Karachi: The Directorate of Post Clearance & Internal Audit (South) has uncovered two major cases of tax evasion involving textile importers in Karachi, leading to the registration of separate First Information Reports (FIRs).
Senior officers of the Directorate, including Director General Yaqoob Mako, Director Afzal Watto, Additional Director Tauseef Gorchani and Deputy Director Shakeel Ahmed, supervised the investigations that revealed misuse of exemptions reserved for genuine manufacturing units.
The first case involves Muhammad Faizan, proprietor of M/s Falcon Enterprises. Investigators found that the company had falsely claimed manufacturer status to secure concessionary tax rates.
An audit team visited the firm’s declared premises in Mehran Town, Korangi, and discovered that the site was merely a warehouse with no machinery or electricity connection. Only fabric waste and some furniture items were stored there, confirming that Falcon Enterprises was operating as a commercial importer rather than a manufacturer.
Despite this, the company imported 32 consignments of textile fabrics and accessories worth Rs. 601 million and claimed exemptions on Additional Sales Tax and Withholding Income Tax.
Authorities calculated that Rs. 58.2 million in taxes had been evaded. Clearing agents Najmi Zargham of Junaid Qamar Enterprises and Syed Faheem ul Hassan of Al Hassan Cargo Services were also implicated for negligence in verifying the importer’s credentials before facilitating clearance.
The second case centers on Saeed ul Hassan, proprietor of M/s S.H & Sons. The company’s declared business address in the North Karachi Industrial Area was found to be non-existent. Instead, the premises housed an unrelated business called Hani Stitching, run by another family.
The audit team confirmed that S.H & Sons had no connection to the location and no manufacturing facility. Despite this, the company imported 55 consignments of textile fabrics worth Rs. 848 million, again claiming exemptions meant for genuine manufacturers.
The evasion in this case amounted to Rs. 79.7 million. Clearing agents Shaukat Hussain and Shehzad Hussain of Luqmaniya Enterprises, Muhammad Siddique of Patanwala Traders, and Taufiq Ismail of Kanwal Enterprises were named for their role in processing the consignments without proper verification.
Both FIRs detail violations of multiple provisions of the Customs Act, 1969, the Sales Tax Act, 1990, and the Income Tax Ordinance, 2001. The offences are punishable under Section 156(1) of the Customs Act. The Directorate has stated that further investigations are underway to identify financers and abettors, and that detailed reports will be submitted to the court.
Officials emphasized that these cases highlight the importance of strict enforcement against fraudulent claims of manufacturing status, which deprive the national exchequer of significant revenue.
The coordinated efforts of Director General Yaqoob Mako, Director Afzal Watto, Additional Director Tauseef Gorchani and Deputy Director Shakeel Ahmed, along with audit teams led by Appraising Officer Hafiz Muhammad Qasim Rabbani, were instrumental in exposing the fraud and initiating legal proceedings.