The Public Accounts Committee (PAC) was furious on distortion of facts by secretary revenue who moved a summary to the Prime Minister for exoneration of a collector customs, allegedly involved in grant of inadmissible refund of excise duty worth Rs 140 million to a telecom company.
A telecom company, M/s Dancom (Pvt) Limited, in the jurisdiction of collectorate of sales tax, Rawalpindi was allowed refund of central excise duty/sales tax in telecom services for the period of January 2001/2005 although the incidence of the said levy had already been passed on to consumers.
This was instrumental in granting inadmissible refund of Rs 140.002 million in May and July 2005 by the company. The lapse was pointed out to the department in June 2006 which was communicated to the FBR in August 2006. The issue surfaced during last meeting of the PAC and the committee was shocked to learn that tax officials involved in issuance of illegal sales tax refund to the tune of millions of rupees to the said company were given petty punishments like censure after conducting inquiry and these officials were again placed on key positions including collector of customs.
PAC Chairman Chaudhry Nisar Ahmad had expressed serious concern over this malpractice and issued directives to the FBR to immediately remove all officials, who were involved in illegal issuance of refund to the company, denting the exchequer.
Following the directive of the PAC, the FBR had made Nadir Khan Hoti Collector Model Customs Collectorate Rawalpindi and Shiraz Ahmed, Deputy Director, Directorate General of Training and Research Karachi as Officer on Special Duty (OSD), who were involved in issuance of inadmissible sales tax refunds to the company.
But later on, Hoti, collector of customs was reinstated on a summary moved by the FBR to the Prime Minister. The PAC during the meeting convened on Friday took serious note of the incident. Nisar said that secretary revenue division without taking the PAC into confidence, submitted a summary, based on distorted facts to the Prime Minister for the exoneration of the collector Nadir Khan Hoti. Subsequently, the PM exonerated the collector.
The PAC Chairman was of the view that the Prime Minister had no knowledge of the facts and the summary contained false information. He issued directions to summon the FBR Chairman, collector of customs and another deputy collector Shiraz Ahmed in the next meeting to hear their viewpoint. The audit briefs pointed out that the PAC sub-committee headed by Zahid Hamid, directed the department on 15-10-2009 to submit a comprehensive report including updated position of recovery.
The FBR had sent the said report to sub-committee on 4-12-2009. According to the report, the then collector had been exonerated by the competent authority (Prime Minister) on the basis of summary/recommendations of the secretary revenue division on 21-7-2009, wherein it was stated that the FBR on the advice of its legal wing concluded that CPLA may not be appropriate to approach the Supreme Court and rather implement the order of Peshawar High Court to obviate litigation when disputed refund was cleared by independent process and Nadir Khan Hoti did not accord approval.
The audit paras revealed that recommendation of secretary revenue division was against the facts as evidential record available with the audit transpired that the collector had accorded approval of refund. Moreover, Peshawar High Court in its short order directed that:
"This application is allowed and the main petition along with the CM No 212/2008 stands disposed of in terms that the respondents are directed to pass appropriate order on the inquiry report conducted against the applicants/petitioners and the applicant would be at liberty to file a fresh petition, if need arises."
The audit paras further said that PHC had directed the respondents to pass appropriate order on the inquiry report conducted against the applicant, whereas, no inquiry was conducted. It seems that this fact was misreported before the apex court and to the Prime Minister as well.
Inquiry reports sent by the FBR to the PAC sub-committee and action against other officials involved in this tax fraud case shows that most of them were penalised with minor penalties. However, these actions are yet to be examined by the sub-committee of the PAC, the audit briefs added.
Comments
Comments are closed.