The Directorate General of Intelligence and Investigation has detected a new kind of tax fraud at Karachi, involving sales tax officials, who tampered record to hide sales tax evasion of over Rs 55 million.
A senior official of the directorate told Business Recorder on Friday that the Field Vigilance Unit, Karachi, had unearthed an engineered hush-up of sales tax demand of over Rs 55 million by some tax officials.
The bogus departmental record showed that action had been taken against the evader, but the case was never taken up by any of the FBR's legal forum, ie collectorate of adjudication, sales tax and excise, Karachi, he added. According to the official, the Director General, Intelligence has detected the case after a lapse of five years.
He said the technique used by the sales tax officials was to show legal action against the tax evader on sketchy documents, and added the officials prepared fake papers to prove that the case was duly referred to the adjudication department for completion of legal action against the evader. However, the case was never referred to the adjudication authorities to facilitate the tax evaders, he said.
According to the official, it is first of its kind of fraud, detected by the directorate, where evasion cases were not forwarded to the relevant department for adjudication.
Secondly, different departments, including sales tax and adjudication offices of Karachi to protect the evader changed the record of the tax evader. Details revealed that a contravention report was issued by the Sales Tax, West Office, Karachi, detecting sales tax evasion of the involved amount in 2003.
The report was actually withheld and it was not forwarded to the concerned adjudication collectorate, but the record of Karachi West and concerned adjudication collectorate was tampered to show as if the report was properly sent for adjudication.
Official said that the dispatch register of Karachi West did not show any entry, which might indicate the dispatch of contravention report to the adjudication collectorate. A letter was prepared by the regional office for adjudication, but it was never dispatched to the relevant department, he said.
The name of the tax evader was also changed at different records and tempered register of the relevant collectorate was prepared to protect the evader. The complete track of adjudication record confirmed that neither the case was ever taken up by the department, nor it appeared among the decided cases nor it has been transferred to any authority and nor it is pending with any collectorate.
The Director General, Intelligence, has requested the Director General, Regional Tax Office (RTO), Karachi, to conduct a fact-finding inquiry in the case to fix responsibility on the involved officials. Official added that the recovery efforts be made against the sales tax evader under the relevant rules.