2026 PLP 775 (SCMR)

AQEEL AHMED ABBASI, J.

Instant Criminal Petition for Leave to Appeal has been filed against the order dated 12.01.2026 passed by the learned Single Judge of the High Court of Sindh at Karachi in Special Criminal Appeal No.01 of 2026 on the grounds that the learned Judge of the High Court has failed to exercise the jurisdiction vested in it while declining to grant ad-interim relief seeking suspension of an order of attachment of properties of the petitioners passed by the learned Special Judge (Customs, Taxation and Anti-Smuggling-I), Karachi (the Special Judge ) on 24.12.2025 while invoking the provisions of section 8 of the Anti-Money Laundering Act, 2010 (the Act of 2010 ).

2. It has been contended by learned counsel for the petitioners that in the absence of any proceedings pending against the petitioners pertaining to income tax and sales tax liability, or issuance of any notice alleging any tax fraud or evasion and further without determination of tax liability through process of assessment provided under the Sales Tax Act, 1990 (the Act of 1990 ) and Income Tax Ordinance, 2001 (the Ordinance ) respectively, the proceedings under the Act of 2010 have been initiated against the petitioners by approaching before the Court of Special Judge for attachment of properties, vehicles and bank accounts of the petitioners under section 8 of the Act of 2010. Learned counsel for the petitioners submits that an FIR No.6 of 2025 dated 24.12.2025 has also been registered under section 21 read with sections 3,4,8,20,22 and Section XII A and VII A of Schedule-1 to the Act of 2010, wherein it has been alleged that during Tax Year 2022 to Tax Year 2024, the petitioners have evaded tax amounting Rs.598.447 Million, which constitutes predicate offense as defined in section 2( XXVI) of the Act of 2010. According to learned counsel for the petitioners, the registration of FIR and the order for attachment passed by the Special Judge dated 24.12.2025 in the absence of any proceedings pending against the petitioners, issuance of any Notice or determination of tax liability through process of assessment, besides being arbitrary, blatantly illegal and violative of Principles of Natural Justice, are also in total disregard of the judgment of this Court rendered in the case of Directorate of Intelligence and Investigation-FBR, through its Director and others v. Taj International (Pvt) Ltd and others (PLD 2025 SC 633) wherein it has been categorically held that in the absence of determination of tax liability of a tax payer in accordance of law, or without issuance of show cause notice or providing opportunity to explain the matter, the registration of FIR, initiation of criminal proceedings and arrest of a registered person is without jurisdiction and lawful authority. It has been further contended by the learned counsel that the order of attachment under purported exercise of the section 8 of the Act was passed unilaterally without providing an opportunity of being heard to the petitioners, whereby, all the properties including the bank accounts have been attached and the entire business activity of the petitioners has come to an halt, therefore, the Hon ble Single Judge of the High Court should have exercised the lawful jurisdiction and inherent powers vested in the Court by suspending the order for attachment to prevent the abuse of process of law, however, instead of providing any relief, merely notices were issued to the Special Prosecutor for a date to be fixed after three weeks, whereas, in view of an office objection the petitioners have been directed to assist as to how the appeal is maintainable under section 23 of the Act, however, without assigning any reason for such objection as to maintainability of the appeal. It has been prayed that serious prejudice has been caused to the petitioners in view of the order of the attachment dated 24.12.2025 passed by the Special Judge as well as the impugned order dated 12.01.2026 passed by the learned Single Judge of the High Court of Sindh at Karachi and the order of attachment of the properties of the petitioners including bank accounts may be set aside.

