LAHORE: The Federal Tax Ombudsman (FTO) has launched an inquiry into provincial excise and taxation departments and police for detaining and auctioning non-customs-duty-paid (NCP) vehicles under provincial laws instead of the Federal Customs Act, 1969.
In a suo motu action under Section 9(1) of the FTO Ordinance, 2000, the Ombudsman said such practices violate the Constitution and cause loss to federal revenue.
The investigation found that NCP and tampered vehicles were being seized under provincial rules — including those of Balochistan and Khyber Pakhtunkhwa — contrary to Article 143 of the Constitution, which gives precedence to federal law.
The FTO stated that the Customs Act, 1969 grants exclusive authority to Pakistan Customs to detain, seize, and auction non-duty-paid vehicles. Police are legally required to hand such vehicles over to Customs under Section 170, with any violation punishable under Section 156(1)(83).
Despite Supreme Court and Peshawar High Court rulings affirming Customs’ jurisdiction, provincial authorities continue to act independently, the report said, resulting in financial losses and jurisdictional conflict.
The Ombudsman directed the Revenue Division to ensure compliance with federal law and instructed the Federal Board of Revenue to approach the Law Division to restore Customs’ authority nationwide.
