Islamabad, June 21, 2025: In a landmark decision, the Supreme Court of Pakistan has ruled that the Federal Board of Revenue (FBR) cannot initiate criminal proceedings—including arrest or detention—against taxpayers in sales tax cases without first completing civil adjudication.
The verdict, authored by Justice Aqeel Ahmad Abbasi, affirms that tax liability must be determined through lawful assessment procedures before any criminal action can be taken.
The Court emphasized that criminal prosecution must follow, not precede, an investigative audit, issuance of a show cause notice, and the opportunity for the taxpayer to respond. The registration of FIRs and arrests without these procedural steps were declared as acts done “without jurisdiction and lawful authority.”
“All pre-trial measures such as arrest and detention shall remain ineffective unless the tax under Section 11 of the Sales Tax Act is duly assessed,” the judgment stated. The Court upheld previous high court rulings that favored taxpayers and dismissed all appeals filed by the FBR, allowing parties two weeks to file their written submissions.
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This decision marks a major shift in the legal protection of registered persons, reinforcing due process and shielding taxpayers from premature criminal action by the tax authorities.
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