The country’s largest coal producer hopes to be able to stop the tax office investigation.

But the tax office and legal experts said the alleged procedural violations were not referred to in the substance of the pretrial motion as required by the Criminal Code.

The tax office, under the Finance Ministry, suspects three firms linked to  the Bakrie Group may have evaded taxes amounting to Rp 2.1 trillion (US$224.7 million). The companies are KPC, PT Arutmin Indonesia and PT Bumi Resources Tbk.

The tax office recorded that KPC allegedly owes the biggest tax shortfall of Rp 1.5 trillion, while Bumi is said to  owe Rp 376 billion and Arutmin is said to owe Rp 300 billion.

The tax office is investigating this allegation, but KPC says the tax office has botched its procedures.

KPC was initially questioned by the tax office over its claim for the 2007 tax return, and the company was summoned to a preliminary investigation by the tax office, said KPC lawyer Aji Wijaya.

But then the tax office began a preliminary evidence investigation for alleged tax evasion without terminating the previous investigation already underway, he said. Thus KPC filed the pretrial motion.

KPC also considered the tax office used the wrong legal grounds when issuing the preliminary
investigation warrant. The tax office used the 2007 law on taxation to examine data on the tax year 2007, when the tax office should have used the year 2000 law on taxation, he said.

KPC also said the tax office should have stopped its investigation after the Tax Tribunal on Dec. 8 denied the warrant for a preliminary investigation. But it continued.

Judge Prasetyo Ibnu Asmara said the pretrial motion would be settled within seven working days. On Tuesday the court will hear the defense of the tax office, on Wednesday and Thursday it will hear witnesses from both sides.

Fendy Dharma Saputra, head of the sub-directorate of legal aid at the tax office, said he questioned the submission of the pretrial motion under article 77 of the code.

This says a pretrial motion must question the legality of an arrest and request the halting of an investigation or indictment. “We don’t see this being done,” said Fendy.

Criminal code observer Rudy Satriyo from the University of Indonesia shared a similar opinion. “This is not the substance of a pretrial 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 firm’s documents during an investigation of alleged evasion. “Its motion was accepted here in the South Jakarta District Court,” he said.

When asked what KPC’s next step would be if the court denies its motion, Aji said: “We probably will appeal to the Supreme Court.”

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