ORDER SHEET
IN THE HIGH COURT OF SINDH, KARACHI
C.P.Nos.D-3141 & 3659 of 2015
________________________________________________________
Order with signature of Judge
Present
Mr. Justice Muhammad Ali Mazhar
Mr. Justice Muhammad Iqbal Kalhoro
C.P.No.D-3141 of 2015
Sarfraz Ahmed Vs. Chairman NAB &
Others
C.P.No.D-3659 of 2015
Syed Arif Raza Vs. NAB & Another
Date of hearing: 15.07.2015
Mr. Shoukat Hayat, Advocate for the Petitioner in C.P No. D-3141 of 2015.
M/s. Syed Mehmood Alam Rizvi and Zakir Leghari, Advocates for the Petitioner in C.P No.D-3659 of 2015
Mr. Noor Muhammad Dayo A.D.P.G NAB
Sabih Rafay I.O of the case.
…..
Muhammad Ali Mazhar J. The petitioners have brought these petitions for their post arrest bail in NAB Reference No.18 of 2015. According to prosecution case it revealed during inquiry against Gulraiz Ahmed Raza, Auditor Sales, Karachi, that M/s. H.Y. Enterprises and some other companies fraudulently obtained Sales Tax Refunds by using false invoices of fake companies. The inquiry was converted into an investigation by the Director General, NAB. The investigation report further revealed that huge amount on account of Sales Tax Refund was sanctioned to M/s.H.Y. Enterprises owned by Mohammad Yasin Pollani (accused No.1) in the year 2004-2005 which was credited in its bank account.
2. The roles of both the petitioners have been depicted separately in the reference as under:-
Role of Petitioner/Accused Sarfraz Ahmed.
“8.That the investigation report also reveals that Sarfraz Ahmed (accused No.2), the then Deputy Superintendent (FBR) processed 4X Refund Claims without verifying the genuineness of the documents (cheques, invoices and existence of suppliers). Whereas, according to the Rule No.6 of Sales Tax Refund Rules, 2002 issued vide S.R.O. 575(i) 2002, dated 31st August, 2002, it was his duty to process the Claims only after he is fully satisfied about the genuineness and admissibility of the claims. Moreover, he also did not verify proof of payment made u/s 73 of Sales Tax Act, 1990. On 20.3.2006 he also processed Refund Claim (Claim No.T110305100531) of Rs.92, 42, 149/- for the tax period of March, 2005, without verifying the genuineness of the documents (cheques, invoices and existence of suppliers). The details are as under:-
|
Claim No. |
Claim Period |
Sanctioning Date |
RPO date |
Refund Claim (Rs.) |
|
T110905100100 |
Sept.2005 |
13.02.2006 |
13.02.2006 |
1,24,46,060/- |
|
T000605100023 |
June 2005 |
24.12.2005 |
26.12.2005 |
1,456,514/-8,021,250/- |
|
25.02.2006 |
28.02.2006 |
|||
|
T110405100352 |
April 2005 |
25.02.2006 |
28.02.2006 |
20,88,963/- |
|
T110805100315 |
August 2005 |
02.02.2006 |
01.02.2008 |
48,09,182/- |
|
TOTAL |
28.82 M |
|||
Role of Petitioner/Accused Arif Raza
“9. That the investigation report further reveals that Arif Raza (accused No.3) the then Superintendent (FBR), on 31st May, 2005, recommended Refund Claim of Rs.64,66,432/- (Claim No.T111104100361) for the tax period of November, 2004 without verifying the genuineness of the documents (cheques, invoices and existence of suppliers). Whereas, according to the Rule No.6 of Sales Tax Refund Rules, 2002 issued vide S.R.O. 575 (1) 2002, dated 31st August, 2002. It was his duty to recommend the claim only after he is fully satisfied about the genuineness and admissibility of the claim. Besides, he also did not verify proof of payment made u/s 73 of Sales Tax Act, 1990”.
