The Supreme Court (SC) has ruled that initiating criminal cases and making arrests of taxpayers without first determining their sales tax liabilities is unlawful.
According to media reports, a three-member bench of the apex court, consisting of Justice Shahid Waheed, Justice Irfan Saadat Khan, and Justice Aqeel Abbasi, issued a detailed judgment in the case, stating that criminal proceedings cannot begin until tax liability is determined and the right to appeal is granted.
The court emphasised that making arrests without a hearing or civil proceedings violates the Constitution, and initiating criminal cases at the preliminary stage is unjust.
It also noted that filing direct cases of tax evasion constitutes an abuse of authority, and it is essential to establish tax liability under the law before prosecution can begin.
The court clarified that the Directorate of Intelligence may gather information but does not have the authority to prosecute, and investigations can only start once the tax department confirms a tax liability.
The ruling also specified that before any criminal action is taken against a defaulter, an order must be served, and the right to appeal and a final decision must be ensured.
The court concluded that arrests made based on mere notices or preliminary inquiries violate constitutional rights.
The court declared the criminal jurisdiction of the FBR’s Directorate of Intelligence ineffective, upheld relevant high court decisions, and dismissed all appeals, nullifying all related cases, arrests, and trials.
