The Peshawar High Court (PHC) has ordered the Federal Board of Revenue (FBR) to de-seal 26 cigarette factories across Khyber Pakhtunkhwa that were recently shut down for failing to install CCTV cameras in line with a directive issued last month. According to a report by Dawn news.
A bench comprising Justice Wiqar Ahmad and Justice Mohammad Ijaz Khan issued notices to the FBR chairman, the chief commissioner, and the commissioner (inland revenue) at the regional tax office, seeking replies within two weeks on identical petitions filed by four local manufacturers. The next hearing has been fixed for September 11.
In its interim order, the bench declared: “The factories sealed due to non-compliance of impugned letter dated 18.08.2025 (impugned herein) shall be de-sealed and no further adverse action shall be taken against the petitioner[s] on the basis of non-compliance of the impugned letter mentioned above.”
The petitions were filed by Universal Tobacco Company and three other manufacturers, challenging the August 18 letter issued by the FBR’s project director for its tracking and tracing system. The letter directed all green leaf threshing units to install IP CCTV cameras by August 25, provide FBR access to their live feeds, and comply with specifications for camera placement across production lines.
The petitioners argued that the order was “discriminatory and not sustainable in the eyes of the law” since multinational cigarette companies were not subjected to the same requirement. Their counsel, Isaac Ali Qazi, maintained that the sealing of 26 factories immediately after the deadline rendered a vast number of workers jobless.
Qazi told the court that manufacturers in the province were already facing strict enforcement measures, including deployment of Inland Revenue officers under Section 40-B of the Sales Tax Act, and electronic surveillance under Section 40-C. He added that the industry had already borne “substantial costs” in installing the tracking and tracing system (TTS) mandated under amendments made in 2019 to Chapter XIV-B of the Sales Tax Rules, 2006.
The lawyer explained that his clients had fully implemented the TTS and linked it with the FBR-licensed operator on November 2, 2023, covering production, import, and supply chain monitoring of tobacco products, beverages, sugar, fertilizer, and cement. He said these measures were already complemented by round-the-clock monitoring from FBR field staff posted at the Peshawar regional tax office.
The petitioners requested the court to set aside the August 18 directive, declare subsequent enforcement actions illegal, and prevent further punitive measures against locally owned cigarette manufacturers.
