Summary: Anti-Money Laundering Act, 2010—Ss. 3, 4, 21(1)(a), 22, 2(xxvi), 2(xxviii) & Schedule-I, Entry XIIA—Income Tax Ordinance, 2001—Ss. 192, 192A & 199—Code of Criminal Procedure, 1898—Ss. 173 & 498—Constitution of Pakistan, 1973—Art. 185(3)—Pre-arrest bail—Money laundering prosecution founded on alleged tax evasion—Need for prior determination of tax liability—Predicate offence—The Supreme Court held that where an FIR under the Anti-Money Laundering Act, 2010 is founded on allegations of concealment of income, tax evasion, and non-reconciliation of wealth statement with bank entries, but no prior determination of tax liability has been made through the process of assessment or adjudication under the Income Tax Ordinance, 2001, initiation of criminal proceedings is prima facie illegal. The Court observed that, in the present case, the FIR alleged concealment of income during Tax Years 2017 and 2018 and tax sought to be evaded on that basis, yet the prosecution had proceeded straightaway under AMLA, 2010 without first establishing the tax liability through the legally prescribed fiscal process. It was further held that, unless the amount allegedly evaded is first determined and it is thereafter shown that any asset acquired therefrom constitutes “proceeds of crime” relatable to a predicate offence under the Schedule to AMLA, the ingredients necessary to attract Ss. 3 and 4 of AMLA, 2010 are not prima facie made out. The Court, therefore, found that the very basis of the FIR and initiation of criminal proceedings stood substantially impaired. Taxation and criminal liability—Assessment proceedings under tax law distinguished from criminal prosecution—Direct resort to criminal process deprecated—The Supreme Court held that matters pertaining to concealment of income and evasion of tax are, in the first instance, to be addressed through the assessment, adjudicatory, and recovery mechanisms provided under the tax laws and before the specialized forums constituted thereunder. Although a fiscal dispute may, in a proper case, also attract criminal liability where dishonest conduct and statutory ingredients are established, the criminal process cannot be invoked in disregard of the foundational requirement of prior determination of liability where the alleged money laundering claim itself depends upon tax evasion as the predicate offence. In the present case, the Court found that no such pre-trial legal exercise had been properly exhausted before resort was made to registration of the FIR under AMLA, 2010. Pre-arrest bail—Documentary prosecution case—Custodial interrogation unnecessary—Further inquiry—The Supreme Court held that where the prosecution case rests primarily on documentary material such as tax record, bank accounts, and bank statements, no useful purpose is ordinarily served by taking the accused into custody, particularly when there is no real likelihood of tampering with such evidence. The Court reiterated that criminal law should not be used as a tool of harassment or as a substitute for lawful recovery proceedings in matters essentially grounded in documentary fiscal disputes. In the circumstances of the case, the allegations required deeper examination, the case called for further inquiry, and the possibility of false implication and mala fide on the part of the prosecution could not be ruled out at the bail stage. The petitioner was, therefore, held entitled to the extraordinary relief of pre-arrest bail. Effect of subsequent tax adjudication—Foundation of prosecution shaken—Annulment by Appellate Tribunal Inland Revenue—The Supreme Court took note of the admitted position that, subsequent to registration of the FIR, the tax liability determined by the tax authorities against the petitioner had been annulled by the Appellate Tribunal Inland Revenue through order dated 30.06.2025. The Court held that where the criminal case is premised upon alleged tax liability, annulment of that liability by the competent fiscal forum materially weakens, at least for the time being, the foundation of the criminal proceedings. This circumstance constituted a strong consideration in favour of grant of pre-arrest bail. Investigation—Earlier placement in column No. 2—Subsequent change of stance by prosecution—Relevance at bail stage—The