs Commercial Dying Industries, Shadara, Lahore and Central Drying and Printing, Karachi.
8. ' The inquiry also revealed that cheques issued by the buyers were credited in the name of the Company. Following were the banks which had received the credit on the cheques issued in favor of the Company.
(1) Allied Bank of Pakistan Foreign Exehange Branch.
(2) Dewan Bank Limited Cloth Market Branch.
(3) MCB Tumba Gali Branch Jodia Bazar, Karachi.
(4) Platinum Bank Jodia Bazar, Karachi.
(5) Prudential Commercial Bank, Jodia Bazar.
(6) Metropolitan Bank Main Branch, Karachi.
9. ' Although the accused/company concealed many documents including invoices, yet the Sales Tax Officers succeeded in securing some invoices of two serious which also disclosed large scale/purchase activity by the Company from 16-7-1998 to 28-10-2002. It was also revealed that the Company was maintaining the account in the name of one Usman in Metropolitan Bank, Main Branch, Karachi.
10. ' On the basis of the inquiry, the F.I.R. Was registered on 18-4-2003 under section 37-A(3), 37-A(5), 37(C) for continous and repeated tax fraud to the tune of crores and not disclosing and delivering the record.
11. ' The accused were taken in custody and they moved bail application in trial Court but it was dismissed. Hence they have applied for bail before this Court.
12. ' It is argued by Mr. M. Ilyas Khan and Mr. Khalid Javed Khan the learned counsel for applicants that the prosecution has exaggerated the position about the tax evasion by alleging the fraud to the extent of crores of rupees. According to them the documents with the prosecution at the most discloses the evasion of tax not more than Rs, 9 millions. In support of these arguments they referred to the contents of F.I.R. It is argued that the offence allegedly committed by accused is punishable for 5 years and is also compoundable one. It was argued by Mr. M. Ilyas Khan that the entire evidence which the prosecution rely upon is documentary, therefore, there is no apprehension of tampering with evidence. After highlighting the above points the learned counsel argued that the Company never claimed to be manufacturer of Polyester Fabrics and allegations of export of that product and getting refund are false and exaggerated. Learned counsel placed reliance upon the cases of Saeed Ahmed v. The State 1996 SCM R 1132 and Ayaz Ahmed v. The State 2003 PCr.LJ 1340.
13. ' Mr. Mahmood A. Rizvi learned Standing counsel has opposed the bail plea of accused arguing that it is true that the single offence of tax fraud is punishable with 5 years but present is the case of repeated and continuous commission of offence of tax fraud which makes the case exceptional one. Therefore, the applicants do not deserve the concession of bail. He next contended that the applicants cannot claim/grant of bail for the reason that the offence is compoundable. They have caused loss to the public exchequer to the tune of crores. As such the offence is against society. He placed reliance upon a case of Imtiaz Ahmed and another v. The State PLD 1997 SC 545.
14. ' It is admitted position that the Company is registered person with Collectorate of Sales Tax and Central Excise (West) Karachi and the applicants are its Director and Chief Executive. Filing of monthly returns for the period spread over about three years declaring no sale and purchase by the Company is also not denied. It s also admitted by the Company that they did not produce the relevant registers and other record including the invoices and bank accounts except few invoices which were also not in sequence. The documents including the large number of invoices were withheld which act by itself shows that they want to conceal the actual evasion instead of disclosing the same.
15. ' In view of this attitude the rough estimate by the Investigating Officer about the loss given to the public exchequer which report is based on documentary evidence cannot be ignored. Even otherwise, the huge documentary evidence collected by the prosecution furnishes reasonable grounds to believe that the applicants are involved in commission of offence of tax fraud regularly, constantly and repeatedly.
16. ' No doubt the offence is punishable with five years but it is an organised and planned white colar crime affecting the society at large, therefore, in the circumstances, the applicants do not deserve the concession of bail.
17. ' In the case of Afzal Ahmed v. The State 2003 SCM R 573 the Honourable Supreme Court his observed as under:-- ' The mere fact that an offence did not fall within the prohibitory clause of section 497(1) of the Cr.P.C. Did not mean that such an offence had become a bailable offence. The discretion still remained with the competent Court to consider whether a person accused of such an offence did or did not deserve the grant of bail in accordance with the established norms governing the exercise of such a power. Needless to mention here that a person accused of spreading a deadly poison i.e the narcotics, in any society, is not the kind of person who qualifies for the grant of any discretionary relief unless such a person could demonstrate that he was entitled to the grant of bail on account of the reasons mentioned in section 497(2) of the Cr.P.C."
18. ' Apart from the case of Afzal Ahmed v. The State (supra) the Honourable Supreme Court in an unreported case, maintained the order of High Court in Criminal Petition No,64-K of 1997, dated 18- 11-1997 wherein the bail application was dismissed by High Court pertaining to a fraud of sales tax.
19. ' The case-law cited at th bar has no relevance to the facts and circumstances of case in hand.
20. ' In such situation, the accused do not deserve the concession of bail. Bail application is dismissed.