The Islamabad High Court (IHC) has granted bail to Shahid Hussain Khawaja, a co-accused in a Rs3.2 billion sales tax fraud case, against a nominal surety bond of Rs100. Justice Babar Sattar ruled that the Federal Board of Revenue (FBR) exceeded its authority in pursuing a criminal investigation against the accused.
The court directed that a copy of its order be sent to FBR Chairman Rashid Mahmood Langrial. The ruling highlighted several procedural flaws, including the absence of material evidence linking the petitioner to the fraud.
The judgment noted that the arrest was made in violation of a Lahore High Court (LHC) verdict. The court pointed out that the tax department had failed to determine the tax liability as required by law and initiated criminal proceedings despite being aware of the LHC’s directives.
Justice Sattar emphasized that the FBR chairman must ensure copies of the LHC and IHC judgments are distributed to tax officers. The court warned that any future violations would result in action against the tax department and officers for misuse of power.
The judgment underscored that legal and policing powers granted to public officials must be exercised within the boundaries of the law. The court criticized the tax department for arresting a bank manager alleged to have facilitated the opening of an account without sufficient evidence of involvement in the fraud.
The IHC’s decision serves as a reminder to public institutions to respect legal boundaries and uphold due process in their operations.