Supreme Court further noted that, after registration of the FIR, the first Investigating Officer had not found the petitioner guilty and had mentioned his name in column No. 2 of the report under S. 173, Cr.P.C., but in a subsequent investigation the petitioner had been found guilty on the same allegations. The Court treated this shift in investigative position as a relevant circumstance, which, when read with the documentary nature of the case and the unsettled state of the alleged tax liability, reinforced the conclusion that the matter called for further inquiry and that arrest of the petitioner was not warranted at that stage. Case references—The Court expressly referred to and relied upon Directorate of Intelligence & Investigation-FBR, through its Director and others v. Taj International (Pvt.) Ltd. & others (PLD 2025 SC 633), holding that in the absence of determination of tax liability through assessment or adjudication, registration of FIR or initiation of criminal proceedings is illegal; Muhammad Asif v. The State etc. (2016 PTD 2393), wherein pre-arrest bail was granted in a tax-related prosecution after the underlying fiscal determination had been set aside; Aqeel Ahmed Khan v. The State (2025 SCMR 1955); Ali Anwar Paracha v. The State (2024 SCMR 1596); Noman Khaliq v. The State (2023 SCMR 2122); and Abdul Rasheed v. The State and another (2023 SCMR 1948), all cited in support of the proposition that where a case is primarily based on documents and custodial interrogation serves no useful purpose, relief in bail jurisdiction may be justified. Petition converted into appeal and allowed—Impugned order set aside—Pre-arrest bail confirmed—The Supreme Court converted the criminal petition into an appeal, allowed the same, set aside the impugned order of the Lahore High Court refusing pre-arrest bail, and confirmed the ad-interim pre-arrest bail already granted to the petitioner, subject to furnishing fresh bail bonds in the sum of Rs.500,000/- with one surety in the like amount to the satisfaction of the learned Trial Court.

Summary: (a) Anti-Money Laundering Act (VII of 2010)---- ----Ss. 3, 4, 8, 20, 21, 22 & 23---Attachment of property---Alleged tax fraud/evasion as predicate offence---Requirement of prior tax proceedings/adjudication---FIR was registered alleging that petitioners had evaded Sales Tax and Income Tax amounting to Rs.598.447 million during Tax Years 2022 to 2024, and on same basis properties, vehicles and bank accounts of petitioners were attached under S.8 of Anti-Money Laundering Act, 2010---Supreme Court held that neither any proceedings under Sales Tax Act, 1990 or Income Tax Ordinance, 2001 were pending against petitioners, nor any show-cause notice had been issued, nor any tax liability had been determined through assessment/adjudication---Initiation of criminal proceedings and attachment of properties on allegation of tax evasion, without prior determination of tax liability and without opportunity of hearing, was violative of Art.10A of Constitution and principles of natural justice. Cited Case: • Directorate of Intelligence & Investigation-FBR through Director and others v. Taj International (Pvt.) Ltd. and others PLD 2025 SC 633 (b) Tax law---- ----Tax fraud/evasion---Criminal proceedings before assessment/adjudication---Not permissible---Supreme Court reiterated that tax liability is ordinarily civil in nature and must first be determined through process of assessment or adjudication under relevant taxing statute---Before coercive or penal provisions are invoked, liability must be crystallized through lawful process---Registration of FIR, initiation of criminal proceedings and coercive measures on allegation of tax fraud/evasion without lawful determination of tax due amounts to pre-empting assessment and is without jurisdiction and lawful authority. (c) Constitution of Pakistan---- ----Art. 10A---Right to fair trial and due process---Ex parte attachment of properties and bank accounts---No opportunity of hearing---Petitioners’ immovable properties, vehicles and bank accounts were attached under S.8 of Anti-Money Laundering Act, 2010 without prior notice or hearing---Supreme Court held that such action, particularly where no tax liability had yet been adjudicated, violated constitutional