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: Bail granted --- (a) Anti-Money Laundering Act, 2010 – Ss. 3 & 4 – CrPC, S. 497(1) – Prohibitory clause – Bail in money laundering cases – Scope of sentence range While determining the applicability of the prohibitory clause of Section 497(1) CrPC, the maximum prescribed sentence under Section 4 of the AMLA (1 to 10 years) must be considered—not the minimum. The Supreme Court clarified that courts at bail stage are not permitted to undertake speculative exercises about the likely sentence. This aligns with the rulings in Socha Gul v. State (2015 SCMR 1077) and Qasim Ali case (2019 SCMR 1928), overruling earlier views that focused on minimum sentence (e.g., Jamal-ud-Din v. State). Held: Section 3 AMLA falls within the prohibitory clause of Section 497(1) CrPC. (b) CrPC, S. 497(2) – Further inquiry – Post-arrest bail – Circumstantial bail grant Petitioner Jabran, alleged to be a front-man aiding money laundering, had no direct role in predicate offences and was not nominated in FIRs based on them. Documentary evidence showed he merely brokered the property deal and his cheque used as security was never encashed. Moreover, he was incarcerated for over six months without submission of challan. Held: Case warranted further inquiry; bail granted under Section 497(2) CrPC. (c) Anti-Money Laundering Act, 2010 – S. 2(xxiii) – “Proceeds of crime” – Nexus with predicate offences – Timing of property purchase Accused Muhammad Afnan Alam was alleged to have purchased properties from proceeds of crimes allegedly committed while serving in CDA. However, scrutiny of interim challan and official records showed that the three questioned properties were purchased before the relevant allotment approvals forming the predicate offences, raising doubt over nexus. Held: In absence of clear connection with predicate offences and with bail already granted in all predicate FIRs, case fell under further inquiry. (d) Constitutional Rights – Article 10-A – Fair trial and due process – Bail as a safeguard against pre-trial punishment Both accused were incarcerated without trial for extended durations, with no risk of tampering with documentary evidence. In light of Article 10-A, prolonged pre-trial detention without strong evidence linking them directly to laundering proceeds of crime violated fair trial guarantees. Held: Bail granted to preserve due process rights. Disposition: Leave granted. Petitions converted to appeals. Bail granted to Jabran and Muhammad Afnan Alam in FIR No.02/2024 under AMLA Ss. 3 & 4, subject to furnishing bail bonds of PKR 1,000,000 with two sureties each.

Summary: Bail granted ---- (a) Constitution of Pakistan (1973) ----Art. 10-A--- Right to fair trial---Scope---Held, that in criminal proceedings involving multiple accused persons and overlapping FIRs, Anti-Terrorism and Trial Courts must ensure the accused’s access to fair trial under Art. 10-A, including timely provision of case records, exemption from personal appearance where legally warranted, and attention to logistical challenges due to concurrent proceedings. (b) Criminal Procedure Code (V of 1898) ----S. 497(1)--- Bail---Prohibitory clause---Scope---Interpretation of punishment range---Held, for purposes of S. 497(1), Cr.P.C., the maximum punishment prescribed under the statute is to be considered in determining application of the prohibitory clause; courts cannot base decisions on speculative minimum sentencing or sentencing guidelines. Previous contrary interpretation in Jamal-ud-Din v. State (2012 SCMR 573) and Khuda Bux v. State (2010 SCMR 1160) clarified and departed from. [Ref: Socha Gul v. State (2015 SCMR 1077), ANF v. Qasim Ali (2019 SCMR 1928)] (c) Anti-Money Laundering Act (VII of 2010) ----Ss. 3 & 4--- Money laundering---Bail---Petitioners accused of laundering proceeds of crime through purchase of property and vehicle---Petitioner No. 1 alleged to have acted as frontman and issued cheque for Rs.3.5 million---Cheque not encashed and property documents indicated role of a property dealer---Held, case against both petitioners fell under “further inquiry” per S. 497(2), Cr.P.C.---All predicate offences under FIRs No.03, 05, and 11/2024 arose after the acquisition of properties mentioned in FIR No.02/2024---Prosecution’s reliance on documents already in possession and lack of tampering risk justified grant of post-arrest bail. (d) Interpretation of Statutes ----Statutory construction--- “Punishable” under S. 497, Cr.P.C.---Held, the term “punishable” in prohibitory clause must be interpreted in light of maximum sentence prescribed in law, not minimum threshold---Any contrary approach amounts to prejudging the merits and usurping trial court’s discretion on sentencing. (e) Bail ----Post-arrest bail---Further inquiry---Predicate offences---Held, where accused has already secured bail in all predicate offences from which alleged proceeds of crime were generated, new case under AMLA, based on same allegations, falls within scope of further inquiry---Interim findings or suspicion do not justify continued incarceration absent concrete proof of illegal gains. Disposition: Leave to appeal granted. Petitions converted into appeals and allowed. Petitioners admitted to post-arrest bail subject to furnishing bail bonds of Rs. 1,000,000/- each with two sureties to satisfaction of trial court.

