T

he South Jakarta District Court turned down on Tuesday a pre-trial petition filed by coal producer PT Kaltim Prima Coal (KPC) to halt the tax office’s investigation of the company’s alleged tax evasion.

Judge Prasetyo Ibnu Asmara said the petition was rejected because it did not address the substance stipulated in Article 77 of the Criminal Code.

“The court could not justify the plaintiff’s argument in this pretrial petition. The request to stop the tax office’s investigation is wrong,” said Prasetyo.

KPC said the tax office had committed procedural violations in investigating the firm’s alleged tax evasion because it was carried out while the tax office was also examining  KPC’s tax refund claim.

KPC, which operates a massive coal mine in East Kalimantan is part of PT Bumi Resources, which is controlled by the family of former coordinating public welfare minister Aburizal Bakrie.

KPC lawyer Aji Wijaya said that by rejecting the pretrial petition, the court “legitimated” the government’s abuse of power. “We will take more legal action to challenge the court’s decision,” he said.

He said KPC might file an appeal to the Supreme Court, or the National Police or Attorney General’s Office in regard to the tax officials’ abuse of power.

“Tax investigators are civil servant investigators. Their authority is supervised by the police,” said Aji.

Speaking to reporters following the court’s decision, tax office chief Mochamad Tjiptardjo said the tax office would go ahead with its fight against companies involved in tax evasion. “I am backed up by the President. We are [living in] a state of law, just follow the law,” he said.

The case began when the tax office investigated a possible tax evasion worth Rp 2.1 trillion (US$224.7 million) involving three Bakrie Group companies — KPC, PT Arutmin Indonesia and PT Bumi Resources Tbk.

The tax office recorded that KPC allegedly owes the most of the Rp 1.5 trillion, while Bumi owes Rp 376 billion and Arutmin Rp 300 billion.

Before the investigation began, the tax office was still in the process of examining KPC’s claims for a refund of the overpaid tax the company paid in 2007.

KPC lawyer Aji said the tax office should have stopped the questioning process before it undertook the investigation.

He also said the tax office should have stopped the investigation after the Tax Tribunal denied the warrant for the investigation on Dec. 8.

Criminal code observer Rudy Satriyo from the University of Indonesia  also said earlier the petition did not address the substance stipulated in Article 77 of the Criminal Code.

“This is not the substance of a pre-trial motion. They don’t have a case,” he said. But KPC insist the case be tried.

Aji cited a pretrial motion filed by the Asian Agri Group against the tax office, which had confiscated the firms documents during an investigation of alleged evasion. “Its motion was accepted here in the South Jakarta District Court,” he said.