guarantee of due process and principles of natural justice---Attachment of all business assets and accounts brought petitioners’ entire business activity to a halt and could not be sustained without lawful justification. (d) Anti-Money Laundering Act (VII of 2010)---- ----S. 8---“Provisional attachment”---Nature and effect---Appealability---Respondents argued that attachment under S.8 was merely provisional and, therefore, appeal before High Court under S.23 was not maintainable---Supreme Court rejected contention and held that words “provisionally attach” relate to duration of attachment, initially not exceeding 180 days and extendable by Court for further period---For affected person whose properties and bank accounts are attached, order is final in its operative effect unless set aside---Since Act provides no other remedy, such order can be challenged through appeal under S.23. (e) Anti-Money Laundering Act (VII of 2010)---- ----S. 23---Appeal to High Court---Final decision or order---Interim/final distinction---Supreme Court held that S.23 permits appeal by any person aggrieved by final decision or order of Court---Legislature used word “final” with “decision” but not with “order”; therefore, for purpose of appeal under S.23, distinction between interim order and final order cannot be imported in respect of “order”---Attachment order under S.8, being an operative order affecting rights and business, was appealable before High Court. (f) Constitution of Pakistan---- ----Art. 185(3)---Petition for leave to appeal against interim order---Maintainability in exceptional cases---Respondents objected that petition before Supreme Court was not maintainable because High Court had only passed an interim order issuing notice---Supreme Court held that in exceptional circumstances involving flagrant violation of law, wrongful exercise of jurisdiction or manifest grave injustice, an aggrieved party may invoke Art.185(3) even against an interim order---Unlike Art.185(2), clause (3) uses word “order” and not “final order”, and Supreme Court has discretion to grant leave depending on facts and circumstances. Cited Cases: • Khawaja Adnan Zafar v. Hina Bashir and others 2024 SCMR 1295 • Attiq ur Rehman v. Sh. Tahir Mehmood and others 2023 SCMR 501 • Federation of Pakistan through Secretary, Ministry of Energy (Power Division), Islamabad and others v. Shafiq ul Hassan and others 2020 SCMR 2119 • Islamic Republic of Pakistan through Secretary, Establishment Division, Islamabad and others v. Muhammad Zaman Khan and others 1997 SCMR 1508 (g) Criminal Procedure Code (V of 1898)---- ----S. 561-A---Inherent jurisdiction---Ad-interim relief---Duty to give reasons---Petitioners sought suspension of attachment order before High Court through application under S.561-A, Cr.P.C.---High Court merely issued notice to Special Prosecutor for a date after three weeks and did not pass any order on interim relief or record reasons for withholding it---Supreme Court held that exercise of discretion to grant or withhold ad-interim relief must be justified through cogent reasons to maintain equilibrium between litigant parties---Failure to consider interim relief left petitioners remediless and perpetuated an allegedly illegal attachment. (h) Anti-Money Laundering Act (VII of 2010)---- ----S. 8---Attachment founded solely on tax FIR---No independent AML material---Application for attachment referred only to allegations contained in FIR registered by tax authorities---No material was shown to establish that proceedings under AML Act had been invoked independently of alleged tax evasion---Supreme Court held that attachment of properties and bank accounts, in circumstances where tax liability had not been determined and no opportunity of hearing had been provided, amounted to miscarriage of justice requiring interference. Disposition: Criminal Petition was converted into appeal and allowed along with C.M.A.; operation of attachment order dated 24.12.2025 passed by Special Judge, Customs, Taxation and Anti-Smuggling-I, Karachi, attaching petitioners’ properties, vehicles and bank accounts under S.8 of Anti-Money Laundering Act, 2010, was suspended till final decision of Special Criminal Appeal No.01/2026 pending before learned Single Judge of High Court of Sindh at Karachi.