Summary: Bail denied ---- (a) Criminal Procedure Code (V of 1898)----Ss. 496, 497, 498 & 154---Pre-arrest bail---Foreign offence---Registration of FIR in Pakistan---Double jeopardy---Scope---Petitioner, accused of embezzling funds while employed in Oman, sought pre-arrest bail in Pakistan---FIR alleged that petitioner received cash, a diamond ring, and a bank card from complainant in Muscat, Oman, and instead of fulfilling assigned duties, transferred Omani Riyals into his and his wife’s bank accounts in Pakistan, then absconded---Petitioner argued that registration of FIR in Pakistan amounted to double jeopardy, since complaint had already been lodged in Oman---Held, registration of FIR in Pakistan not barred under S. 188, Cr.P.C., where a Pakistani citizen commits offence abroad---Criminal courts in Pakistan can try such persons if found within the country---Section 403 Cr.P.C. protection (against double jeopardy) only applies where accused has been tried and convicted or acquitted by competent court---No such trial or acquittal/conviction occurred in Oman, thus protection of S. 403 not attracted---Petitioner's objection regarding double jeopardy rejected.(b) Pakistan Penal Code (XLV of 1860)----Ss. 406, 408 & 405---Criminal breach of trust by servant---Misappropriation---Transfer of embezzled funds---Scope---Petitioner, employed as a driver in complainant’s company in Oman, was entrusted with significant cash, jewelry, and bank card---Instead of performing his duty, petitioner misappropriated the entrusted assets and transferred equivalent amount into his and his wife's bank accounts in Pakistan---Held, entrustment and subsequent dishonest misappropriation satisfied ingredients of criminal breach of trust under Ss. 405 & 408, PPC---Petitioner failed to dislodge prima facie evidence of his involvement or establish mala fide on part of complainant---Grant of pre-arrest bail held not justified.(c) Anti-Money Laundering Act, 2010----S. 3---Proceeds of crime---Offence committed abroad---Transfer of criminal proceeds into Pakistani accounts---Scope---Held, petitioner’s act of transferring embezzled funds from Oman into his and his wife's bank accounts in Pakistan, knowing it was illicit wealth, attracted provisions of Anti-Money Laundering Act, 2010---Investigating Officer directed to examine applicability of AMLA provisions for further legal action.(d) Criminal Procedure Code (V of 1898)----Ss. 498 & 497---Pre-arrest bail---Extraordinary relief---Scope---Held, bail before arrest is an extraordinary concession granted only in cases of mala fide or false implication---Where strong prima facie evidence connects accused with offence, and no enmity or ulterior motive is established, bail cannot be granted---Petitioner’s plea of victimization held baseless---Ad-interim bail withdrawn.Disposition: Petition dismissed; ad-interim pre-arrest bail withdrawn.Cited Cases:• Dr. Imran murder case, Islamabad High Court (2022 PCr.LJ 1511)• 2011 YLR 2882• Section 403 Cr.P.C. interpreted in light of foreign prosecution protectionsCited Legislation:• Pakistan Penal Code (XLV of 1860), Ss. 405, 406, 408• Criminal Procedure Code (V of 1898), Ss. 3, 154, 188, 403, 496–498• Anti-Money Laundering Act, 2010, S. 3

Summary: Background: This criminal appeal involved the prosecution of individuals accused of tax evasion and money laundering under the Anti-Money Laundering Act, 2010 (AMLA), based on offenses listed under the Income Tax Ordinance, 2001 (ITO). The prosecution claimed that the respondents failed to explain significant amounts of income and engaged in money laundering by concealing taxable income between the years 2014 and 2017. The Special Court (Customs, Taxation & Anti-Smuggling) had acquitted the accused under Section 265-K of the Criminal Procedure Code (Cr.P.C.), and the State appealed the acquittal. -----Issues: 1- Whether the Special Court correctly acquitted the accused under Section 265-K Cr.P.C. when the charges included tax evasion and money laundering under AMLA and ITO. ----2- Whether the provisions of AMLA could be applied retrospectively for offenses that occurred before May 20, 2016, when Sections 192 and 192A of the ITO were included in the AMLA’s schedule of predicate offenses. ----3- Whether sufficient evidence was presented to support the charges of tax evasion and money laundering. ----4- Whether the investigating