SHC restrains KPT from transferring Rs 60m to NAB

The Sindh High Court (SHC) Thursday restrained the Karachi Port Trust (KPT) from transferring foreign contractors frozen amount of over Rs 60 million to the National Accountability Bureau (NAB) investigating the fraudulently evasion of stamp duty worth Rs 30.07 million by the firm.

A division bench headed by Justice Muhammad Ali Mazhar gave this interim order on a petition filed by China International Water & Electric Company (CWE) challenging a letter of NAB authorities issued to KPT for freezing outstanding amount of contractor. The bench issued notice to the secretary interior ministry, ports and shipping, chairman NAB and KPT authorities to submit their respective comments on a petition by July 18.

The firm’s counsel submitted that CWE was awarded a dredging contract by KPT for construction of Pakistan Deep Water Container Port. He said the contractor was exempted from actual stamp duty and was asked to pay reduced stamp duty worth Rs 8.5 million by chief inspector stamps, Board of Revenue (BOR), as according to Stamp Act 1899, no duty is paid in respect of any contract executed with or in favour of government and in all such cases the government has to pay the duty.

The counsel said that almost two years after signing of the contract, the NAB authorities initiated an inquiry against the firm for allegedly fraudulently paying reduced stamp duty of Rs 8.5 million instead of actual Rs 30.07 million which caused loss to national exchequer. Subsequently, he said the NAB had directed the KPT to freeze the outstanding amount of petitioner on May 2014.

He said the act of NAB authorities was illegal as civil suit involving the matter was pending disposal and an interim order was in the field in favour of the petitioner. He requested the court to declare the act of NAB authorities illegal and direct the KPT to make payment of its outstanding amount. After initial hearing, the bench ruled that the KPT shall not transmit the frozen amount to BOR or NAB authorities and retain the same till next date of hearing.