SALEEM HUSSAIN Versus MUHAMMAD NADEEM

TARIQ SALEEM SHEIKH, J.--- This petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (the Constitution ), is directed against the order dated 15.05.2024 (the Impugned Order ) passed by the Judge, Special Court Central-I, Lahore.

Factual matrix

A. FIR No.01/2023 dated 19.05.2023

2. The Directorate of Intelligence and Investigation, Inland Revenue (I&I-IR), Karachi, registered FIR No.01/2023 dated 19.05.2023 through Abdul Jalil Khan, Assistant Director, regarding an alleged sales tax fraud committed during the period July 2022 to February 2023. 1 According to the FIR, Ghulam Umar, representing himself as the sole proprietor, registered M/s Z.A. Impex (ZAI) with the Federal Board of Revenue (the Board ) for income tax purposes under NTN 1498221-8 w.e.f. 01.01.2003, and for sales tax purposes under STRN 1750840006455 on 22.05.2007. He declared its principal business activity as manufacturing/ spinning, weaving and finishing of textiles, with registered office at Flat No. 2, Gulzar-e-Hijri, Sector 15-C, Karachi West. From July 2016 to June 2022, ZAI consistently filed NIL sales tax returns, indicating no taxable activity. However, starting July 2022, it abruptly declared substantial input tax credits Rs. 1.63 million, Rs. 115.79 million, and Rs. 408.99 million for July, August, and September 2022, respectively without corresponding purchases in previous periods. These anomalies suggested manipulation of the electronic filing system. A discreet verification of the registered premises revealed that the site was located in a residential area and was closed. Neighbours stated that it had been shut for over six months and that nobody knew about Ghulam Umar. ZAI s two declared bank accounts were also found to be suspicious. As a result, the Commissioner Inland Revenue, CTO Karachi, suspended its sales tax registration w.e.f. 12.05.2023. Subsequently, sales data obtained from PRAL revealed that ZAI had been filing false and bogus returns. It claimed inadmissible input tax and generated fictitious output tax in collusion with other registered entities in the supply chain, causing an estimated loss of Rs. 11.692 billion to the national exchequer.

3. Muhammad Junaid, Deputy Director, investigated the case and submitted a report in terms of section 173, Cr.P.C. in the Court of the Special Judge (Customs, Taxation and Anti-Smuggling), Karachi, placing five persons in Column No.3. Ghulam Umar reportedly died in 2017/2018. The Special Judge has taken cognizance of the offence.

B. Private complaint

4. On 27.03.2024, Respondent No.1, who claims to be a whistleblower, filed a private complaint before the Judge, Special Court (Central-I), Lahore, against the Petitioner and 14 others, accusing them of large-scale corruption, tax fraud, money laundering, and abuse of official authority which has caused a huge financial loss to the national exchequer. He particularly focused on ZAI, which, according to him, was a Faisalabad-based enterprise. He alleged that Ghulam Umar collaborated with the Petitioner and other accused in committing one of the biggest tax scams in the country s history.

5. Respondent No.1 claimed that Accused No.2, a senior officer of the Board, had formed a network of subordinate officials (Accused Nos. 1 and 3 to 11), many of whom had previously served under his command in Karachi. They facilitated fraudulent input tax adjustments, avoided tax recoveries, and settled statutory notices in exchange for bribes. Respondent No.1 asserted that Accused Nos. 2 to 11 issued around 423 notices under section 37 of the Sales Tax Act, 1990 (the STA ), to suppliers and beneficiaries in the supply chain and 40 other enterprises, and withdrew them without initiating recovery proceedings or a formal inquiry. Furthermore, the investigation into the scam was diverted to the Directorate of I&I-IR, Karachi, on the unlawful instructions of Accused No.2, even though the relevant taxpayer entities were outside its territorial jurisdiction.

6. Respondent No.1 further alleged that M/s Taj Industries (run by Accused No.15) alone had made inflated purchases worth Rs. 44.507 billion, involving input tax of Rs. 7.566 billion, from ZAI during the period July 2022 to June 2023. Despite the scale of these transactions and their direct linkage to the scam, the company s sales tax registration was not suspended until 28.11.2023, and blacklisting proceedings had yet to be concluded. He also claimed that Accused Nos. 4 and 5 deliberately omitted the names of Accused Nos. 12 to 15 from the challans and investigation record to protect them.

