Islamabad: The Lahore High Court has ruled that money laundering cases can proceed independently of tax-related cases, affirming that money laundering constitutes a separate offense that does not require the conclusion of income tax proceedings before initiation.

According to Press Information Department, the judgment was delivered by a two-member bench comprising Mr. Justice Khalid Ishaq and Mr. Justice Hassan Nawaz Makhdoom in response to Writ Petition No. 2928 of 2026 and related cases, which challenged the powers of the Federal Board of Revenue’s Directorate General of Intelligence & Investigation, Inland Revenue (I&I-IR). The court dismissed these petitions, clarifying the legal authority of I&I-IR to investigate and prosecute cases under the Anti Money Laundering Act, 2010.

The court’s decision emphasized that money laundering investigations and prosecutions can be initiated without waiting for the resolution of related tax cases, and a prior conviction for the predicate offense is not a prerequisite for prosecution. It underscored that the Anti Money Laundering Act is a special law that supersedes general laws, and ongoing tax disputes cannot obstruct its enforcement.

The ruling also stated that the Supreme Court’s decision in the Taj International case, which focused on sales tax assessment and recovery, is not applicable to money laundering proceedings. The court affirmed that suspicious transaction reports by banks to the Financial Monitoring Unit are legitimate and conducted with appropriate safeguards. Furthermore, it was noted that writ petitions in the High Court are generally not used to preemptively halt criminal investigations, with questions about the origin and movement of money being determined by Special Courts.

The Federal Board of Revenue welcomed the judgment, considering it a step towards enhancing clarity and reinforcing efforts against money laundering and financial crimes. The case was managed under the leadership of Mr. Aqeel Ahmed Siddiqui, Director General (I&I-IR).