The Benami Zone II Lahore directorate of Federal Board of Revenue (FBR) has filed references against Alliance Sugar Mills and Hunza Sugar Mills on charge of making benami transactions worth around Rs 1 billion.
According to official sources the Benami Zone II of Lahore in its investigation has found that Alliance Sugar Mills was involved in benami transactions of Rs 550 million, where as in Hunza Sugar Mills such transactions amour to be Rs 370 million.
The sources said that show cause notices under section 22 of Benami Transaction (Prohibition) Act 2017 had been served upon M/s Hunza Sugar Mills and M/s Alliance sugar mills.
According to the investigations, the two mills, along with the actual buyers of sugar and its brokers were allegedly found to have conducted benami transactions. “Sales tax returns of Alliance Sugar Mills and Hunza Sugar Mills transpired that sugar had been sold by mills to unregistered persons,” the sources said, adding, “in order to check the authenticity of these buyers, Benami Zone II, Lahore issued summons to multiple purchasers who in their written statements denied knowledge of any such transaction.”
The sources maintained the findings revealed that the unregistered purchasers being shown in sales tax returns of the said sugar mills were ostensible owners including low paid workers or truck drivers, rather than the real owners, which to date remain unaware of their involvement in sugar purchase.
It is to be mentioned here that Benami Zone II, Lahore had taken up investigation against 5 sugar mills for the verification of benami transactions. Purchasers with the largest quantities as declared by the mills in their sales tax returns, were randomly summoned to ascertain their authenticity as buyers of sugar.
“The exercise unraveled the occurrence of benami transactions at a large scale during the preliminary investigation,” the sources said, adding, however Due to HR constraints, logistical limitations and narrow timelines involved in the proceedings, detailed scrutiny was initiated in two sugar mills initially i.e. Alliance Sugar Mills and Hunza Sugar Mills”.
According to the section 22 of Benami Transaction (Prohibition) Act 2017, after the filing of reference, the Adjudicating Authority is under obligation to issue notice to the beneficial owner, benamidar and any interested party within 30 days of receipt of reference requiring them to file their reply. In case benamidar/beneficial owner is involved in the commission of benami transaction, the Adjudicating Authority would pass order holding the property referred in reference as benami property and passing order to that effect. The law binds Adjudicating Authority to decide reference within one year from the date of filing of reference. The Adjudicating Authority, after holding the property benami, initiates proceedings for confiscation of benami property.
Besides confiscation of benami property, the law provides prosecution of benamidar, beneficial owner and abettor etc. Subsequent to the trial, the law provides that the person involved in benami transactions would be sentenced to imprisonment extending from one year to seven years and additional payment of 25 percent of fair market value of the property involved.