7. In support of these allegations, Respondent No.1 referred to a news report published in Daily Jiddat (Karachi edition, 11.01.2024) and a video uploaded by journalist Azmat Khan, which asserted that the acts of the Petitioner and other officers resulted in tax fraud amounting to Rs.11.692 billion and facilitated money laundering of Rs. 68.779 billion.

8. Respondent No.1 also alleged that Accused Nos. 1 to 11 were living well beyond their known sources of income. Their unexplained wealth corroborated the allegations of corruption, bribery, and misuse of official position. Respondent No.1 prayed that Accused Nos. 1 to 15 be summoned, their statements recorded, and that they be tried under sections 161, 409, 420, 467, 468, 471, and 109 of the Pakistan Penal Code, read with section 5(2) of the Prevention of Corruption Act, 1947 ( PCA ), and sections 3 and 4 of the Anti-Money Laundering Act, 2010 ( AMLA ). He also sought a direction for the evaluation of the assets of Accused Nos. 1 to 11, and prayed that they be punished in accordance with law.

The Impugned Order

9. The Judge, Special Court (Central-I), Lahore, recorded Respondent No.1 s cursory evidence and observed that the matter was required to be thoroughly investigated. Therefore, invoking section 202 Cr.P.C., he directed the Director, Federal Investigation Agency (FIA) to depute a person not below the rank of a Deputy Director to investigate it. Simultaneously, he issued notices to the Petitioner and his co-accused to appear and explain their position. This order is under challenge in these proceedings.

The submissions

10. Barrister Muhammad Umar Riaz submitted that the Petitioner is an officer of integrity with an unblemished career and enjoys an excellent reputation. At present, he is posted at I&I-IR Karachi as Deputy Director. He, along with other officers of the Directorate, had busted multiple organized gangs involved in tax evasion of billions of rupees. Barrister Riaz contended that the private complaint is mala fide and filed as a counterblast to FIR No.01/2023 in which ZAI and other major players in a nationwide tax fraud have already been challaned. According to him, Respondent No.1 is a proxy for those adversely affected by the investigation, and the complaint is a tool to defame and harass officers of I&I-IR.

11. Barrister Riaz contended that the Impugned Order passed by the Judge, Special Court (Central-I), Lahore, was without jurisdiction and legally flawed for five reasons. First, the court lacked territorial jurisdiction to entertain the private complaint. Second, the STA provides a comprehensive legal framework for prosecuting tax offences listed in section 33 of the Act. These offences are triable exclusively by the Special Judge (Customs, Taxation and Anti-Smuggling) notified under section 37C. 2 Third, Respondent No.1 s private complaint was not competent, as it was filed without obtaining the prior approval of the Board under section 51(3) of the STA, which is mandatory. Fourth, the allegations were vague and unsupported by any credible evidence. The complaint relied primarily on a newspaper article from Daily Jiddat and a vlog, neither of which constitutes admissible proof. Fifth, having invoked section 202(1), Cr.P.C. and directed the FIA to investigate the matter, the Judge ought to have awaited the outcome of that investigation before proceeding further. By issuing notices to the Petitioner and other co-accused at that stage, he acted prematurely and contrary to the scheme of section 202, Cr.P.C.

12. Barrister Riaz also responded to the specific allegations in the private complaint. He submitted that the notices issued under section 37 of the STA were lawfully addressed to entities that benefited from fake tax invoices generated by ZAI at various stages of the supply chain. Contrary to Respondent No.1 s claim of 423 notices, the actual number was 336. Investigations confirmed that many recipients were dummy concerns operated by fraudsters already arrested and challaned under FIR No.01/2023.