3. Mr.Shoukat Hayat, learned counsel for the petitioner (Sarfraz Ahmed) argued that the petitioner was discharging his duties for last more than 30 years with honesty. Initially the Deputy Director NAB initiated an inquiry on the basis of complaint dated 2.9.2006 and the said inquiry was closed in the year 2012, therefore, a fresh inquiry on the closed chapter is without jurisdiction. The petitioner on call up notices repeatedly appeared and explained the procedure for the refund of sales tax claims under the relevant rules. The petitioner was not the authority to sanction the refund claims but under the Sales Tax Refund Rules 2002, the sanctioning authority is the Officer-in-charge.
4. Syed Mehmood Alam Rizvi, learned counsel for the petitioner (Syed Arif Raza) argued that the petitioner is holding a public office for last more than 34 years and he never circumvent any relevant rules or regulations relating to his normal duties or relating to the refund of sales tax claims. He further argued that after a long period of 09 years of pending inquiry, Reference has been filed in the year 2015. He also argued that the inquiry was closed in the year 2012, therefore, the repeated inquiries on the same issue are without lawful authority and jurisdiction. No specific role of the petitioner was mentioned in the complaint dated 2.9.2006. When the petitioner appeared in response to the call up notice even then no allegation was leveled by the inquiry officer against him for misusing his authority with regard to the clearance and sanction of the bogus and or fake refund claims of sales tax.
5. Mr. Noor Muhammad Dayo, learned A.D.P.G NAB argued that these petitions were filed before filing the reference in the Accountability Court and now the reference has been filed in which the role of both the petitioners have been shown separately. He further argued that both the petitioners have played their active roles in the commission of offence and there are reasonable grounds to believe that they are involved in the corruption and corrupt practices. He further contended that the accused No.2 was the then Deputy Superintendent (FBR), who processed 04 refund claims without verifying the genuineness of documents, while it was his duty to process the claims only after due satisfaction. So far as the accused Arif Raza is concerned, he was Deputy Director, Directorate of Inspection and Internal Audit (Customs, Federal Excise and Sales Tax), Custom House, Karachi who recommended 01 refund claim for the tax period of November, 2004 without verifying the genuineness of the documents. He further argued that all the refund claims processed by both the petitioners are pertaining to the year 2004-2005. The petitioners with the connivance and collusion of co-accused persons committed the offence of corruption hence they are not entitled to be enlarged on bail.
6. Heard the arguments. In paragraph 12 of the reference it is alleged that all the accused persons have committed offence of corruption and corrupt practices as defined under Section 9 (a) of NAO, 1999 punishable under Section 10 of the said Ordinance. A glimpse to Section 9 of the NAO, 1999 allude to gist of acts of corruption and corrupt practices which makes a holder of a public office or any other person liable to be punished. The acts include acceptance of any gratification directly or indirectly as the motive or reward as specified under Section 161 PPC for doing or forbearing to do any official act in exercise of its official function favour or dis-favour to any person or rendering any service or disservice to any person or if he accepts or obtains or offers any valuable thing without consideration from any person or if dishonestly or fraudulently misappropriate or otherwise converts of his own use or if he by corrupt, dishonest or illegal means obtains for himself or for his spouse or dependents or property or pecuniary advantage or if he or any of his dependents or benamidars owns and possesses right or title in any asset. Whereas the Sub-clause (iv) of clause (a) of Section 9 pertains to misusing of authority by a holder of a public office or any other person so as to gain any benefit or favour for himself or any other person etc. This Section is very exhaustive by itself but we have austerely quoted the nucleus of the acts which may be considered involvement of holder of a public office or any other person in corruption and corrupt practices. The purpose of highlighting the salient features is to accentuate that during course of inquiry and investigation, it is incumbent upon the prosecution to collect ample incriminating material for exposing the involvement of accused in corruption and corrupt practices which is inescapable and unpreventable. It is often seen that in NAB reference, the role of each accused is separately delineated and call out to show his involvement bearing in mind the incriminating material collected during investigation.
