S Alam Must Pay Tk 3,538cr In Unpaid VAT: HC

The High Court said on Monday that S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd must pay unpaid Tk 3, 538 crore Value Added Tax that they evaded in three tax years between 2019 and 2022. The bench of Justice Zafar Ahmed and Justice Sardar Md Rashed Jahangir said this when deputy attorney general Samarendra Nath Biswas told the court that the companies would not pay the unpaid VAT if their writ petition was entertained.

This time the court, however, issued a rule asking the National Board of Revenue to explain in 10 days why its notice on June 9 asking the firms to pay the VAT would not be declared illegal.

The court also set July 15 for a further hearing of the writ petition.

Meanwhile the DAG told reporters that there would be no ban on the NBR collecting the unpaid VAT from the companies as the High Court refused to stay on the realisaiton of the demand.

The companies’ lawyer, Ahsanul Karim, told the court that the revenue board demanded the VAT without exhausting the legal process relating to their objection, the appeal against the demand.

According to an audit carried out by the NBR’s VAT wing, S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd have unpaid VAT and a consequent penalty worth over Tk 7,000 crore, as they allegedly evaded VAT through various means, including by presenting lower purchase and sales data in VAT returns between 2019 and 2022.

During the period, the two companies, owned by Chattogram-based businessman Mohammed Saiful Alam, evaded Tk 3,538 crore in VAT, for which they were fined another TK 3,531 crore, said the audit report.

Of the amount, S Alam Vegetable Oil Ltd allegedly evaded Tk 1,917 crore and S Alam Super Edible Oil Ltd Tk 1,621 crore in three years from the financial years 2019-20 to 2021-22, according to the audit report submitted in October 2023 and the subsequent review  report submitted in May 2024.

NBR came up with the unpaid VAT claims after analysing the VAT returns and the financial statements audited by the two companies› CA firm as well as their written response to the VAT Commissionerate.

The audit was carried out by the field office of Customs, Excise & VAT Commissionerate, Chattogram, and was subsequently reviewed by a five-member committee headed by an additional commissioner, Chattogram VAT Commissionerate, which drew the same conclusion.

The field office audit team submitted its report on October 2, 2023.

The VAT Commissionerate said that the companies showed ‘deflated sales in their VAT returns’ than in their annual reports, audited by a chartered accounting firm, and submitted to the tax authorities by the companies themselves.

As per the audited reports from FY2019-20 to 2021-22, total sales of S Alam Vegetable Oil Ltd were Tk 12,725.95 crore, while the reported sales by the organisation in the VAT returns were Tk 2,401.92 crore.

The company did not present sales worth Tk 10,324 crore in the VAT returns.

Bedside, S Alam Super Edible Oil Ltd›s sales value in its audited financial statement was Tk 12,850.48 crore but in the VAT return, the figure was Tk 3,620.63 crore, which is Tk 9,229.84 crore less than that presented in the audited reports.