Summary: Constitution of Pakistan, 1973--- ----Art. 175E(5) & Federal Legislative List, Entry 49---Khyber Pakhtunkhwa Sales Tax on Services Act, 2022, Sch. 2, Serial No. 14---Provincial sales tax on services---Construction services---Challenge to vires---Tax on services vis-à-vis tax on goods---Scope of provincial taxing power after Eighteenth Amendment--- Petitioners challenged vires of Serial No. 14 of Schedule 2 to Khyber Pakhtunkhwa Sales Tax on Services Act, 2022 on ground that levy described as tax on “Construction Services” in substance included goods component of construction contracts, which, according to petitioners, could only be taxed by Federation under Entry 49 of Federal Legislative List---Federal Constitutional Court held that impugned provision, when read harmoniously with Entry 49, imposed tax only on services and not on goods---After Eighteenth Amendment, power to levy tax on services vested exclusively in Provinces, while Federation retained competence over taxes on sales and purchases of goods except sales tax on services---Impugned entry was confined to construction and allied services and was not inconsistent with Constitution---Even learned counsel for petitioners conceded that Serial No. 14 was confined to services and did not extend to goods---Accordingly, no ground was made out to strike down impugned law as ultra vires. Khyber Pakhtunkhwa Sales Tax on Services Act, 2022--- ----Levy on entire contractual consideration---Inclusion of goods component---Double taxation concern---Adjustment mechanism---Need for bifurcation--- Court, however, observed that grievance of petitioners substantially related not to vires of law but to manner of its implementation, as show-cause notices had demanded tax on entire contractual consideration for period from July 2021 to April 2022, including value of goods utilized in performance of contracts---Court noted that statute itself allowed claim of adjustments, including refunds, regarding tax paid under other laws on goods or taxable services used in provision of taxable services, and Memorandum of Understanding between FBR and KPRA also envisaged cross-adjustment to avoid double taxation---Matter was thus governed by existing law and administrative arrangement and did not warrant constitutional invalidation of impugned provision---Court nevertheless emphasized that KPRA should devise clearer mechanism, rules or Standard Operating Procedures requiring bifurcation of contractual consideration into service component and goods component so that only service portion is subjected to provincial sales tax and unnecessary hardship to taxpayers is avoided. Constitution of Pakistan, 1973--- ----Art. 175E(5)---Federal Constitutional Court---Jurisdiction---Tax reference involving vires of law--- Though tax references were not expressly enumerated within ordinary appellate jurisdiction of Federal Constitutional Court, challenge in present case involved substantial question of constitutional interpretation, namely vires of provincial law---Court held that Art. 175E(5) empowered it, on its own motion or otherwise, to call for record of “any case” from “any court” where substantial question of law as to interpretation of Constitution arose---Such power was unqualified and wide enough to include tax references and other proceedings even where express jurisdiction might not otherwise be specifically mentioned---Since vires of legislation inherently raised substantial constitutional question, Federal Constitutional Court was competent to adjudicate matter and, under present constitutional scheme, is sole apex forum for determining vires of legislation. (a) Provincial sales tax on services---Construction services---Constitutional validity--- After the Eighteenth Amendment, Provinces possess exclusive competence to levy tax on services, while Federation retains competence to tax goods under Entry 49 of Federal Legislative List, except sales tax on services---Serial No. 14 of Schedule 2 to Khyber Pakhtunkhwa Sales Tax on Services Act, 2022, being confined to “Construction Services” and allied services, was intra vires the Constitution. (b) Vires challenge---Harmonious construction of constitutional and statutory provisions--- Where constitutional entry and impugned statutory provision can be read harmoniously without contradiction, constitutional invalidation is not warranted---Impugned law did not trench upon federal taxing domain over goods merely because construction contracts may involve use of goods in course of service delivery. (c) Levy on whole contract amount---Goods and services mixed in construction contracts---Effect--- If tax is demanded on entire contractual consideration, inclusive of both service charges and cost of goods utilized in execution of contract, such grievance pertains to application and assessment mechanism rather than constitutional validity of charging provision itself---Province may tax service component only and not goods component. (d) Double taxation concern---Statutory adjustment and refund mechanism--- Where statute provides for adjustment or refund of tax paid under other laws on goods or taxable services used in provision of taxable service, and there exists inter-agency arrangement for cross-adjustment, apprehended double taxation is addressable within framework of law and does not by itself render charging provision unconstitutional. (e) Revenue administration---Need for bifurcation of contractual consideration--- Revenue authority should streamline process by first requiring taxpayer to identify and segregate portion of contractual consideration attributable to services and portion attributable to goods, so that provincial sales tax is levied strictly on services while goods component remains governed by federal sales tax regime---Formulation of rules or Standard Operating Procedures to this effect was recommended. (f) Federal Constitutional Court---Jurisdiction over tax reference involving vires of law--- Even though tax references are not expressly listed in ordinary heads of jurisdiction, Art. 175E(5) authorizes Federal Constitutional Court to call for and adjudicate “any case” from “any court” if it involves substantial question of law as to interpretation of Constitution---Challenge to vires of legislation inherently raises such question and therefore falls within jurisdiction of said Court. (g) Present constitutional scheme---Forum for striking down legislation--- Under present constitutional arrangement, authority to adjudicate upon vires of legislation and to strike down laws on constitutional grounds vests in Federal Constitutional Court, and not in Supreme Court, wherever substantial question of constitutional interpretation is involved. Leave refused; petitions dismissed; impugned judgment affirmed.