3. Conversely, learned counsel for the respondents and the learned DAG have raised an objection as to the maintainability of instant criminal petition for leave to appeal which according to the learned counsel for the respondents has been filed against an interim order of the High Court, whereas, the Hon ble Single Judge of the High Court of Sindh at Karachi has not passed any final order which could be assailed before this Court under Article 185(3) of the Constitution. It has been further contended that since the order of attachment is a provisional order, therefore, the appeal before the High Court is not maintainable in terms of section 23 of the Act of 2010. Learned counsel for the respondents has further argued that the provisions of Anti-Money Laundering Act, 2010 are independent in nature whereas an FIR has been registered against the petitioners for tax fraud and evasion of tax, therefore, the petitioners instead of approaching the High Court or before this Court should have defended their case before the relevant forum in accordance with law. Learned counsel for the respondents also attempted to explain the departmental procedure for seeking order of attachment from the Court of Special Judge under section 8 of the Act of 2010 and submitted that the required procedure has been followed, therefore, the order of attachment does not suffer from any illegality. According to learned counsel for the respondents, instant criminal petition for leave to appeal is not maintainable and liable to be dismissed, therefore, the matter may be remanded to the High Court to decide the appeal in accordance with law.

4. While responding to an objection raised by learned counsel for the respondents and DAG as to maintainability of instant criminal petition for leave to appeal against an ad-interim order passed by the High Court, learned counsel for the petitioners submits that since the order of the attachment passed by the Special Judge and the impugned order passed by the Hon ble Single Judge of the High Court whereby, the Hon ble Single Judge has failed to exercise the lawful jurisdiction and inherent powers vested in the Court to prevent the abuse of process of law and to do complete justice by suspending the blatantly illegal order of attachment, this Court has the powers to grant relief to the petitioners while exercising discretion under Article 185(3) read with Article 187 of the Constitution of Islamic Republic of Pakistan, 1973 (the Constitution ).

5. We have heard learned counsel for the parties and have perused the available record. The record shows that an FIR No.6 of 2025 dated 24.12.2025 under section 21 read with sections 3,4,8,20,22 and Section XIIA and VIIA of Schedule-1 to the Act of 2010 has been registered against the petitioners wherein, it has been alleged that during Tax Year 2022 to Tax Year 2024, the petitioners have evaded an amount of Rs.598.447 Million towards proposed liability of Sales Tax and Income Tax which as per contents of FIR, constitutes predicate offense as defined in section 2( XXVI) of the Act of 2010. It is pertinent to note that while lodging the aforesaid FIR neither any proceedings under the Act of 1990 and the Ordinance are pending against the petitioners for Tax Year 2022 to 2024 nor any Show Cause Notice(s) has been issued by the tax authorities confronting the petitioners with the alleged tax fraud or evasion of tax as detailed in the FIR referred to above. Similarly, no tax liability whatsoever has been determined through process of adjudication or assessment under the Act of 1990 and the Ordinance respectively. It has not been disputed by the learned counsel representing the respondents that neither any Show Cause Notice has been issued nor any opportunity of being heard has been provided to the petitioners before initiating the criminal proceedings in the shape of registration of FIR on the allegation of tax fraud and evasion of tax liability. Similarly, no opportunity has been provided before obtaining an order of attachment of properties of the petitioners under section 8 of the Act of 2010. From perusal of the application filed under section 8 of the Act of 2010 before the Special Judge (Customs, Taxation, Anti-smuggling-I), Karachi reference has been made to the allegations as contained in FIR No.6/2025 dated 24.12.2025 which seems to be the basis of invoking the provisions of the Act of 2010, including attachment of properties of the petitioners, whereas, the order of attachment of immovable properties, vehicles and bank accounts of the petitioners has been made as prayed in the application filed by the Directorate of Intelligence and Investigation-IR, Karachi. There seems no other material whatsoever available on the record to show that proceedings under the Act of 2010 have been invoked independently except reference to the alleged tax evasion as detailed in the FIR registered by the Tax Authorities. Under the facts and circumstances of the instant case, it can be safely concluded that criminal proceedings have been initiated against the petitioners without determination of tax liability through process of adjudication and assessment of tax under the Act of 1990 and the Ordinance, which act, besides being violative of the Constitutional guarantee as per Article 10A of the Constitution and Principles of Natural Justice, as no opportunity of being heard has been provided to the petitioners while resorting to initiation of criminal proceedings in the shape of registration of FIR and attachment of properties of the petitioners, is also in total disregard of the explicit judgment of this Court rendered in the case of Taj International (supra) wherein it has been held as under:-

