ISLAMABAD, September 27 — The Lahore High Court has ruled that money laundering proceedings can be initiated independently of tax proceedings, allowing the Federal Board of Revenue’s intelligence and investigation wing to pursue such cases without waiting for the underlying tax dispute to be finally decided.
According to an FBR statement, a two-member bench comprising Justice Khalid Ishaq and Justice Hassan Nawaz Makhdoom issued the ruling in Writ Petition No. 2928 of 2026 and connected cases.
The petitions challenged the powers and actions of FBR’s Directorate General of Intelligence and Investigation, Inland Revenue (I&I-IR). The court dismissed the petitions, according to the revenue authority.
Money laundering and tax cases are separate proceedings
FBR said the court held that money laundering constitutes a separate offence under the Anti-Money Laundering Act, 2010, and proceedings under the law do not have to await the conclusion of income tax cases.
According to the statement, the court upheld the legal authority of I&I-IR to register cases, investigate allegations and pursue prosecutions under the anti-money laundering law.
The judgment also held that prosecution for money laundering does not require a prior conviction for the predicate offence from which the alleged proceeds were generated, FBR said.
The court further found that pending tax disputes could not, by themselves, be used to halt or delay proceedings under the Anti-Money Laundering Act.
LHC addresses suspicious transaction reports
According to FBR, the court also considered cases involving suspicious transaction reports submitted by banks to the Financial Monitoring Unit and held that subsequent action could proceed within the legal framework and prescribed safeguards.
The judgment further held that constitutional petitions before a high court ordinarily could not be used to pre-emptively stop criminal investigations, while factual questions concerning the source and movement of funds would be determined by the relevant special courts.
FBR said the court also distinguished the Supreme Court’s judgment in the Taj International case, maintaining that it concerned sales tax assessment and recovery and could not be relied upon to prevent money laundering proceedings.
FBR welcomes ruling
FBR welcomed the judgment, saying it provided greater legal clarity for investigations involving suspected money laundering and financial crime.
The revenue authority stressed that enforcement action would remain subject to due process and the rule of law.
According to FBR, the case was pursued under the guidance of Director General I&I-IR Aqeel Ahmed Siddiqui.