FBR raids oil warehouse to recover untaxed sugar stocks

ISLAMABAD: The FBR’s Intelligence and Investigation, Hyderabad, along with the district administration and Intelligence Bureau confiscated huge sugar stocks comprising 78,200 bags, and began investigations into alleged tax frauds against four sugar mills and the accused.

This entire episode proves hoarding to be one of the causes of the shortage of this vital commodity in different parts of the country. The huge stock was kept at an oil and ghee mills to earn lofty profits by creating an artificial shortage. During this period, the prices of sugar witnessed an unprecedented hike, skyrocketing from Rs55 per kg to Rs80/85 per kg under the PTI government.

Informed sources disclosed to The News that the FBR’s Directorate of Intelligence and Investigation of Inland Revenues, Hyderabad, received information that huge sugar stocks were kept at the warehouses of M/S Hi Tech Oil & Ghee Mills (Pvt) Limited Plot Number. X-22- A, SITE, Jamshoro Road, Kotri, district Jamshoro (NTN-4351906-7, STRN 0100435190619). A joint team of Directorate of I&I, IR along with district administration Jamshoro, Intelligence Bureau and other law enforcement agencies visited the premises of M/s Hi Tech Oil & Ghee Mills on 20-2-2020 and recovered approximately 78,200 bags of sugar. Each bag carried 50 kgs sugar stocked in three godowns of the mill.

Those present at the premises introduced themselves as Mohammad Arif (CNIC 41204-0951042-3), Manager Admin and Mohammad Shakir (CNIC 36303-1012845-9), Store/ Gowdown Keeper. During questioning, both in their written statements informed that the entire sugar stock allegedly belongs to Haseeb Ur Rehman Shaikh (CNIC 45203-8313760-9) who had purchased the commodity through M/s Danish Traders from different sugar mills. The FBR teams sought sales tax invoices and other valid documentary evidence of physical transfer of goods and payment for the sugar stocks to ascertain, if the entire stock was genuinely purchased along with payment of sales tax and other duties and taxes. But they failed to produce any valid documentary evidence except some gate passes.

They, however, produced a register showing the daily inward movement of sugar bags maintained by M/s Mark IV (Pvt) Ltd claiming the stocks of sugar were pledged to the Dubai Islamic Bank, Hyderabad. The Directorate approached the bank which provided the pledged and CF (credit facility) documents in the name of Haseeb-ur-Rehman Shaikh. According to these documents, 54,900 bags of sugar valuing approximately Rs197,640,000 were pledged up to 20-02-2020. However, the 78,200 bags are not commensurate with quantity pledged to the above mentioned and falls short of over 28,000 bags.

It was shown that four sugar mills provided 78,200 bags of sugar. They included M/s Tando Allahyar Sugar Mills that provided 7,200 sugar bags, M/s Bawani Sugar Mills 14,000 bags, M/s Ansari Sugar Mills 4,800 bags and M/s Digri Sugar Milla 52,200 sugar bags. In the absence of cogent documentary evidence, the FBR suspects the entire sugar stock was fraudulently taken out and shifted from sugar mills without payment of sales tax, other applicable duties/taxes and without incorporating the same in the sales records. The entire sugar stock has now been sealed under the orders of deputy commissioner, Jamshoro.

The FBR’s Directorate of Intelligence and Investigation of Inland Revenues has recommended conducting early investigations under the Sales Tax Act 1990 and Income Tax Ordinance 2001 so that the quantum of evaded duty/taxes may be ascertained in accordance with legal provisions. Since M/s Danish as well as sugar mills involved in suspected tax fraud falls within the jurisdiction Large Taxpayer Unit (LTU)-II Karachi, therefore, the case was forwarded on point of jurisdiction for taking necessary action under relevant laws, rules and regulations, it said.