Hunter Becomes The Hunted
The taxation directorate-general is liable to the payment of tax restitution and a fine worth at least Rp785 billion to the Permata Hijau Sawit Group. The affair is the outcome of an irreversible pre-trial decision.
AFTER being backlogged for three years, the legal process for the Permata Hijau Sawit Group’s demand for tax restitution allegedly based on fictitious tax invoices has entered a new stage. The finance ministry’s directorate-general of taxation is now facing a suit on the tax restitution’s payment plus a two-percent interest per month, submitted by the company on April 3.
The claim came following the South Jakarta District Court’s pre-trial decision in favor of the Permata Hijau Sawit Group’s lawsuit against the taxation office. The decision announced on August 29, 2014, ordered the discontinuation of investigations into the company’s fictitious invoice case. The taxation directorate-general once filed a request to the Supreme Court for a review but was rejected. Later, Supreme Court Regulation No. 4/2016 was issued, stipulating that pre-trial decisions are final in nature and no revision may be made by means of an appeal, cassation or review.
Although the legal attempt to question the pre-trial decision is now closed, the tax office is seeking another path so that the state will not be obliged to meet the claim of the company headquartered in Medan, North Sumatra. Based on June’s calculation alone, the state has to pay Rp785.87 billion in restitution and interest- Rp530.996 for restitution and the remainder for interest. "For taxpayers that are implicated in a criminal case, the payment is suspended," said head of the Regional Office for Major Taxpayers, Mekar Satria Utama, last Thursday.
According to a law enforcer who was once involved in the investigation of the case, a new legal attempt to prove that the Permata Hijau Sawit Group’s tax restitution request was made using fake invoices has to be promptly made. The tax office, he said, has so far been looking for the appropriate legal move to oppose the pre-trial decision. "The longer it’s delayed, the heavier the interest burden will be," he added.
The case began when the Medan tax office found anomalies in Permata Hijau Sawit, Nubika Jaya and Nagamas Palmoil’s tax returns. The three companies affiliated with the Permata Hijau Sawit Group allegedly used fictitious invoices with a total value of over Rp200 billion.
The tax office then annulled their obedient-taxpayer status and issued an investigation order for the three firms in 2009. This action made it impossible to disburse the three companies’ restitution claim for the tax year of 2007-2008. Permata Hijau Sawit Group maintained that the total restitution that could not be disbursed was Rp530 billion. Permata Hijau Sawit made a claim of Rp185.5 million, Nubika Jaya Rp214.2 million and Nagamas Palmoil Rp131.137 million.
Later, the taxation directorate-general discovered that the Permata Hijau Sawit Group’s invoices for the restitution application led to a number of fictitious firms. It was discovered that the fictitious invoices were issued by 14 firms allegedly cooperating with Permata Hijau Sawit Group to evade tax obligations. Executives of seven firms were already found guilty of producing fake invoices.
Not long after, the tax directorate issued 13 investigation orders from October 7, 2010, to May 11, 2012, for the Permata Hijau Sawit Group’s executive directors and employees. Investigators delivered case dossiers to prosecutors several times. But prosecutors returned the dossiers eight times for completion. Head of the Attorney General Office’s Legal Information Center Muhammad Rum could not yet confirm this information. "We’re checking it," he said.
When the dossiers were moving back and forth between the tax office and the prosecutor’s office, Permata Hijau Sawit’s Finance Director Toto Chandra, as one of the suspects in the case, filed a pre-trial lawsuit. In his contention, the taxation directorate-general was seen as procrastinating, investigating the case for six years and thus harming his company. He requested the court to terminate the inquiry.
South Jakarta District Court Judge Muhammad Razzad granted Toto’s lawsuit. The pre-trial decision was considered controversial at the time, because the judge’s verdict failed to conform to the Criminal Law Procedures Code (KUHAP), which stipulates that a pre-trial only covers whether or not an arrest, detention, investigation discontinuation or prosecution is legitimate. Whether or not the naming of an individual as suspect is legitimate was only included as the pre-trial’s objective eight months later, as specified in the Constitutional Court’s decision.
Because of the dubious pre-trial verdict, the taxation directorate-general reported judge Muhammad Razzad to the Supreme Court’s Supervisory Council, arguing that the KUHAP does not regulate the termination of protracted investigations. The specifics of article 40 of the Law on General Taxation Provisions and Procedures limit the expiration of a criminal taxation investigation to 10 years. Meanwhile, the Permata Hijau Sawit Group was only investigated for five years.
After conducting an examination, the Supreme Court, through its letter No. 1553/BP/Eks/II2014, declared judge Muhammad Razzad in violation of the provisions of procedural law and unprofessional in making the pre-trial decision. The Supervisory Council imposed a disciplinary sanction on the judge.
Supreme Court spokesman Suhadi confirmed that a disciplinary measure was taken to sanction judge Muhammad Razzad for his handling of the Permata Hijau Sawit case. But Suhadi was unwilling to reveal the sanction. "There was obviously a sanction," he said. Several months later, the Judicial Commission also recommended suspension from court for Muhammad Razzad for violating the ethical code and conduct of judges.
Although the judge handling the case has been labeled unprofessional and found to have committed a violation, the decision is irreversible as no other channel is available. Suhadi suggested that the taxation directorate-general reissue an order to investigate the case if there’s solid evidence. "Another inquiry can be conducted," he said.
A criminal law professor at the University of Indonesia, Indriyanto Seno Adji, shared Suhadi’s view. He describes the KUHAP offering no restrictions on law enforcers for reissuing an investigation order as long as the minimum evidence requirement is met. The reissuing of investigations is even supported by the Constitutional Court’s April 28, 2015, decision. "The director-general of taxation can attach the decision of the Supreme Court’s Supervisory Council as proof (guidance)," said Indriyanto.
Permata Hijau could not be asked to confirm in regard to the tax restitution request and the case developments. Tempo visited the Permata Hijau Sawit’s head office on Jalan Sultan Iskandar Muda 107 in Medan twice, on Wednesday and Thursday last week. Tanti, a receptionist at the office, said her boss was on leave. The same answer was given by Yuki, Permata Hijau Sawit’s general division staff member. Until the end of last week, Tempo’s request for an interview had received no response from the company’s management.
Linda Trianita, Iil Azkar Mondza (medan)