13. Regarding M/s Taj Industries, Barrister Riaz submitted that ZAI had initially shown sales to it and subsequently issued eight credit notes unlawfully providing it with fake input tax. M/s Taj Industries did not issue any corresponding debit notes or file sales tax returns during the relevant tax period. As for the credit note involving sales tax of Rs.211.328 million issued to M/s Bashir Impex for the tax period of December 2022, he asserted that no transaction was found to have taken place between ZAI and M/s Bashir Impex upon examination of sales tax returns. Consequently, no notice was issued to M/s Bashir Impex in that regard.

14. As for the purchases by Maria Bibi of M/s Aisha Impex during the same tax period, Barrister Riaz explained that a notice under section 37 of the Act, along with two reminders, had been issued to M/s Aisha Impex as the first-stage buyer from ZAI. The name of Maria Bibi was included in the second interim challan dated 23.08.2023. However, he clarified that no buyer at the first stage of the supply chain was nominated in the FIR as the entire scam was operated by the same four fraudsters who had already been arrested and challaned, and that the remaining perpetrators and beneficiaries would be nominated and sent to trial through subsequent challans. Barrister Riaz added that the competent authority suspended M/s Taj International s sales tax registration on 28.11.2023.

15. The counsel for Respondent No.1, Mr. Mushtaq Ahmad Mohal, Advocate, refuted Barrister Riaz s assertion that the Judge, Special Court (Central-I), Lahore, has no jurisdiction in the matter. He argued that FIR No.01/2023 and Respondent No.1 s private complaint have a different subject matter. The FIR pertains to ZAI scam, while the private complaint pertains to the offences committed by the Petitioner and his co-accused in investigating it, the manner in which they abused their official authority and exonerated the real culprits in exchange for a bribe, causing loss to the national exchequer. Therefore, the private complaint before the Judge, Special Court (Central-I), Lahore, was competent and he rightly entertained it. Counsel further contended that in addition to newspaper clips, Respondent No.1 produced documentary evidence before the Special Court, which persuaded it to pass the Impugned Order. He submitted that this petition is an attempt to short-circuit those proceedings, which must not be permitted. On factual aspects, Mr. Mohal reiterated the contents of the private complaint.

16. In rebuttal, Barrister Riaz submitted that the principal accused, ZAI, had notified Flat No.2, Gulzar-e-Hijri, Sector 15-C, Karachi West, as its principal place of business with the Board and was registered accordingly. It falls under the jurisdiction of CTO/I&I-IR Karachi. Therefore, in view of SRO No. 1302(1)/2018 dated 29.10.2018, the registration of FIR No. 01/2023 at Karachi was lawful.

17. The Deputy Attorney General, Mr. Asad Ali Bajwa, supported this petition.

Opinion

The legislative scheme

18. It is necessary to examine the scheme of the STA before addressing the contentions of the learned counsel. The STA consolidates and amends the law relating to the levy of a tax on the sale, importation, exportation, production, manufacture or consumption of goods. 3 It extends to the whole of Pakistan. 4 Section 30 of the Act provides a hierarchy of officers to be appointed by the Board. The officers so appointed are known as the officers of Inland Revenue (IR). The officers of IR may exercise all the powers provided under the STA in their respective jurisdictions, subject to any limitation imposed by the Board in terms of section 31 of the STA. Besides that, sections 30A to 30DDD provide for establishing various Directorates General, including the Directorate General (Intelligence and Investigation), Inland Revenue. Section 30E states that the Board may, by notification in the official Gazette, specify the functions, jurisdiction and powers of the Directorates General and their officers.

19. The Directorate of I&I-IR has been constituted under section 30A of the STA. The powers, functions, and jurisdiction of its officers have been prescribed through SRO No. 1301(I)/2018 dated 29.10.2018, issued by the Board in terms of section 30A(2) read with section 30E of the Act. The officers of the Directorate may perform their functions only within their assigned territorial jurisdiction. Multiple Directorates exist across Pakistan, each exercising authority within the area notified by the Board. The Directorate of I&I-IR is headed by the Director General, whose office is in Islamabad, and respective Directors head the Directorates in the Provinces. The functions of the officers of the Directorate of I&I-IR primarily include tracing, inquiring, investigating, and prosecuting cases of tax evasion.