Summary: Summary pending.

Summary: Summary pending

Summary: Short order ---- Income Tax Ordinance, 2001—Ss. 4B & 4C—First Schedule, Part I, Division IIA & Division IIB—Fifth Schedule, Rules 4, 4AA & 4AB—Constitution of Pakistan, 1973—Arts. 25, 73(2)(a), 175F, 185(3)—Fourth Schedule, Federal Legislative List, Part I, Entry 47—Super tax—Constitutional validity—Nature of levy—Tax on income—The Federal Constitutional Court considered the vires of super tax imposed under S. 4B, introduced through the Finance Act, 2015 for raising revenue for internally displaced persons, and under S. 4C, introduced through the Finance Act, 2022 on high-earning persons. The Court held that both S. 4B and S. 4C were validly enacted taxes on income falling squarely within Entry 47 of Part I of the Federal Legislative List, and that Parliament was fully competent to impose, alter, regulate, or abolish such taxes through a Finance Act as part of a Money Bill under Art. 73(2)(a) of the Constitution. It was further held that super tax under S. 4B was a “tax” and not a “fee”, and that neither S. 4B nor S. 4C suffered from any inherent lack of legislative competence or facial constitutional infirmity warranting invalidation. Constitutional law—Fiscal legislation—Article 25—Classification—Income-based and sector-based distinctions—The Court held that the classification created under S. 4B was income-based, founded on intelligible differentia, and bore a rational nexus with the object sought to be achieved; therefore, it was neither discriminatory nor productive of unreasonable or hostile discrimination among persons similarly situated. Likewise, the classification of fifteen sectors in the First Proviso to Division IIB, Part I, First Schedule, subjected to a higher rate of super tax under S. 4C for tax year 2022, was held to be reasonable and constitutionally permissible under Art. 25 of the Constitution. Consequently, the judgments of the Sindh, Lahore and Islamabad High Courts, insofar as they had declared the said proviso discriminatory, were set aside. Taxation—Retrospective operation of fiscal statutes—Tax year 2022 and onwards—Past and closed transactions—The Court held that the legislature possesses plenary power to enact laws with retrospective as well as prospective effect, subject to the limitation that such laws must not operate upon past and closed transactions. Applying that principle, it was held that S. 4C validly applied to tax year 2022 and onwards, and that the closing of accounts for a tax year did not, in the scheme of the Income Tax Ordinance, 2001, constitute such an event as would preclude imposition of a fresh charge, particularly when returns for tax year 2022 were yet to be filed. On the same reasoning, the rates in Division IIB amended through the Finance Act, 2023 were held applicable to tax year 2023. Accordingly, the contrary findings of the Sindh, Lahore and Islamabad High Courts, which had held S. 4C inapplicable to tax year 2022, and the amended rates inapplicable to tax year 2023, were set aside. Income Tax Ordinance, 2001—S. 4C(2)—Meaning of “income”—All sources of income—Capital gains on securities—The Court held that the statutory definition of “income” for purposes of S. 4C, insofar as it embraced income from all sources, was validly enacted. The judgments of the Islamabad High Court which had read down S. 4C were, to that extent, set aside. It was further held that super tax under S. 4C is a self-contained and standalone tax on income independent of the levy under S. 4 of the Ordinance, and, therefore, applies to capital gains falling under S. 37A and the Eighth Schedule, being within the ambit of S. 4C(2)(i) and (iv). Practice and procedure—Maintainability of appeals—Locus standi of CIR/FBR—Transposition of parties—The taxpayers raised a preliminary objection that appeals in the S. 4C matters were not maintainable because they had not been instituted by the Federation of Pakistan. The Court rejected the objection and held that it possessed inherent power to transpose a party where necessary for just and proper adjudication, and since the Federation was already before the Court as respondent, it could be transposed as appellant, which was accordingly done. The Court