ISLAMABAD: A division bench of the Lahore High Court has set aside the judgment of the single bench and restored the powers of Directorate General Intelligence & Investigation of Inland Revenue.
The division bench, comprising of Justice Abid Aziz Sheikh and Justice Faisal Zaman, set aside the judgment on the ground that without the issuance of mandatory notice to the office of Attorney General of Pakistan, the impugned judgment is a nullity in the eyes of law.
The power was originally extended to the Directorate General Intelligence & Investigation (DG I&I) of Inland Revenue through a Statutory Regulatory Order 611 in September 2016, which was struck down by the Single bench of LHC in January on the plea that it was issued by a federal ministry without the express approval of the federal cabinet.
After judgment, the federal government has also restored the powers of Directorate General Intelligence & Investigation-IR to initiate proceedings against the people who had possibly laundered tax-evaded money under the Anti-Money Laundering Act (AMLA) 2010.
It was alleged that SRO611 of 2016 has been issued without the due approval of the federal cabinet. Consequently, the impugned notification was declared as ‘ultra vires and unlawful’.
The Directorate General I&I challenged the order of the single bench through intra-court appeals.
In the wake of this decision, a tax official of the Federal Board of Revenue (FBR) said, the proceedings against 270 influential people accused of laundering tax-evaded money have been revived. “We have re-launched our proceedings against these people under the AML act,” the official said.
These influential individuals were flagged by the State Bank’s Financial Monitoring Unit for possible money laundering in certain transactions, and their cases were forwarded to the DG I&I for investigation.
In the past 18 months, the DG I&I has recovered Rs10 billion under the AMLA 2010 against tax-evaded money.
The provisions of AMLA 2010 have significantly increased the powers of the tax authorities compared to the older legislation. If in case the individual denies any criminal liability, proceedings are launched against him or her. The law allows the confiscation of property as well as the lodging of FIR against any individual refusing to pay the tax due.
