KHURSHEED & SONS vs FEDERATION OF PAKISTAN, ISLAMABAD Ss — 2026 PTD 185 LAHORE-HIGH-COURT-LAHORE

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KHURSHEED & SONS VS FEDERATION OF PAKISTAN, ISLAMABAD Ss.38 & 40---access to business premises---Power to inspect stocks, accounts, and records---Permissibility of such exercise even in absence of pending adjudication---Whether proceedings under S. 38 can be undertaken without first invoking S. 40 of the act, 1990---Routine inspection---Coercive search and seizures---Distinct statutory domains---Obtaining a prior magistrate's warrant as condition precedent---Requirement---Proceedings under S. 38 can be undertaken without first invoking S. 40 of the act, 1990---Scope, nature, and purpose of the two provisions are distinct---Section 38 empowers the authorized officer to access business premises, registered offices, stocks, accounts, and records of registered persons or those liable for registration---This power is exercisable even when no adjudicatory or penal proceedings are pending, and is intended to verify declarations, ascertain factual positions, examine stock levels, and review records maintained under federal, provincial, or local laws---In contrast, S.40 contemplates search and seizure, but only where the officer has reason to believe that documents or things relevant to proceedings exist at a place, and then only after obtaining a magistrate's warrant---The two provisions thus operate independently: Section 38 allows routine inspections for verification and transparency, while S. 40 regulates coercive searches linked to pending or contemplated proceedings---Section 38 expressly authorizes Inland Revenue officers to access any business premises, manufacturing facility, registered office or any other place where stocks, business records or documents relevant under the act, 1990 are kept---The authority extends not only to registered persons but also to persons liable for registration, and further, to any person whose business activities may be required to be examined for any inquiry or investigation in any tax fraud committed by him, his agent or any other person---This wide yet purpose-linked statutory mandate enables revenue authorities to identify tax evasion, detect fraudulent input adjustments, uncover unreported supplies, and generally ensure that the flow of tax to the exchequer is not impeded through concealment or manipulation---However, under S. 38, the officer may access the premises, inspect records, and obtain material voluntarily produced or found in plain sight, but cannot compel production of concealed documents or seize property byforce.

KHURSHEED & SONS vs FEDERATION OF PAKISTAN, ISLAMABAD Ss — 2026 PTD 185 LAHORE-HIGH-COURT-LAHORE

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