20. In variably, imposition of any tax either direct or indirect, including Saltex Tax, is regarded as a civil liability to be recovered from the taxpayer, not only to collect tax but also to regulate the economy and to facilitate the business activity, however, in order to ensure tax compliance and the recovery of the amount of tax due, the penal provisions including imposition of surcharge and penalty are also incorporated in the taxing statutes. However, before invoking such provisions or adopting coercive measures for the recovery of the amount of tax due, the determination of tax liability through process of assessment or adjudication has to precede before initiating criminal proceedings, which otherwise depend upon willful default, mens-rea and commission of an offence of tax fraud with an intent to cause loss of tax involved or due. Admittedly in all aforesaid cases, without determination of sales tax liability and the amount of tax allegedly evaded or short paid, through process of assessment/adjudication, recourse to initiation of criminal proceedings on the allegation of tax fraud, including registration of FIR and arrest of a registered person or any person within the supply chain, amounts to, preempting the assessment of tax liability, whereas, in the absence of lawful demand of sales tax pursuant to Assessment of tax due, the penal provisions including Section 33 read with Section 37A and 37B cannot be invoked. Therefore, the penal provisions including registration of FIR and arrest of any person on the above allegations is without jurisdiction and lawful authority. It is settled principle of interpretation of taxing statute that any provision of statute cannot be read in isolation, particularly, when it is dependent upon or complimentary to other provision of the law. In case of any ambiguity or overlapping of the provisions of law, harmonious construction is to be made, so that such provision of law may not render the other provisions as redundant or nugatory

7. While confronted with hereinabove factual and legal aspects of the instant case, learned counsel for the respondents could not dispute the same, however, submitted that proceedings initiated under the Act of 2010 are independent to the proceedings under the tax laws whereas the order of attachment under section 8 of the Act of 2010 is provisional in nature, therefore, the petitioners cannot assail the same by filing an appeal under section 23 of the Act which can be filed against the final decision. Such contention of the learned counsel for the respondents is misconceived as the order passed under section 8 of the Act of 2010 by itself is not an interim order, however, the words provisionally attach relates to the period not exceeding 180 days, which period is subject to further enhancement by the Court for a period upto 180 days. The order of attachment under section 8 of the Act of 2010 is otherwise final for the taxpayer whose all immovable and moveable properties, including bank accounts are attached without providing any opportunity of being heard, in consequence whereof, the entire business of the petitioners has come to an halt, whereas no other remedy whatsoever is provided under the Act of 2010 except to challenge the same by filing an appeal under section 23 of the Act of 2010 wherein it has been provided that any person aggrieved by final decision or order of the Court may prefer an appeal to the High Court within sixty days from the date of communication of the decision or order on any question of law or fact arising out of such decision or order . The hereinabove provisions of law indicates that the legislature has used the word final with the decision whereas such word has not been used with the order of the Court which prima facie shows that there is no distinction of interim order or final order for the purposes of filing an appeal under section 23 of the Act of 2010. As regards the objection raised by the learned counsel for the respondents as to the maintainability of the instant criminal petition for leave to appeal, we are of the opinion that in exceptional circumstances involving flagrant violation of law, wrongful exercise of jurisdiction or manifest grave injustice an aggrieved party can approach this Court in terms of Article 185(3) of the Constitution with the request to set aside even an interim order falling within the category of aforementioned exceptions. Reference in this regard can be placed on the cases of Khawaja Adnan Zafar v. Hina Bashir and others (2024 SCMR 1295, Attiq ur Rehman v. Sh. Tahir Mehmood and others (2023 SCMR 501), Federation of Pakistan through Secretary, Ministry of Energy (Power Division), Islamabad and others v. Shafiq ul Hassan and others (2020 SCMR 2119) and Islamic Republic of Pakistan through Secretary, Establishment Division, Islamabad and others v. Muhammad Zaman Khan and others (1997 SCMR 1508). In the case of Muhammad Zaman Khan (supra), this Court has elaborately dealt with the issue of maintainability of civil petition for leave to appeal under Article 185(3) of the Constitution in the following terms:-