officer (I.O.) had the legal authority to investigate and prosecute the case under the AMLA and ITO without the required findings from tax authorities. -----Holding/Reasoning/Outcome: The Islamabad High Court dismissed the appeal and upheld the acquittal of the respondents. --Retrospective Application: The court held that the AMLA provisions could not be applied retrospectively. The offenses under Sections 192 and 192A of the ITO were added to AMLA’s schedule of predicate offenses only on May 20, 2016. Therefore, any offenses related to tax years before that date could not be prosecuted under AMLA due to Article 12 of the Constitution, which prohibits retrospective punishment. --Insufficient Evidence: The court found that the prosecution failed to provide conclusive evidence that the respondents engaged in tax evasion or money laundering. The Investigating Officer admitted that the audit for the relevant tax years was incomplete, and there were no conclusive findings from tax authorities regarding tax evasion. --Authority of Investigating Officer: The court also questioned whether the Investigating Officer had the legal authority to initiate the prosecution. The investigation was based on personal assumptions and not on formal findings from the tax authorities. The court emphasized that for tax evasion to qualify as a predicate offense under AMLA, tax authorities must first determine tax evasion or false statements. The appeal was dismissed, and the acquittal under Section 265-K Cr.P.C. was upheld, as there was no probability of conviction based on the evidence presented. -----Citations/Precedents: 1993 SCMR 523 – State vs. Ashiq Ali Bhutto PLD 1997 SC 275 – Muhammad Khalid Mukhtar vs. The State 1998 SCMR 1840 – Zahoor ud Din vs. Khushi Muhammad PLD 2009 SC 102 – Ajmeel Khan vs. Abdur Rahim 2023 PCrLJ 38 Islamabad – Muhammad Rafiq vs. DG FIA, Islamabad 2021 PCLJ 946 Lahore – Deputy Director Anti Money Laundering vs. Special Judge PLD 2021 SC 1 – Justice Qazi Faez Isa vs. The President of Pakistan and others 2024 PTD Lahore 517 – Abdul Saboor vs. Federation of Pakistan

Summary: Background: The appellants, facing charges under the Anti-Money Laundering Act, 2010, challenged an order passed by the Special Court (Customs, Taxation & Anti-Smuggling) in Rawalpindi/ICT. The case originated from a tax investigation that led to the issuance of a notice under section 9(1) of the Anti-Money Laundering Act, 2010, based on alleged tax evasion under sections 192/192-A of the Income Tax Ordinance, 2001. The appellants sought relief under section 265-K Cr.P.C., which was dismissed by the trial court. They then filed a criminal appeal before the Islamabad High Court. -----Issues: 1- Whether the invocation of the Anti-Money Laundering Act, 2010, for the tax year 2014 is valid given the fact that sections 192/192-A of the Income Tax Ordinance were added to the Schedule of predicate offenses in 2016. ----2- Whether the proceedings initiated under section 9(1) of the Anti-Money Laundering Act, 2010, against the appellants were lawful. ----3- Whether the trial court erred in dismissing the application under section 265-K Cr.P.C., despite the appellants' arguments that the alleged offense occurred before the inclusion of tax evasion in the predicate offenses of the AMLA. -----Holding/Reasoning/Outcome: The Islamabad High Court held that sections 192/192-A of the Income Tax Ordinance, 2001, were added to the Schedule of the Anti-Money Laundering Act, 2010, by SRO No.425(I)/2016, effective from May 14, 2016. As a result, any alleged tax evasion before this date (such as in the tax year 2014) could not form the basis for prosecution under the Anti-Money Laundering Act. The court found that the trial court, as well as the investigating officer, had misapplied the law by prosecuting the appellants for a period before the inclusion of the tax offenses in the AMLA's Schedule of predicate offenses. Therefore, the proceedings were beyond the court’s legal jurisdiction. The High Court allowed the appeal, acquitted the appellants, and set aside the trial court's order and the proceedings. However, the court clarified that new proceedings could be initiated if future acts fall within the scope of sections 192/192-A after the May 2016 notification. -----Citations/Precedents: Muhammad Rafiq vs. DG FIA, Islamabad (2023 P.Cr.L.J [Islamabad] 38) Govind Ram vs. Federation of Pakistan (2022 PTD [Karachi] 634) Collector of Central Excise vs. New Tobacco Co. (AIR 1998 [SC] 668) Common Cause vs. Union of India and others (AIR 2003 [SC] 4493) Mirza Ali Khan vs. Hidayat Ullah Khan (2014 P.Cr.L.J 78) District Bar Association Rawalpindi vs. Federation of Pakistan (PLD 2015 [SC] 401) Munir Ahmed vs. State (1985 SCMR 257) Surajmani Stella Kujur vs. Durga Charan Hansdah (AIR 2001 [SC] 938) Iqbal Singh Marwah vs. Meenakshi Marwah (AIR 2005 [SC] 2119)