7. It is clear from the allegation made in the reference that the alleged act of corruption or corrupt practices pertaining to the year 2004-2005. It further reveals that though the inquiry was underway but it was converted into investigation after considerable period by the Director General, NAB vide letter dated 5.1.2012 and after three years of investigation, the reference has been filed in the month of June, 2015. The allegation against Sarfraz Ahmed, (Accused No.2) the then Deputy Superintendent, FBR that he processed 04 refund claims without verifying the genuineness of the documents, whereas the allegation against Arif Raza (Accused No.3) the then Superintendent FBR that he recommended 01 refund claim on 31.5.2005 for the tax period of November, 2004 without verifying the genuineness of the documents. In nutshell, both the petitioners/accused failed to follow Rule 6 of the Sales Tax Refund Rules. Since the prosecution has repeatedly referred to Rule 6 of Sales Tax Refund Rules 2002 and its violation, therefore, it would be advantageous and expedient for us to visit not only Rule 6 but other relevant rules of Sales Tax Refund Rules 2002 also. Rule 4 of the Sales Tax Refund Rules, 2002 pertains to the filing of refund claims which provides that monthly sales tax return filed by a claimant would be treated as refund claim once all the supportive documents in the manner specified in these rules or otherwise prescribed by the Board have been received. It is further provided in sub-rule (2) that the claimant shall forward to the officer-in-charge a legible photocopy of the bank- receipted return referred to in sub-rule (1) duly accompanied by the requisite supportive documents in the manner prescribed by the Board for processing and setting the refund claim. In clause (d) of sub-rule (1) of rule (2) (definition clause), officer-in-charge means Deputy Collector of sales tax or any other officer of sales tax who holds full or partial charge of the Refund Division. Rule 3 has also much significance which indeed makes it obvious that there shall be established a Refund Division in each Collectorate of Sales Tax to receive, process and settle the refund claims filed under the Act while sub-rule (2) clarified that the Deputy Collector or any other officer as may be nominated by the Collector of Sales Tax shall be the head of refund division provided that Collector of Sales Tax may distribute work of the refund division among more than one Deputy Collectors or senior Assistant Collector in such manner as may deem fit.
8. In order to make the refund process or its mechanism foolproof, a detailed procedure for the scrutiny of refund claims is provided under Rule 5 that on receipt of a refund claims the processing officer shall assign claim number and carry out necessary examination and scrutiny in order to ascertain bona fide of the refund claim. He shall check the accuracy of declaration and calculation on the sales tax return involving the amount of refund. After having satisfied about the genuineness and admissibility of the refund claim being a processing officer he is required to submit a written comprehensive refund examination report within seven days of receipt of supportive documents to the concerned senior auditor or superintendent who shall give his conclusive recommendation and pass it on to the officer-in-charge within three days of receipt of the case from the processing officer. It is the duty of Officer-in-charge to satisfy himself about the genuineness and admissibility of the claims on the basis of report, recommendations and supportive documents. Under the procedure where the officer-in-charge is of opinion that any further inquiry or audit is required to establish the genuineness or admissibility of the claim he may make or cause to be made such inquiry or audit after approval from the Additional Collector under intimation to the refund claimant. Now we would like to embark upon Rule 6 which is relevant to the sanction and payment of refund claims. This Rule elucidates and expounds unequivocally that if on the basis of supportive documents, refund examination report, recommendations, inquiry or audit report as the case may be, the officer-in-charge is fully satisfied about the genuineness and admissibility of the claims, he shall subject to the provisions of sub-clause (3) of Section 10 of the Act, sanction the claim and send the original copy of the sanction order to the Treasury Officer for issuance of cheque to the claimant. In the same rule it is also the responsibility of the Treasury Officer that before issuing cross cheque to the claimant he shall personally ensure that the cheque of only such amount is issued to the claimant as is specified and sanctioned in the sanction order.
