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LHC Rules on Search Warrants for Corporate Taxpayers

“Discover the Lahore High Court’s recent ruling: Businesses without pending sales tax cases are exempt from Federal Revenue Board’s search warrants. Get the details on this legal development now.”

LHC Rules on Search Warrants for Corporate Taxpayers

The Lahore High Court (LHC) has said that the Federal Board of Revenue (FBR) cannot give search warrants to businesses for tax issues if there are no ongoing sales tax cases against them. The LHC made this decision in response to a petition (No. 80210/2022) where similar legal and factual questions were raised.

The court handled two petitions where private companies argued that they had no pending cases against them, yet search warrants were issued under section 40 of the Sales Tax Act, of 1990. The companies believed that such orders should not be made without ongoing proceedings.

The LHC stated that the companies had a valid point, and when the tax department promised to cancel the search warrants and return any documents obtained, there was no need for further discussion. The court resolved the petitions in favor of the companies.

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The tax department had agreed to withdraw the search warrants under section 40 of the Act and return any documents collected. However, they wanted to keep other records obtained under section 38 of the Act or submitted voluntarily by the companies. The companies argued that no documents were obtained except under section 40 of the Act.

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