The Islamabad High Court (IHC) on Wednesday granted bail to Shahid Hussain Khawaja, a suspect in a Rs 3.2 billion sales tax fraud case, citing insufficient evidence and reprimanding the Federal Board of Revenue (FBR). ) for exceeding his authority.
Justice Babar Sattar approved Khawaja’s release on Rs 100 bail and called the tax department’s actions an unconstitutional overreach.
The court ruled that Khawaja, manager of a bank branch in Karachi, was arrested without evidence of direct involvement in the alleged fraud.
In a scathing verdict, the court accused the FBR of violating established legal principles, including a Lahore High Court ruling barring similar actions in tax-related cases.
Justice Sattar stated that the FBR had infringed Khawaja’s fundamental rights and criticized the lower courts for failing to safeguard these protections.
“The magistrate’s decision to remand the suspect and the lower court’s denial of bail demonstrate a disregard for constitutional guarantees and the Sales Tax Act,” Justice Sattar noted in the detailed ruling. .
Khawaja was charged with facilitating the opening of a business account allegedly used for tax fraud.
However, the court highlighted that the FBR did not present any material evidence linking him to fraudulent activities.
The judgment also noted that the FBR had not determined the actual tax liability under the law before initiating the criminal proceedings.
The court found this approach not only illegal but also contrary to the Supreme Court’s affirmation of the Lahore High Court’s decision in a similar case involving Taj International.
The court directed the FBR to distribute copies of the verdict to its officials, emphasizing compliance with legal norms in future cases.
Justice Sattar warned that non-compliance could lead to punitive action against tax officials.
