The inquiry committee of pay phones scam has suspended investigation against suspected senior officials of customs and excise group following an order of Peshawar High Court.
Sources told Business Recorder on Saturday that the inquiry has been held in abeyance in the light of a judgement of Peshawar High Court passed on October 3, in favour of Nadir Khan Hoti, suspended Collector, sales tax and federal excise, Peshawar.
The inquiry committee will not carryout further investigation till the final decision of the court. Hoti had demanded re-constitution of the inquiry committee in the pay phones scam, sources said. The inquiry committee had also directed Muhammad Nazim Saleem, Collector, (under suspension) to explain how the judgement of Peshawar High Court pertaining to Hoti would also be applicable to him.
It seems that the investigation against the suspected officials would not reach its logical conclusion. FBR Chairman had expressed serious concerns over delay in finalisation of disciplinary proceedings against senior officials of Customs and Excise Group involved in issuance of illegal refunds of excise duty to the pay phone companies.
Sources said that the board is unable to further proceed in the cases of illegal refunds issued to the pay phone companies due to extraordinary delay in finalisation of inquiry proceedings. Without submission of inquiry reports, the board is not legally empowered to further initiate legal action against the involved officials.
Sources said that the board had rejected the demand of these officials to change the members of inquiry committee, duly approved by the Prime Minister. The reconstitution of committee might change the outcome of the ongoing investigation.
The committee has already finalised investigation against the involved officials and statements of allegations hinted for taking action under the Removal From Service (Special Powers) Ordinance, 2000.
The committee, comprising Collector of Customs, Rawalpindi and Member Technical, Customs, Excise and Sales Tax Appellate Tribunal, Lahore had directed the suspended officials to immediately submit reply to the charges/statements of allegations. The officials should also appear before the committee in the office of Member Appellate Tribunal, Lahore along with documentary evidence, record and witnesses if any, in support of their contention.
The committee had issued notices to Muhammad Nazim Saleem, Collector, (under suspension); Nadir Khan Hoti, Collector (under suspension), Collectorate of Sales Tax and Federal Excise, Peshawar; Asim Majid Khan, Additional Collector (under suspension), LTU, Lahore; Dr Naeem Aijaz Quershi; Additional Collector (under suspension), Collectorate of Sales Tax and Federal Excise; Zeba Hai Azhar, Additional Collector, Large Taxpayer Unit (LTU), Lahore; Muhammad Saeed Watto, Deputy Collector (under suspension) Sales Tax and Federal Excise and Ms Sameera Sheikh, Deputy Collector, Collectorate of Customs, Lahore.
The committee was to hear personally the suspended officials on October 8, 2007. However, hearing date was later postponed till October 18, but now the entire proceedings have been suspended till the final decision of the Peshawar High Court.
According to the inquiry committee, objections of auditors and senior auditors had been rejected by the involved officials for issuance of illegal refunds. Pay phone companies were not entitled to refund for the reasons that they were exempt from payment of excise duty on the services provided by them for the period up to July 1 2005.
The companies were neither liable to be registered as service provider nor they charged any excise duty on the services provided by them. Moreover, they neither filed any sales tax return nor issued any sales tax invoice. Accordingly, they were not entitled to claim refund of any amount paid by PTCL during the period. In any event, if PTCL had not correctly paid the duty, it should have been for PTCL to have applied for such refund.
Secondly, incidence of excise duty collected in sales tax mode had been passed on and suspended officials failed to ensure compliance of relevant provisions of the central Excise Act, 1944, and of the Sales Tax Act 1990 which provide that no refund can be paid if incidence has been passed on and the burden of proof is on the claimant to provide irrefutable evidence to dislodge the legal presumption.
These officials accepted the illegal grounds that incidence was not passed on because the sale price did not change during and after the period in which excess duty was charged. Tax officials failed to realise that the tax paid was being included in the cost and that such costs are recovered from the end-consumer unless a loss is being made.
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