20. The STA provides two kinds of proceedings against persons involved in tax evasion. One is a civil proceeding meant for the recovery of evaded tax, and the other is a criminal proceeding for penalizing perpetrators of intentional tax fraud and other offences specified in section 33 of the Act.

21. Section 51 of the STA grants various protections to the Federal Government and public servants performing functions under the Act. It reads as follows:

51. Bar of suits, prosecution and other legal proceedings . (1) No suit shall be brought in any Civil Court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act.

(2) No suit, prosecution or other legal proceeding shall lie against the Federal Government or against any public servant in respect of any order passed in good faith under this Act.

(3) Notwithstanding anything in any other law for the time being in force, no investigation or inquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions, or directions made or issued thereunder without the prior approval of the Board.

22. The phrase good faith used in section 51(2) is not defined in the STA but has an established legal meaning. Black s Law Dictionary defines it as a state of mind consisting of honesty in belief or purpose; faithfulness to one s duty or obligation; observance of reasonable commercial standards of fair dealing in a given trade or business; or absence of intent to defraud or to seek unconscionable advantage also termed bona fides . 5 The Online Legal Dictionary by Farlex says that it is an abstract and comprehensive term that encompasses a sincere belief or motive without any malice or the desire to defraud others. It derives from the translation of the Latin term bona fide . Courts use the two terms interchangeably. Section 3(20) of the General Clauses Act, 1897 states that things shall be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or not. Section 52, P.P.C. says that nothing is said to be done or believed in good faith which is done or believed without care and attention. In Brijendra Singh v. State of U.P. and others (AIR 1981 SC 636) the Supreme Court of India held that the expression [good faith] has several shades of meaning. In the popular sense, the phrase in good faith simply means honestly, without fraud, collusion, or deceit; really, actually, without pretence and without intent to assist or act in furtherance of a fraudulent or otherwise unlawful scheme. (See Words and Phrases, Permanent Edition, Vol. 18A, page 91). Although the meaning of good faith may vary in the context of different statutes, subjects, and situations, honest intent free from taint of fraud or fraudulent design is a constant element of its connotation. Even so, the quality and quantity of the honesty requisite for constituting good faith is conditioned by the context and object of the statute in which this term is employed. It is a cardinal canon of construction that an expression which has no uniform, precisely fixed meaning, takes its colour, light and content from the context.

23 Though not directly applicable, the jurisprudence under section 197, Cr.P.C. is instructive. The said provision stipulates that no court shall take cognizance of the offence committed by the judges and certain public servants while acting or purporting to act in discharge of their official duties except with the previous sanction of the Government. In Phanindra Chandra Neogy v. The King (PLD 1948 PC 273) , the Privy Council approvingly cited the following excerpt from Gill v. The King, [(1948) L.R. 75 1.A. 41], which explained the expression official duty :

A public servant can only be said to act or purport to act in the discharge of his official duty if the act is such as to lie within the scope of his official duty. Thus a Judge neither acts nor purports to act as a Judge in receiving a bribe, though the judgment which he delivers may be such an act : nor does a Government medical officer act or purport to act as a public servant in picking the pocket of a patient whom he is examining, though the examination itself may be such an act. The test may well be whether the public servant, if challenged, can reasonably claim that what he does, he does in virtue of his office.

24. In Syed Ahmad v. The State [PLD 1958 SC (Pak) 27], the Supreme Court of Pakistan approved and expanded the principle laid down by the Privy Council in Gill s case. It held that, for the application of section 197, Cr.P.C., a valid test is whether the act alleged against the public servant lies within the scope of his official duties and whether he can reasonably claim that what he did, he did in virtue of his office. Although an offence can never form part of an official s prescribed duties, the Court explained that the scope of such duties must, for the purposes of section 197, Cr.P.C., be interpreted more broadly than the exact acts the official is legally authorized to perform. The act must be reasonably connected with the discharge of official functions, such that a reasonable person might assume, the official could act in that manner while purporting to carry out his duties. This elaboration contextualized Gill s principle within the local legal framework and clarified that such protection may arise even where the act exceeds the official s express powers, provided the required nexus exists.

