Tax evasion; Kannur native fined 7.5 crore rupees, only needs to pay 13 lakh rupees

Ajman: The Abu Dhabi Appeal Court has ruled that a Malayali youth who was fined Rs. 75 million (3423896 dirhams) in a tax evasion case will only have to pay Rs. 13 lakh (60000 dirhams). Muhammed Shafiq Kolappurath (38), a native of Kannadiparamba, Kannur, got a huge discount through the legal services provided by Salam Pappinissery, CEO of Yab Legal Services.

The incident related to the case took place on March 16, 2022. Based on information received by the Federal Customs Authority that cigarettes, energy drinks, etc. were being sold in Ajman without paying taxes, in violation of the law, a house in Rumaila, Ajman was raided and a large quantity of tobacco was found, including 196717 cigarette packs and 977 energy drinks, which did not have stickers for tax-paid cigarette packs. The sale was carried out by 2 Bangladeshi nationals, who evaded the government's taxes. However, Shafiq, who had come there thinking that it was a wholesale market for a low price without knowing that they were selling tax-free goods, was there at the time. Shafiq had only purchased goods from them in very small quantities. On the day of the incident, Shafiq's vehicle, which he had come to purchase goods, was inspected by customs officials. Subsequently, a small quantity of the above-mentioned items was seized from Shafiq's vehicle. Subsequently, a case was registered against all 3 people under Article No. 7/2017 of the Tax Procedure Law.

Later, in the hearing of the case held at the Abu Dhabi Criminal Court, the Criminal Court found that the 3 people had committed the crime based on the explanations and evidence provided by the prosecution. The court ordered them to pay a fine of 3,423,896 dirhams (approximately over 75 million rupees) in addition to the excise tax and value-added tax, as well as an equivalent fine. The court's verdict also applied to Shafiq, who was not a participant in the wholesale sale.

With this, Shafiq, who was in a legal dilemma and in crisis, approached Salam Pappinissery, CEO of Yab Legal Services. He examined the details of the case, understood the true situation and took up this case. Subsequently, the Abu Dhabi Appeal Court was approached and Shafiq submitted an explanatory memorandum showing that this was not an offence committed with the intention of evading taxes, that he had come to look for a place where the goods could be obtained at a lower price, that he had nothing to do with all the tax-evading goods in his house in Rumaila, Ajman, and that he had come to buy retail goods from there, and that the godown was in the name of Bangladeshis and that he had no connection with that godown or the goods there. Based on the submission of documents showing that Shafiq had no connection with that godown or the goods there, the court ruled to impose a fine only for the goods in Shafiq's vehicle. Accordingly, the Abu Dhabi Appeal Court confirmed that only 60,000 dirhams was required to be paid in the case that had been awarded 3,423,896 dirhams.