Law: Sales Tax Act, 1990

Section: 37,37A, 37A(4), 37B(11), 40, 11,11E, 33(13)

PESHAWAR HIGH COURT, PESHAWAR (a) Sales Tax Act (1990) & Finance Act (2025)--- ----Ss. 37A & 11E---Power to Inquire, Investigate Tax Fraud and Arrest---Scope of Substituted Section 37A---Non-Obstante Clause vis-à-vis Section 11E---Autonomous Statutory Mechanism.---Section 37A of the Sales Tax Act, 1990, as substituted by the Finance Act, 2025, expressly commences with a non-obstante clause (\"Notwithstanding anything contained in Section 11E\") and creates an autonomous, independent statutory mechanism for inquiry and investigation into alleged tax fraud. Unlike the pre-amendment statutory framework, inquiry and investigation under Section 37A can lawfully be initiated and conducted by Inland Revenue authorities without prior civil adjudication or determination of tax liability under Section 11E. The substituted framework provides an internal procedural scheme including prior authorization at successive levels, structured timeframes (six months for inquiry, three months for investigation), recording of reasons, mandatory opportunity of hearing, and determination of the tax fraud amount within the criminal process itself under Section 33(13). Consequently, the absence or pendency of proceedings under Section 11E does not render inquiry or investigation under Section 37A premature, without lawful authority, or invalid. Ref:- M/s Taj International (Pvt.) Ltd. v. Federation of Pakistan (PLD 2025 SC 633 / 2025 PTD 1270) [Distinguished]; Al-Hajj Steel Foundry v. Federation of Pakistan (2025 PTD 662 Peshawar) [Distinguished]; Collector of Sales Tax and Central Excise v. Messrs Mega Tech (Pvt.) Ltd. (2005 SCMR 1166). b) Sales Tax Act (1990) & Finance Act (2025)--- ----S. 33(13) read with S. 37B(11) & S. 37A---Assessment of Loss of Tax in Criminal Proceedings---Removal of Procedural Incongruity Identified in Pre-amendment Precedents.--- Under Section 33(13) of the Sales Tax Act, 1990, as amended by the Finance Act, 2025, a person convicted by a Special Judge for specified categories of tax fraud is liable, in addition to imprisonment extending up to five years, to pay an amount equal to the loss of tax caused, as confirmed by the Special…