25. In Muhammad Abbas v. The State (PLD 1981 SC 642) , the Supreme Court further clarified that offences such as bribery, forgery, misappropriation, and breach of trust, when committed by a public servant, do not fall within the expression acting or purporting to act as a public servant. Accordingly, the protection of section 197 Cr.P.C. is not available in such cases.

26. While a public functionary must show (a) that the act was done in good faith, and (b) that it was done in the discharge of official functions, both are questions of fact that cannot be decided without recording evidence. In Iftikhar Hussain and others v. Government of Pakistan and others (2001 PCr.LJ 146) , a Division Bench of this Court held that the plea of good faith is in the nature of a defence that may be taken into consideration at the proper stage. In The Director General (Intelligence and Investigation Inland Revenue), Islamabad, and others v. The Additional Sessions Judge-IV, West Islamabad, and others (2021 PTD 1585) , the Islamabad High Court held that every citizen is entitled to due process and a fair trial. Consequently, when a citizen alleges that a public official has committed an offence causing legal injury, both the complainant and the official are entitled to have their respective rights and liabilities adjudicated according to the law. No public official can claim immunity from investigation or prosecution. In view of Article 10A of the Constitution, any such investigation or prosecution must be conducted in accordance with the procedure prescribed by law.

27. The above principles apply equally to the STA. Consequently, the protection under section 51(2) of the STA is not absolute. It applies only to acts done in good faith and within the scope of lawful authority conferred upon public official by the Act, rules, or departmental instructions. Where an act is tainted by mala fide , fraud, or colourable exercise of power, the cloak of good faith is not available.

28. While section 51(2) of the STA deals with immunity from prosecution for bona fide acts, section 51(3) regulates the initiation of inquiry or investigation. It prohibits any governmental agency from investigating acts done in an official capacity under the STA or related rules without the prior approval of the Board. Section 51(3) uses the word shall , which ordinarily indicates that the provision is mandatory. However, there are instances in which courts have construed the provisions containing this word as directory. 6 In Province of Punjab and others v. Javed Iqbal (2021 SCMR 328), the Supreme Court held that, in determining whether a provision is mandatory or directory, the court must ascertain the true intention of the legislature. This is to be gathered from the provision s phraseology, its nature and object, the consequences of construing it one way or the other, and the overall scheme of the statute. A provision is mandatory if non-compliance renders the related proceedings illegal or void; it is directory if substantial compliance is sufficient to preserve their validity. A key consideration is whether non-compliance causes inconvenience or injustice. The courts often apply three tests in this regard: (i) the scope and object of the enactment; (ii) considerations of justice and balance of convenience; and (iii) whether the provision relates to the performance of a public duty or the protection of an individual right. Provisions relating to public duties are generally considered directory, while those involving individual rights or privileges are treated as mandatory.

29. Section 51(3) of the STA aims to ensure that public officials discharging functions under the Act are not harassed through frivolous or motivated inquiries, and to allow tax administration to function without undue interference. It operates as a procedural filter and does not confer immunity. Viewed in this context, this Court is of the view that section 51(3) is mandatory. No valid investigation can be initiated against a public functionary for acts done in official capacity under the STA without obtaining the Board s prior approval. Non-compliance renders the inquiry or investigation legally defective and without jurisdiction.

30. A contrary argument may be advanced that, although section 51(3) of the STA is framed in mandatory language, it should be construed as directory to prevent abuse of office and to enable prompt oversight of mala fide conduct. However, such an interpretation would frustrate the legislative purpose. The requirement of prior approval does not shield wrongdoing; it only ensures that allegations arising from official acts are first scrutinized institutionally before triggering the criminal process. It thus balances the need for accountability with the imperative of protecting the lawful discharge of official functions. For these reasons, the requirement under section 51(3) must be treated as a jurisdictional condition, and its non-compliance renders the investigation a nullity in law.