further noted that several connected matters had, in any event, been filed by the Federation itself in addition to the Commissioner Inland Revenue and Federal Board of Revenue; hence, the appeals were maintainable on that count as well. Exploration and petroleum companies—Fifth Schedule—Petroleum Concession Agreements—Aggregate tax ceiling—Super tax liability—The Court held that Ss. 4B and 4C, by virtue of Rules 4AA and 4AB of the Fifth Schedule, would apply to income arising to oil exploration and petroleum companies only to the extent that such application did not result in exceeding the aggregate rate of taxes provided in the Fifth Schedule and in their respective Petroleum Concession Agreements. In relation to S. 4C, the Court modified the Islamabad High Court judgment to the extent that the departmental determination of each Petroleum Concession Agreement was to be undertaken by juxtaposing its terms and conditions with the Regulation of Mines & Minerals (Government Control) Act, 1948 and the applicable tax law, whether the Income Tax Act, 1922, the Income Tax Ordinance, 1979, or the Income Tax Ordinance, 2001. The Court further held that S. 4C would continue to apply to other income of such companies from all other sources falling under S. 4C(2)(i), (ii) and (iii), but the concerned Commissioner Inland Revenue must first determine liability afresh and afford an opportunity of hearing before taking recovery measures. Special statutory regimes—Sector-specific protection—No implied override—The Court held that S. 4C could not be construed to operate in a manner inconsistent with Rule 4 of the Fifth Schedule, because that rule embodied a sector-specific framework recognizing the unique nature, risks and investment requirements of the petroleum and exploration industry. Imposition of super tax beyond the prescribed threshold would override that legislative safeguard, impose an excessive and disproportionate burden, and frustrate the very purpose for which the special provisions had been enacted. In the absence of a clear and express legislative intention to abrogate or modify those sectoral thresholds, S. 4C could not be interpreted so as to produce that result. Banking companies—Super tax—Tax year 2023 onwards—The Court held that S. 4C, as enacted through the Finance Act, 2022, applied to banking companies for tax year 2023 and onwards, and at the rates made applicable to tax year 2023 by the Finance Act, 2023. Exempt entities—Provident and benevolent funds—Statutory exemption—Super tax not chargeable—The Court held that, without prejudice to the foregoing declaration upholding S. 4C, the said provision would not apply to income, particularly of benevolent funds, enjoying exemption from tax under S. 53 read with the relevant provisions of the Second Schedule to the Ordinance. Such funds constituted a distinct class expressly exempted by the Legislature in furtherance of recognized charitable and welfare objectives, and subjecting them to super tax would defeat the statutory exemption and be inconsistent with the legislative scheme. In the case of provident and benevolent funds before the Court, it was held that those holding valid exemption certificates under the Ninth Schedule read with the relevant entries in the Second Schedule were not liable to pay super tax under S. 4C. The Court directed such funds to furnish their exemption certificates for the relevant tax years to the concerned Commissioners Inland Revenue within fifteen days, whereupon written orders absolving them of liability were to be passed within seven days. Constitutional transition—Transfer of pending matters—The Court noted that, owing to the complexity of the issues and the large number of pending cases concerning Ss. 4B and 4C for multiple tax years, the Supreme Court had, by order dated 12.03.2025 under the erstwhile Art. 186A of the Constitution, directed that all such cases pending in various High Courts and the Supreme Court be transferred and clubbed for final adjudication. Upon the coming into force of the Twenty-Seventh Amendment, all such cases stood transferred to the Federal Constitutional Court by virtue of Art. 175F of the Constitution. Appeals, petitions and transfer cases disposed of—The Federal