Man accused of Rs3.2bln corruption gets bail on surety bond of Rs100 by IHC

The Islamabad High Court has granted bail to Shahid Hussain Khwaja, a bank manager at a Karachi branch, in a Rs. 3.2 billion sales tax fraud case against a surety bond of Rs100 only.

The court's decision comes after it found that the Federal Board of Revenue (FBR) exceeded its authority and violated legal procedures in initiating criminal action.

In a 10-page detailed judgment, Justice Babar Sattar ruled that the actions taken by the tax department were beyond its legal scope. He directed the Chairman of the FBR to receive a copy of the court's decision.

The court further signaled that tax officials would face action if they violated laws in the future.

Khwaja was arrested for allegedly assisting a private company in opening accounts for facilitating fraudulent activities. However, the court found that the State failed to provide substantial evidence linking the defendant to the tax fraud.

Furthermore, the court pointed out that the tax department had not determined the amount of taxes owed by the taxpayer following the law.

The FBR had previously violated a decision by the Lahore High Court and proceeded with criminal proceedings despite knowing of the earlier ruling.

The Islamabad High Court criticized this disregard for legal precedents, noting that the tax authorities unlawfully used their powers, infringing upon the defendant's constitutional rights.

The court expressed disappointment that the lower court did not consider the constitutional rights of the individual when granting remand and rejecting bail.

In addition, it condemned misleading actions by the lower court and highlighted the need for trial courts to review the legal validity of such actions.