The Sindh High Court (SHC) ordered the de-sealing of outlets of the Western clothing brand Sowears, halting the Federal Board of Revenue’s (FBR) earlier move to seal the premises over an alleged Rs200 million shortfall in sales tax.
Sowears’ lawyer, Mirza Moiz Baig, argued before the court that sealing of premises is only permissible after a formal determination of a taxpayer’s liability. He highlighted procedural irregularities in the FBR’s actions, noting that the sealing orders were issued without prior showcause notices, and by a commissioner rather than the chief commissioner as mandated by law.
He further contended that if the taxpayer has discharged the tax liability, sealing is unjustified, and since the FBR had not completed adjudication of Sowears’ tax dues, the sealing was premature and violated due process.
Drawing on a similar case involving another clothing brand Nomi Ansari, Baig presented these arguments, leading the court to suspend the FBR’s sealing orders.
The court allowed Sowears to resume operations on the condition that the company deposit Rs500,000 as security with the court’s Nazir until the petition’s final disposal.
This development follows the FBR’s sealing of Sowears’ offices and five major retail outlets in Karachi—including Lucky One Mall, Dolmen Mall, Ocean Mall, Hyderi Market, and Saima Mall—after a probe uncovered tax evasion.
The tax body said that Sowears had failed to integrate its Point of Sale (PoS) with the FBR’s network, enabling the company to conceal taxable income and evade payments.
Further inquiries uncovered undeclared international business activities in the UAE and the USA conducted through courier services, which were not reported in the company’s income filings in Pakistan.
The high court has scheduled the next hearing in the case for May 20.
