The VAT Intelligence yesterday filed a case against Mr Baker Cake & Pastry Shop on the allegation that the chain dodged nearly Tk 35 crore in value-added tax, said a top official.

The shop concealed data of its sales of Tk 265 crore, said Moinul Khan, director-general of the VAT Audit, Intelligence & Investigation Directorate (VAIID).

"We found that the pastry shop had been paying VAT based on made-up accounts," he said.

The field office of the National Board of Revenue (NBR) filed the case under the VAT law after it froze the bank accounts of Mr Baker last month as it unearthed that the shop was doing business without maintaining proper accounts.

In order to assess actual transactions, the VAIID asked banks to furnish account details of the shop.

Based on the bank documents, the field office detected concealment of sales information by Mr Baker between July 2014 and June 2019, according to Khan.

"We gave the shop's management time to produce documents and actual accounts. They could not furnish any even though two weeks have passed," he said.

The VAIID's move followed a post by Senior Secretary Asif Zaman on his Facebook page. He brought allegations against a branch of Mr Baker in Dhaka's Uttara about non-issuance of VAT chalans.

He requested NBR Chairman Abu Hena Md Rahmatul Muneem to take steps, citing that the government was deprived of VAT although it was paid by consumers.

Later, Muneem directed the VAIID to probe the allegation, according to a press release.

Two teams inspected the headquarters and production unit of Mr Baker on October 20. During the inspections, the field office did not get purchase and sales registers of the pastry maker as per VAT laws.

The owners, who were present during the visit, could not show documents and give satisfactory answers to the inspection teams, the VAIID said.

VAIID officials disguised as general customers also visited two outlets of Mr Baker at Uttara and Bailey Road in Dhaka and found that the pastry maker was selling products without VAT chalans.

Khan said a firm has to maintain purchase, sales and delivery receipts as per VAT law. The baker did not maintain any of the three registers, he said.

The VAIID official said his office sued the company under the VAT law, accusing Mr Baker of concealment of sales data and evasion of VAT paid by consumers.

Including a 2 per cent monthly fine for non-payment, the field office estimated that the amount of evasion by the chain to be Tk 80 crore.

The VAIID will send the case to the VAT Commissionerate Dhaka North for taking further legal measures, he said.

Contacted, Iftekhar Alam, general manager of Mr Baker, said he did not want to comment on the issue as the case is pending trial.

Established in 2001, Mr Baker widened its presence in Dhaka in the last two decades as the demand for cake and pastry has grown among urbanities.

It had 36 outlets before the coronavirus outbreak began in the country in March. It then closed three outlets after suffering huge losses as social events such as birthday celebrations have largely been cancelled.