Justice Ijazul Ahsan of the Lahore High Court on Monday directed the Macca Group of Companies to provide documentation requested by the Federal Board of Revenue (FBR) so it can complete an investigation into alleged tax evasion of Rs1 billion.
The judge vacated a stay order against the tax recovery and directed the FBR to conclude its inquiry and then report to the Supreme Court. He said no “adverse order” should be passed against the group until the report was filed.
The tax evasion claims against the Macca Group of Companies – which consist of Haq Bahu Sugar Mills, Macca Sugar Mills and Al-Asif Sugar Mills – were made by a former employee, Liaqat Ali. He told the chief justice of Pakistan that it had concealed its true production and sales using ‘benami’ bank accounts. He also alleged that the group had illegally adjusted input tax on fake invoices issued by its sister concerns.
On May 21, 2012, the Supreme Court directed the FBR to investigate and submit a report. The FBR formed an inquiry committee, which asked the group to provide certain documents. The group moved the LHC, which stayed the investigation.
FBR counsel M Ilyas Khan and M Yahya Johar submitted that the LHC had on October 9, 2012, allowed the board to proceed with the inquiry. The FBR sent the group a second notice, but it did not provide the required documents.
They said that the FBR had established links between the benami bank accounts and the group and uncovered fraud of around Rs3 billion.
Published in The Express Tribune, October 29th, 2013.