FBR welcomes LHC ruling on money laundering cases

ISLAMABAD, Sep 27 (APP): The Federal Board of Revenue (FBR) on Sunday welcomed a Lahore High Court (LHC) ruling that money laundering cases could proceed independently without waiting for the conclusion of related tax cases.

“The LHC has ruled that money laundering is a separate crime in its own right. FBR does not have to wait for a person’s income tax case to be fully decided before it starts a money laundering investigation”, said a news release.

A two-member LHC bench comprising Justice Khalid Ishaq and Justice Hassan Nawaz Makhdoom gave the judgment in Writ Petition No. 2928 of 2026 and related cases, dismissing petitions challenging the powers and actions of the FBR’s Directorate General of Intelligence & Investigation, Inland Revenue (I&I-IR).

According to the FBR, the court said that the I&I-IR had full legal authority under the Anti-Money Laundering Act, 2010, to register cases, conduct investigations and prosecute under the law.

The court further clarified that money laundering proceedings and tax proceedings were separate matters and that one did not have to await the conclusion of the other.

The judgment also held that a person could be prosecuted for money laundering even if there has been no earlier conviction for the crime that produced the money.

The Anti-Money Laundering Act is a special law that takes priority over general laws and ongoing tax disputes cannot be used to stop or delay it, the FBR said.

The court also observed that the Supreme Court’s decision in the Taj International case related to sales tax assessment and recovery and could not be used to block money laundering proceedings.

The FBR said the court further recognized that where banks reported suspicious transactions to the Financial Monitoring Unit (FMU) and action follows, this happens within the law and with proper safeguards.

It said the LHC also held that a writ petition could not normally be used to stop a criminal investigation in advance, while questions concerning the source and movement of funds would be decided by the relevant Special Courts.

The FBR said the judgment provided important legal clarity and strengthened the legal framework for combating money laundering and financial crime.

It added that the ruling did not affect taxpayers who lawfully declared their income and paid applicable taxes, while emphasizing that all enforcement action would remain subject to due process and the rule of law.

FBR welcomed the judgment, saying it brings legal clarity and strengthens the fight against money laundering and financial crime.

The case was pursued under the guidance of Aqeel Ahmed Siddiqui, Director General (I&I-IR), it added.