PAK HYGIENIC INDUSTRIES vs FEDERATION OF PAKISTAN Ss — 2025 PTD 1549 LAHORE-HIGH-COURT-LAHORE

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PAK HYGIENIC INDUSTRIES VS FEDERATION OF PAKISTAN Ss.40 & 40-a---Search warrant, access and seizure of business records by FBR---Legality and scope---as per the language employed in Ss. 40 & 40a of the act 1990, the requirement of law appears to be that where an officer of sales tax has reason to believe that any document or things, which in his opinion may be relevant to any proceedings under the act, are concealed or kept in any place and there is a danger of removal of such documents or records, he may, after obtaining warrant from Magistrate, enter that place and cause a search to be made at any time and the search authorized shall be carried out strictly in accordance with relevant provisions of the Code of Criminal Procedure, 1898. Citation Name: 2025 PTD 1549 LAHORE-HIGH-COURT-LAHOREBookmark this Case PAK HYGIENIC INDUSTRIES VS FEDERATION OF PAKISTAN Ss.38 & 40---Search warrant, access and seizure of business records by FBR---Legality and scope---Plain reading of S. 38(1) of the Act, 1990 shows that any officer, authorized by the Commissioner Inland Revenue, shall have free excess to the business or manufacturing premises, registered office or any other place where any stock, business record or documents required under this Act are kept or maintained belonging to the registered person or a person liable for registration or whose business activities are covered under this Act or who may be required for any inquiry or investigation in any tax fraud---Under S. 38 of the Act, 1990, an officer authorized may inspect and also take into custody the record mentioned therein, as he may deem fit, against a signed receipt---Purpose of visit, in terms of S. 38 of the Act, is to see whether proper record under the Act, relevant Rules and Regulations is maintained or not, and the authorized officer in this regard must produce the copy of authorization before commencing the inspection and visit must be confined to inspect the record and documents that are in plain sight or voluntarily made available for inspection by the persons present at the premises on request, and consequently only such record can be taken into custody within the meaning of S. 38 of the Act---Whereas under S. 40 of the Act, 1990, where any officer of Inland Revenue has reason to believe that any document or things which in his opinion, may be useful for, or relevant to any proceedings under this Act are kept in any place, he may, after obtaining warrant from Magistrate, enter that place or cause a search to be made at any time. Citation Name: 2025 PTD 1549 LAHORE-HIGH-COURT-LAHOREBookmark this Case PAK HYGIENIC INDUSTRIES VS FEDERATION OF PAKISTAN Ss.38 & 40---Raid, search warrant, access to and seizure of business records by FBR---Issuance of search warrant---Precondition of pending proceedings---Scope---The challenge in the present Constitutional petition concerned the legality of the raid, search, and seizure of the petitioner's business records conducted by Inland Revenue authorities under Ss. 38 & 40 of the Sales Tax Act, 1990---The main issue before the High Court was whether, in the absence of any pending proceedings under the Act, 1990, the authorities were justified in obtaining and executing a search warrant and taking custody of the petitioner's documents, or whether such action exceeded the lawful scope of powers conferred under the Act, 1990---Held: In the present case, admittedly the impugned order and the search warrant in question were issued in pursuance of the desk audit analysis highlighting concealment of sales but there were no proceedings pending under the Act, 1990 for which the documents could be useful or relevant, which was a precondition under S. 40 of the Act, 1990 for issuance of search warrant---When there were no proceedings pending under the Act, 1990, the provision of S. 40 of the Act for search could not be invoked---The desk audit analysis could at best be treated as inquiry or investigation but did not amount to proceedings under the Act, therefore, the provision of S. 40 of the Act could not be invoked in the impugned order or search warrant, therefore, to that extent the impugned order and search warrant were not sustainable---Indeed the respondents could neither invoke the provisions of S.40 of the Act nor they could compel production of any record or documents that were not in plain sight or had not been voluntarily made available, however, perusal of the copy of Resumption Memo (appended with reply), showed that same had been duly stamped by the petitioner, as required under S. 38(1) of the Act---Though the petitioner in the present petition had challenged the impugned order and impugned search warrant claiming that the respondent No.4 along with officials and policemen entered its business premises and took away the record but it was nowhere specifically pleaded that said record was not in plain sight or was forcibly taken into custody by respondents---On the other hand, the respondents in their reply though defended the impugned order and search warrant on legal plane yet nowhere stated that the record was made available voluntarily for inspection and taken into custody on request---This being a factual dispute could not be decided in the Constitutional petition, therefore, the respondents were directed to return the data and record as per Resumption Memo to the petitioner after retaining the duplicate copies thereof---Constitutional petition was partially allowed, in circumstances.

PAK HYGIENIC INDUSTRIES vs FEDERATION OF PAKISTAN Ss — 2025 PTD 1549 LAHORE-HIGH-COURT-LAHORE

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