8. However, we may point out that there is a marked distinction between a right of appeal provided under clause (2) of Article 185 of the Constitution and a petition for leave to appeal under clause (3) of the said Article. A party is entitled to file an appeal if his case is covered by clause (2) of Article 185 of the Constitution in the matters provided in sub-clauses (a) to (f) thereof as a matter of right; whereas under clause (3) of Article 185, there is no such right vested in a party to file a petition for leave. This Court has the discretion to grant or to refuse leave according to the merits of the case concerned. No doubt the above discretion is to be exercised justly and fairly in consonance with the basic norms of justice. In the instant case, petitions have been filed under clause (3) of Article 185 of the Constitution, which does not provide that a petition for leave can be filed against a final order and not against an interlocutory order. In the aforesaid clause the words employed are an appeal to the Supreme Court from a judgment, decree, order or sentence of a High Court in a case to which clause (2) does not apply shall lie only if the Supreme Court grants leave to appeal . The word employed in the aforementioned clause is order and not the words final order . The former encompasses an interlocutory as well as final order. The framers of the Constitution have deliberately used two different phraseologies in the aforestated two clauses, namely, final order and order . It may also be pointed out that a petition for leave to appeal will lie under clause (3) of Article 185 of the Constitution only in those cases which are not covered by clause (2) of the above Article. Additionally, use of the words only if the Supreme Court grants leave to appeal indicates that a party has no vested right to file appeal in respect of cases falling under above clause and that the Supreme Court has discretion to grant leave or not to grant leave depending on the facts and circumstances of each case. (emphasis provided)

8. In the instant matter, when the petitioners approached the learned Single Judge of the High Court of Sindh at Karachi, pointing out flagrant violation of law by the Special Judge (Customs, Taxation, Anti-smuggling-I) Karachi while passing an ex-parte order of attachment of properties in purported exercise of section 8 of the Act of 2010, have also prayed for suspension of the order dated 24.12.2025 through an application filed under section 561-A Cr.P.C. However, instead of passing any order on such application or granting an ad-interim relief to the petitioners, warranted under the facts and circumstances of the instant case, mere Notice has been issued to the Special Prosecutor for a date to be fixed after three weeks. No reason whatsoever has been recorded to decline such ad-interim relief which has left the petitioners remediless as no order whatsoever has been passed which could have been assailed in the normal course of proceedings. Exercise of discretion to grant ad-interim relief or to withhold the same on the date of hearing has to be justified while assigning cogent reasons in order to maintain equilibrium among the litigant parties. Looking at the peculiar facts and circumstances of instant case, withholding of interim relief to the petitioners amounts to perpetuate an illegal act of attachment of all the immovable and moveable properties including bank accounts resulting in total halt to the business activity of a taxpayer without lawful justification. Learned counsel for the petitioners has informed this Court through C.M.A. No.398/2026 that pursuant to the impugned order passed by the High Court the matter was again fixed in Court on 03.02.2026 when no one showed appearance on behalf of the respondents, however, the learned Judge of High Court instead of passing an order on said application has passed an order in the following terms:- Repeat notice to the Special Prosecutor for 24.02.2026 .

9. In view of herein above facts and circumstances of the case, we are of the view that instant case falls within the exceptions as enumerated hereinabove to exercise discretion under Article 185(3) of the Constitution to obliviate miscarriage of justice. Accordingly, this petition is converted into appeal and the same is allowed along with C.M.A. No.68/2026 in the above terms. Resultantly, the operation of the order of attachment of properties of the petitioners dated 24.12.2025 passed by the Special Judge (Customs, Taxation, Anti-smuggling-I), Karachi shall remain suspended till final decision of Special Criminal Appeal No.01/2026 pending before the learned Single Judge of the High Court of Sindh at Karachi. MH/A-7/SC Appeal allowed.