Summary: Held that the powers blessed upon members of FIA under section 5 (5) of the Act of 1974 are not unfettered, rather are subject to certain restrictions and limitations, required to be used sparingly and in cases of exceptional nature. Mere possession of local money is not a crime until and unless the same is proved to be derived from any illegal means and without the commission of a predicate offence there could be no offence of money laundering. The provisions of section 14 (2) of the Anti-Money Laundering Act, 2010 requires a mandatory prior permission from the Court before passing the seizure of the bank accounts. Under section 25 of the AMLA, 2010 the reporting entities are only required to provide assistance to the Investigating Officer if such assistance is reasonably required and the investigation is carried out in accordance with the provisions of AMLA, 2010, whereas, this provision neither empowers FIA to order qua seizure of accounts nor does it mandate or require the reporting entities to take any adverse action against the individuals without due course of law. It is not requirement of Sec. 35 that the new licensee has to first complete all its entire marketing infrastructure before having licence for undertaking marketing of petroleum product/refined establish retail outlets and filling stations during the initial license period which are a part and parcel of the work programme as the said provision of law no-where places any embargo that the licensee cannot operate retail outlets or its storages during the initial license term of three years.

Summary: Background: The petitioners challenged the actions of the Directorate of Intelligence and Investigation, Inland Revenue (Directorate I&I) under the Anti-Money Laundering Act, 2010. The Directorate initiated proceedings against the petitioners, including issuing call-up notices and registering First Information Reports (FIRs). The petitioners sought to quash these actions, arguing that the notifications, powers, and procedures used were unlawful and lacked the required legal authority. -----Issues: 1- Was the issuance of notifications by the Directorate I&I in violation of legal precedents, including Mustafa Impex’s case? -----2- Does the Directorate I&I have the authority to conduct investigations into past transactions before its inclusion in the Anti-Money Laundering Act? -----3- Can the Directorate I&I issue FIRs under the Act? -----4- Is it mandatory for the Directorate I&I to specify precise allegations in call-up notices? -----5- Can proceedings under the Act commence without prior conviction of the predicate offense? -----6- Does the Act require framing of specific rules before the Directorate I&I can act? -----7- Can the Act apply retroactively to transactions that occurred before amendments were made to the law? -----Holding/Reasoning/Outcome: The Court held that the notifications issued by the Directorate were lawful, as the Mustafa Impex case does not apply retrospectively to notifications issued before the decision. The Directorate I&I has the authority to investigate past transactions even before the amendments because the procedural laws governing investigations allow this. FIR Issuance: The Directorate I&I is empowered to issue FIRs under the Anti-Money Laundering Act, and the "complaint" referenced in the Act is analogous to the report filed under section 173 of the Criminal Procedure Code. Call-up Notices: Call-up notices must contain specific allegations against the accused. If they lack this information, they are invalid. However, investigations initiated can continue based on the evidence already collected. The Court ruled that a prior conviction of a predicate offense is not required to initiate proceedings under the Anti-Money Laundering Act. The absence of rules under the Anti-Money Laundering Act does not invalidate the