9. The purpose of exploring and examining the aforesaid rules is to form a tentative view regarding the culpability and accountability of the petitioners. No doubt it is well settled proposition of law that deeper appreciation of evidence is not permissible at bail stage but keeping in view the role assigned to the present petitioners it is essential to see whether they were the sole authority or at the helm of affairs to pass the refund claims by their own or for dealing the matter of refund of claims, a chain of command/hierarchy is entrenched and couched in the Rules itself making obvious the role and responsibility of different officers/officials starting from the stage of submission of refund claims till issuance of refund claims cheques. Whether the petitioners are responsible for the processing of refund claims illegally or unlawfully or they were the sole and absolute authority to sanction the claims, this requires further inquiry. We have also seen the final investigation report but why we are referring to the investigation report is again for the reason that under the rules a chain of command to deal the claims is mentioned but in Paragraph 30 of final investigation report at least names of three Additional Collectors and two Deputy Collectors are mentioned with the compliment that case is not established against them and reference has been filed against the owner of H.Y Enterprises and two Superintendent (FBR) and one Deputy Superintendent (FBR) only so for this reason also, the case against the present petitioner needs further inquiry keeping in mind the chain of command and their responsibilities required to be performed under the rules. However at this stage we are sanguine that guilt of the petitioners cannot be decided whether they are involved in the offence of corruption or corrupt practices. To a specific question asked by us to the ADPG, NAB and the I.O. whether any incriminating material has been collected that the petitioners obtained any unlawful gain or gratification or any abnormal bank transaction or activity was noted in their bank accounts or any asset was acquired by the petitioners in their own name or ostensibly, the answer of the I.O. was in negative that no such incriminating material was collected or found available.
10. In the case of Ali Anwar Ruk, Abdul Jabbar, Syed Mansoor Ali and Sardar Amin Farooqui reported in 2014
SBLR 766, PLJ 2014 Karachi 251=2014 CrLJ 777, PLJ 2014 Karachi 254=2014 UC 784 and PLJ 2014 Karachi 268, authored by one of us (Muhammad Ali Mazhar-J), it was expounded and explicated that further inquiry is a question which must have some nexus with the result of the case for which a tentative assessment of the material on record is to be considered for reaching just conclusion. The case of further inquiry pre-supposes the tentative assessment which may create doubt with respect to the involvement of accused in the crime. It is well settled that deeper appreciation of evidence is not permissible at bail stage simultaneously it is also well settled that object of trial is to make an accused to face the trial and not to punish an under trial prisoner. The basic idea is to enable the accused to answer criminal prosecution against him rather than to rot him behind the bar. Accused is entitled to expeditious access to justice, which includes a right to fair an expeditious trial without any unreasonable and inordinate delay. The intention of law is that the criminal case must be disposed of without unnecessary delay. The Supreme Court in the case of Muhammad Nadeem Anwar v. NAB reported in PLD 2008 SC 645 held that accused is entitled to expeditious and inexpensive access to justice, which included a right to fair and speedy trial in transparent manner without any unreasonable delay. Such intention had been re-assured in Section 16 of National Accountability Ordinance, 1999, laying down criteria for day to day trial and its conclusion within thirty days. Such object did not appear likely to be achieved anywhere in the near future and would not constitute a bar for grant of bail to accused. Truth or otherwise of charges leveled against accused could only be determined at the conclusion of trial after taking into consideration the evidence adduced by both the parties. The apex court in the case of Muhammad Jahangir Badar vs. NAB, reported in PLD 2003 SC 525, held that the State machinery has a right to arrest the culprits and put them to trial for the purpose of establishing guilt against them but it has not been bestowed with an authority to play with the liberty and life of an accused under detention because no one can be allowed to remain in custody for an indefinite period without trial as it is fundamental right of an accused that his case should be concluded as early as could be possible particularly in those cases where law has prescribed a period for the completion of the trial.
11. The petitioners were granted bail in NAB Reference No.18/2015 vide our short order dated 15.7.2015 and the petitions were disposed of. The above are the reasons of our short order. Our findings are tentative in nature and shall not prejudice the case of either party in the trial court.
Karachi: Judge
Dated.4.8.2015 Judge