Constitutional Court upheld S. 4B as intra vires and applicable for tax year 2015 and onwards; upheld S. 4C as intra vires and applicable for tax year 2022 and onwards; upheld the amended rates for tax year 2023; sustained the statutory definition of income and the sectoral classification under the First Proviso; declared S. 4C applicable to capital gains on securities and to banking companies for tax year 2023 onwards; limited the application of Ss. 4B and 4C to exploration and petroleum companies in accordance with the Fifth Schedule and their Petroleum Concession Agreements; protected exempt provident and benevolent funds from liability under S. 4C; set aside the contrary findings of the High Courts to the extent indicated; and disposed of all appeals, petitions and transfer cases accordingly.

Summary: Summary pending.

Summary: Income Tax Ordinance (XLIX of 2001)--- ----S. 175---Power to enter and search premises---Scope and conditions for exercise---Pending proceedings, necessity of---Interpretation of taxing statute--- Petitioner challenged validity of raid conducted by tax authorities under S.175 of the Income Tax Ordinance, 2001, contending that said provision could only be invoked where some proceedings were already pending against taxpayer and that prior notice issued under S.176 of the Ordinance could not by itself justify raid---Federal Constitutional Court examined plain language of S.175 and held that provision expressly authorized Commissioner, or officer authorized by him in writing, to enter and search premises, without prior notice, in order to enforce any provision of the Ordinance, including for purpose of audit of taxpayer or survey of persons liable to tax---Court held that no requirement of pre-existing or pending proceedings could be read into statute when legislature had not imposed any such limitation in express terms---Interpretation adopted in Agha Steels Industries v. Directorate of Intelligence and Investigation (2019 PTD 2119), to effect that there must be pending proceedings and search was measure of last resort, was respectfully disagreed with as such gloss was unsupported by statutory text and amounted to diluting clear legislative command---However, Court further clarified that power under S.175 was not unlimited or unfettered, but conditional in nature, since term “enforce” necessarily postulated breach or occasion for enforcement, and there must therefore be clear written statement identifying provision of Ordinance sought to be enforced and reasons for invoking coercive power so as to guard against abuse---In present case, impugned judgment of High Court upholding raid did not suffer from legal infirmity warranting interference---Leave to appeal was refused and petition was dismissed. Agha Steels Industries v. Directorate of Intelligence and Investigation (2019 PTD 2119); K.K. Oil and Ghee Mills Pvt. Ltd. v. FBR (2016 PTD 441); Khurram Shahzad v. Federation of Pakistan (2019 PTD 1124); Edwards v. Edwards (1876) 2 Ch.D. 291 rel. (a) Interpretation of statute---Plain meaning rule---Application--- Where words of statute are clear, plain and unambiguous, Court must give effect to their ordinary meaning and cannot import into provision restrictions, qualifications or conditions not chosen by legislature---Primary duty of Court is to ascertain intention of legislature from language actually employed in enactment. (b) Section 175, Income Tax Ordinance, 2001---Pending proceedings---Whether prerequisite--- Section 175 authorizes Commissioner or duly authorized officer, without prior notice, to have access to premises, accounts, documents and computers in order to enforce any provision of the Ordinance, including for audit or survey---Nothing in text of provision makes pendency of proceedings against taxpayer a condition precedent for exercise of such power---Such requirement cannot be judicially engrafted into statute. (c) Search and raid under S.175---Whether last resort--- View that search under S.175 may be resorted to only as last measure where there is obstruction in pending proceedings was not borne out by statutory language---Courts are not competent to dilute or rewrite a clear taxing provision on ground of perceived severity, such matter