SHC restrains FBR from taking coercive action against fashion designer in sales tax fraud case

The Sindh High Court on Thursday restrained the Federal Board of Revenue from taking coercive action against a fashion designer in a Rs1.2 billion sales tax fraud case and ordered status quo in respect of the FBR proceedings.

The interim order came on a petition of Noman Ansari and others, who challenged the registration of an FIR against him and others by the FBR under the sales tax law.

The petitioners’ counsel Ahmed Masood and Mohammad Altaf submitted that the FIR had been lodged in violation of the SHC’s interim order on March 18, 2025 as well as without lawful authority and jurisdiction.

The counsel submitted that the FBR had earlier raided the premises of the petitioner and sealed it; however, the sealing order was suspended by the high court. They said the FBR issued a notice under Section 11(E) of the Sales Tax Act for adjudication of the matter, which was then followed by the summon under Section 37 of the Act in respect of the same issue, which was suspended by the high court.

They said that on the basis of the notice under Section 11(E) of Sales Tax and order in original was passed on April 17 and even without the lapse of statutory period in the filing of the appeal, the impugned FIR has been registered, an act which is malafide and assumption of unlawful jurisdiction.

The counsel submitted that summons have already been suspended by the court and the FIR emanates from the content of the summon although the first appeal is pending before the appellate tribunal and the registration of the FIR in the case is without lawful authority.

The court was requested to quash the proceedings of the FIR and restrain the respondents from taking any coercive action against the petitioners. The court issued notices to the FBR and others and called their comments on May 23. The court in the meantime ordered status quo in the criminal proceedings and restrained the FBR from taking any coercive action against the petitioners till next date of hearing.

The FBR had registered the FIR against Mohammad Noman and others, alleging that they have suppressed the sales made from the tax period from July 2018 to January 2025 and caused loss to the national exchequer to the tune of Rs1,219,677,067 in violation of the various provisions of the Sales Tax Act.