actions taken by the Directorate I&I, as the Act itself provides sufficient procedural guidelines. The Act cannot be applied retroactively to transactions that occurred before the inclusion of certain offenses in the Schedule of the Act, as this would violate constitutional protections against retrospective punishments. ------Citations/Precedents: Mustafa Impex and others v. Federation of Pakistan (PLD 2016 SC 808) F.M. Textile Mills and others v. Federal Board of Revenue (2017 PTD 1875) Nestle Pakistan Limited and another v. The Federation of Pakistan (2021 PTD 521) Assistant Director Intelligence & Investigation v. M/s B.R. Herman (PLD 1992 SC 485) Commissioner Inland Revenue v. MCB Bank Limited (2021 SCMR 1325) Amanullah Khan v. The Federal Government of Pakistan (PLD 1990 SC 1092) Justice Qazi Faez Isa v. The President of Pakistan (PLD 2001 SC 1) Rafi Ullah v. The State (2019 P.Cr.LJ 1608) Pakistan Tobacco Co. Limited v. Karachi Municipal Corporation (PLD 1967 SC 241) Col. Shah Sadiq v. Muhammad Ashiq and others (2006 SCMR 276) The petitions without specific information in the call-up notices were allowed, while those questioning the validity of FIRs and the Directorate’s authority were dismissed.

Summary: Issue: The petitioners challenged the summons issued under Section 176(1)(b) of the Income Tax Ordinance, 2001, by the Deputy Director of Intelligence & Investigation (IR), arguing that such powers could not have been conferred upon the Deputy Director and questioning the vires of the SRO No.115(I)/2015 dated 9th February, 2015.Holding: The High Court disposed of the petitions, directing that the petitioners/assessee may respond to the impugned notices/summons with explanations and documents as required, and an opportunity for a hearing should be provided to reach a just and fair conclusion.Reasoning: The Court found that the Deputy Director was empowered to issue the summons under Section 176(1)(b) of the Income Tax Ordinance, 2001, by SRO No.115(I)/2015. The Court clarified that while the department could inquire about unexplained amounts and seek explanations, it was premature to consider such amounts as laundered money without satisfactory explanations from the assessees. The Court emphasized that non-declaration of an asset under the Ordinance is not a scheduled offence under the Anti-Money Laundering Act, 2010 (AMLA-2010), unless proven otherwise. The Court disagreed with the petitioners' counsel that the officers had no jurisdiction to issue notices/summons for explanations under Section 176(1)(b) of the Income Tax Ordinance.Legal Precedents Cited:The Court referred to a Supreme Court decision, PLD 2021 SC 1, to discuss the provisions under the Anti-Money Laundering Act, 2010, regarding the presumption of guilt for money laundering offenses and the procedure for investigating money laundering.Order: The High Court disposed of the petitions with directions for the petitioners to submit their replies to the impugned notices/summons and for the respondents/department to provide a hearing opportunity, aiming for a just and fair conclusion. --- ''[Anti-Money Laundering Act, 2010 (Section 9), Anti-Money Laundering Act, 2010 (Section 5), Anti-Money Laundering Act, 2010 (Section 3 ), Income Tax Ordinance, 2001 (Section 230)] The powers primarily were exercised under Section 176(1)(b) of Income Tax Ordinance, whereas investigation undertaken in terms of Section 9(1) of Anti-Money Laundering Act, 2010 by the investigating officer could commence, provided that the investigating officer acted, not later than seven days from the date of order of attachment made under sub-section (1) of section 8 or,seizure of property under section 14 or section 15, on service of a notice of thirty days on the person concerned which may also be an assessee, however, no such pre-qualification exists.We are therefore, of the view that unexplained amount which came in and went out of the account, could be inquired about and an explanation could be sought but until and unless an explanation is forwarded by the assesse to the dissatisfaction of the officer concerned, it is inconceivable at the said premature stage that it was laundered money which is defined under Anti-Money Laundering Act, 2010. Any amount which is not accounted or not considered astaxable amount not necessarily be the laundered money having meaning under AMLA-2010.''