being within legislative domain. (d) Section 175---Nature of power---Conditional, not unfettered--- Although existence of pending proceedings is not necessary, power under S.175 is nevertheless not absolute---Use of expression “in order to enforce any provision of this Ordinance” signifies that power is linked with enforcement of law and therefore presupposes some breach or legally cognizable occasion requiring enforcement---Authorities must clearly identify, in writing, provision of Ordinance sought to be enforced and reasons for such action, failing which power may be open to abuse. (e) Notice under S.176---Effect on power under S.175--- Mere fact that information or documents had earlier been sought under S.176 did not, by itself, negate or exclude subsequent exercise of power under S.175, where competent authority considered enforcement action necessary within meaning of statute. (f) High Court judgment---Interference in leave jurisdiction---Scope--- Where impugned judgment did not suffer from any legal infirmity in light of proper construction of S.175 and surrounding facts, no case for interference in leave jurisdiction was made out. Leave refused; petition dismissed.

Summary: After examining the discrepancies forming basis of the show cause notice issued by the Commissioner while exercising jurisdiction under sub-sections (5A) and (9) of section 122 of the Ordinance, we are of the considered view that in the circumstances, Commissioner was precluded to exercise his powers under sub-section (5A) of section 122 of the Ordinance. The Commissioner, at the most, should have resorted to sub- section (5) of section 122 of the Ordinance, if he intended to amend the assessment order of the Assessing Officer. 39Objection Case (Writ)-Civ. 100-26 MUHAMMAD SHAFIQ VS GOP ETC Mr. Justice Muzamil Akhtar Shabir 21-01- 2026 2026 LHC 36

Summary: Following questions of law have been put before this Court for opinion: 1. Whether in the facts and circumstances of the case, the learned Appellate Tribunal Inland Revenue Multan Bench, Multan ("the Tribunal") was justified in upholding the order of the learned Commissioner Inland Revenue (Appeals) ["CIR(A)"] wherein the learned CIR(A) has reduced the turnover of the taxpayer for charging of advance tax under Section 236H of the Income Tax Ordinance, 2001 ("the Ordinance") upto 33% of the total turnover without quoting any provision of the Income Tax Ordinance, 2001? 2. Whether in the facts and circumstances of the case, the learned Tribunal was justified in mechanically validating the order of the learned CIR(A) who relied on an earlier judgment of CIR(A) for restricting application of Section 236H of the Ordinance only to the extent of 33% of the total turnover?thereby relying on another case which was decided in violation of the existing legal provisions and for which no rationale or evidence existed? Held that the tax law requires determination of liability to be based on actual verifiable transaction, and not arbitrary percentages, more so, when the law does not prescribe such percentage/formula, therefore, the CIR(A) as also the Tribunal erred in applying the said percentage. At the same time, we find force in argument of learned counsel for the respondent-taxpayer inasmuch as the Assessing Officer also failed to discharge its duties to make the assessment based on facts and record presented by the respondent-taxpayer. It was obligatory on the Assessing Officer to assess the record and see whether the portion of sales by the respondent-taxpayer went directly to the end users/consumers and should not be subjected to the withholding tax under Section 236H of the Ordinance for the purpose of advance tax. Further held that if the sales are made directly to the end users/consumers, the same do not fall under the ambit of sales to the retailers. Section 236H of Ordinance primarily deals with sales to the retailers and in cases where the distributor claims direct sale to the general consumer against gross sales/receipts, the Assessing Officer shall examine the nature of transaction for the purpose of advance tax, as the case may be. 47Crl. Misc.- Post- arrest Bail 10529- B-25 AMIR VS STATE ETC Mr. Justice Ch. Sultan Mahmood 13-01- 2026 2026 LHC 913