The present case

31. Respondent No.1 s private complaint accuses the Petitioner and other officials of abusing their authority during that investigation, committing acts of bribery, and shielding certain beneficiaries from prosecution. His primary contention is that ZAI was a Faisalabad-based enterprise, and therefore, FIR No.01/2023 was wrongly registered at Karachi, and the Special Judge (Customs, Taxation and Anti-Smuggling), Karachi, has no jurisdiction. ZAI s proprietor, Ghulam Umar, may have hailed from Faisalabad, but the record shows that ZAI was registered with the Board for income tax w.e.f. 01.01.2003 under NTN 1498221-8, and for sales tax on 22.05.2007 under STRN 1750840006455. 7 Its declared principal place of business was Flat No. 2, Gulzar-e-Hijri, Sector 15-C, Karachi, which placed it squarely within the jurisdiction of the CTO, Karachi. During the investigation, it was found that ZAI had vacated that premises, but it continued to file electronic sales tax returns using the same STRN. Accordingly, the registration of FIR No.01/2023 at Karachi was lawful, and the case is being rightly tried there. Under section 179, Cr.P.C., an offence may be inquired into or tried by a court within whose territorial jurisdiction either the act or its consequence occurred. In this case, both elements are present in Karachi: the taxpayer s registered place of business was located there, and the loss to the exchequer arose from fraudulent filings made from that jurisdiction. Therefore, the Special Judge (Customs, Taxation and Anti-Smuggling), Karachi, has territorial jurisdiction over the matter, notwithstanding that some of the accused may have operated from other cities. Importantly, none of the accused who have been challaned has objected to the territorial jurisdiction of that Special Judge.

32. The next question is whether Respondent No.1 s private complaint before the Judge, Special Court (Central-I), Lahore, is competent. For this, it is necessary to examine the statutory framework under the Pakistan Criminal Law Amendment Act, 1958 (the Act of 1958 ). This enactment provides for the appointment of Special Judges to try the offences specified in the Schedule to the Act. 8 Section 3 prescribes the mode of appointment, while section 4 outlines their jurisdiction. Under section 4(1), a Special Judge has jurisdiction only within such territorial limits as may be fixed by the appropriate Government through notification in the official Gazette. He may take cognizance of an offence committed, or deemed to have been committed, within those limits upon a complaint or a written report by a police officer. Section 4(1) of the Act is reproduced below:

(1) A Special Judge shall have jurisdiction within such territorial limits as may be fixed by the appropriate Government by notification in the official Gazette and may take cognizance of any offence committed or deemed to have been committed within such limits and triable under this Act upon receiving a complaint of facts which constitute such offence or upon a report in writing of such facts made by any police officer.

33. The offences mentioned in the Schedule to the Act of 1958 are distinct from those listed in section 33 of the STA, which pertain specifically to the sales tax regime. Section 37E of the STA mandates that such offences are triable exclusively by the Special Judge (Customs, Taxation and Anti-Smuggling) appointed under section 37C. Therefore, where the alleged misconduct by Inland Revenue officers arises from or relates to the administration of the STA (for example, where they act, omit to act, or otherwise connive in a manner that causes loss to the sales tax revenue, as contemplated by section 33(18) of the STA), it falls squarely within the exclusive jurisdiction of the court designated under section 37C. While a Special Court constituted under the Act of 1958 may entertain a complaint relating to an offence enumerated in its Schedule, that jurisdiction cannot override the statutory exclusivity conferred by the STA for tax-related offences. Moreover, section 51(3) of the STA remains applicable: no proceedings can be undertaken for anything such officer does in his official capacity under the Act, rules, instructions, or directions made or issued thereunder without the Board s prior approval. In sum, jurisdiction under the Act of 1958 cannot be invoked to circumvent the specific procedural safeguards and jurisdictional scheme laid down under the STA.

34. The main allegation against the Petitioner and other officers of the Directorate General I&I-IR is that they misused their official authority during the investigation of FIR No. 01/2023 and facilitated tax evasion by ZAI and others. Such conduct, if established, may fall within the mischief of section 33(18) of the STA. However, as already discussed, offences under section 33 are triable exclusively by a Special Judge appointed under section 37C, and the Special Judge (Customs, Taxation and Anti-Smuggling), Karachi, has already taken cognizance in this case. Therefore, any grievance regarding the conduct of tax officials under the STA must be raised before that forum in accordance with section 37D(1)(b). The private complaint filed before the Special Court (Central-I), Lahore, is not competent to that extent.

