The partners behind one of Bradford's top Asian restaurants must pay almost £400,000 for fiddling the taxman after their appeal was thrown out by a VAT tribunal.

The owners of the Mumtaz Paan House, which ranks Harrods as one of its customers, have been ordered to pay back £204,000 in VAT and have landed an extra evasion penalty of £194,000.

In its report released today the VAT tribunal agreed the Mumtaz partners had operated various scams, including recording restaurant bills as non-taxable cold food and totalling tills twice a day but declaring only one amount.

The Mumtaz had contested the claims and, in his evidence to the tribunal in October, joint owner Dr Gul-Nawaz Akbar, denied all knowledge of any fraud.

But, the tribunal held Dr Akbar "personally responsible for making incorrect declarations" between November 1992 and July 1995.

It found that Dr Akbar deliberately withheld till rolls from Customs & Excise officers, and that his general evidence had been unreliable and contradictory.

The report states: "We find that Dr Akbar personally directed, and continues to direct the Mumtaz, and that nothing of importance happens there without his knowledge or consent."

Tribunal chairman David Demack dismissed the appeal entirely and ordered the partners to pay the full VAT assessment, plus a further evasion penalty and costs.

The ruling marks the end of a four-and-a-half-year investigation by Customs & Excise fraud officers into the restaurant, on Great Horton Road, Bradford.

Ian Fleming, the chartered accountant acting on behalf of the Mumtaz, said: "I cannot make any comment at this time, other than to say the matter is now in the hands of our barrister.

"We will decide shortly whether or not to appeal against the ruling in the High Court. We have a time limit of one month to lodge an appeal."

Customs & Excise senior fraud officer Steve Daines, who led the investigation into the Mumtaz, said today's ruling should be a warning to other businesses.

He said: "The decision of the tribunal is particularly satisfying because the partners of the restaurant failed to co-operate throughout the investigation.

"If they had have co-operated at the beginning, and accepted the VAT assessment of £194,000 - they would have only been liable to pay a penalty of £51,000. As it stands they have now landed themselves an extra £143,000 in fines and costs."

No-one at the Mumtaz was available for comment today.

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