Islamabad: The Islamabad High Court (IHC) has granted bail to Shahid Hussain Khwaja, a bank manager at a Karachi branch, in connection with a Rs. 3.2 billion sales tax fraud case. The bail was granted against a nominal surety bond of Rs. 100.
Justice Babar Sattar, in a detailed 10-page judgment, ruled that the Federal Board of Revenue (FBR) had exceeded its legal authority and violated procedural requirements in initiating criminal proceedings against Khwaja. The court directed the Chairman of the FBR to review the judgment and warned tax officials against future legal violations.
Khwaja was accused of assisting a private company in opening accounts to facilitate fraudulent transactions. However, the court found no substantial evidence linking him to the alleged fraud. Justice Sattar emphasized that the FBR failed to calculate the taxpayer’s liabilities as per legal guidelines and acted contrary to a Lahore High Court decision that previously restricted such proceedings.
The judgment criticized the FBR’s misuse of power and noted that the lower court had failed to safeguard Khwaja’s constitutional rights when granting remand and rejecting bail. It further condemned the lower court’s actions, urging trial courts to critically evaluate the legality of such cases.
The IHC’s ruling is seen as a significant check on the overreach of tax authorities and a reminder of the importance of adhering to constitutional protections in legal proceedings.