35. Respondent No.1 has also alleged that the Petitioner and other officers are involved in corruption, bribery, and misuse of official position, possess assets beyond their known sources of income, or lead a lifestyle disproportionate to their means. Hence, they have committed criminal misconduct within the meaning of section 5(1) of the PCA, punishable under section 5(2) thereof. Section 4(1) of the Act of 1958 authorizes a Special Court to take cognizance of such scheduled offences upon receiving a complaint of facts constituting the offence or upon a police report. It is not disputed that offences under the PCA are triable by a Special Judge appointed under the said Act, and the Special Court (Central-I), Lahore, may entertain such matters where they are properly pleaded and supported. However, the allegations in Respondent No.1 s private complaint relating to criminal misconduct are vague and unsupported by any credible material. The law does not permit the initiation of a roving or fishing inquiry based on general suspicion, as such proceedings undermine the fundamental right to due process under Article 10A of the Constitution. Accordingly, this portion of the complaint is also not competent.

36. Now, I turn to the question of prosecuting the Petitioner and the other accused persons under sections 3 and 4 of the AMLA. Section 21(2) of the Act expressly bars courts from taking cognizance of offences under section 4 except upon a written complaint by the designated Investigating Officer or an officer of the Federal or Provincial Government authorized in writing by the Federal Government. Respondent No.1 does not satisfy either of these statutory qualifications. Accordingly, he cannot invoke the AMLA.

37. There is another important aspect of the case. Section 202, Cr.P.C. empowers a Magistrate, or a court authorized to take cognizance, to postpone the issuance of process and either conduct a preliminary inquiry or direct an investigation to determine whether there is sufficient ground for proceeding. This discretion must be exercised judiciously, and reasons must be recorded. In the present case, the Judge, Special Court (Central-I), Lahore, invoked section 202, Cr.P.C. and directed the Director FIA, Lahore, to depute an officer of the rank of Deputy Director or above to investigate the matter. However, in the same order, he issued notices to the Petitioner and other accused persons to appear and explain their position. This course of action undermines the statutory purpose of section 202, which is to protect individuals from unnecessary process unless a prima facie case is made out through preliminary verification. It is an unlawful exercise of jurisdiction by the court.

Deposition

38. For the reasons discussed above, this petition is accepted . The Impugned Order dated 15.05.2024 passed by the Judge, Special Court (Central-I), Lahore, is declared without lawful authority and set aside. Consequently, the proceedings based on Respondent No.1 s private complaint are quashed. This order, however, shall not preclude Respondent No.1 from pursuing any remedy that may be available to him under the law, subject to compliance with the statutory requirements under any applicable enactment.

MH/S-69/L Petition allowed.

1 FIR No.01/2023 was registered under sections 3(1)(a), 6(1) & (2), 7(1), 2(i)(ii), 8(1)(a), (ca) & (d), 8A, 21, 22(1), 23(1), 26(1), and 73 of the Sales Tax Act, 1990, read with section 2(37) of the Act, punishable under sections 33(3), (5), (8), (11c) (13)(16)(18) of the Act.

2 See section 37E of the STA.

3 Preamble of the Sales Tax Act, 1990.

4 Section 1(2).

5 Black s Law Dictionary, 11th Edition, p.836.

6 See, for example, Tallat Ishaq v. National Accountability Bureau and others (PLD 2019 SC 112).

7 Online verification dated 09.04.2025 provided by the Petitioner.

8 For ease of reference, the Schedule is reproduced below:

The Schedule a. Offences punishable under sections 161 to 166, 168, 217 and 218 of the Pakistan Penal Code, and as attempts, abetments and conspiracies in relation thereto or connected therewith. b. Offences punishable under sections 403 to 409 to 420, 463, 471-A and 477-A of the Pakistan Penal Code, and as attempts, abetments and conspiracies in relation thereto or connected therewith, when committed by an public servant as such or by the person acting jointly with or abetting or attempting to abet or acting in conspiracy with any public servant as such. c. Offences punishable under the prevention of Corruption Act, 1947, and as attempts, abetments and conspiracies in relation thereto or connected therewith.