Islamabad: The Federal Board of Revenue (FBR), through Senior Counsel Hafiz Ehsaan Ahmad Khokhar has approached the Federal Constitutional Court of Pakistan (FCC) by filing three different Petitions for Leave to Appeal against the judgment dated 18 December 2025 rendered by the Peshawar High Court in Writ Petition No. 9645-P/2025 and others. The petition invokes the jurisdiction of the FCC under Article 185(3) of the Constitution and raises substantial questions of law concerning the scope of constitutional jurisdiction under Article 199 of the Constitution and the enforcement powers of tax authorities under the Federal Excise Act, 2005 and the Federal Excise Rules, 2005.
According to the three different petitions, the three different respondent companies operates a cigarette manufacturing unit at Nowshera Road, Mardan, which is subject to the regulatory framework established under the Federal Excise Act, 2005. Acting upon credible information regarding possible evasion of federal excise duty, the departmental authorities obtained a search warrant from a court of competent jurisdiction and conducted a search operation on 12 December 2025 in exercise of powers conferred under Sections 26 and 27 of the Federal Excise Act. The search was carried out under the supervision of an Assistant Commissioner and resulted in the recovery of approximately 2.75 million kilograms of unmanufactured tobacco from five godowns located at Sang-e-Mar Mar on the Swabi-Mardan Road, opposite Samson GLT.
The petitions further states that, upon confrontation, the authorized managers present at the godowns failed to produce documentary evidence showing payment of federal excise duty or other applicable taxes as required under Sections 16 and 17 of the Federal Excise Act, 2005. The recovered stock was allegedly linked with the GLT unit operated by M/s Samsons Re-Drying and Processing Company (Pvt.) Ltd., which had been leased by the respondent company. In view of the unreconciled and undeclared stock, and the absence of duty-paid documentation, the competent officer formed a 'reason to believe' within the contemplation of Rule 28A(6) of the Federal Excise Rules, 2005 that the goods were clandestinely stocked and that the GLT machinery and cigarette manufacturing unit were being used in contravention of the provisions of the Act and the Rules framed thereunder.
Consequently, the GLT unit as well as the cigarette manufacturing premises were sealed in exercise of statutory authority under Rule 28A(6) read with Sections 26 and 27 of the Federal Excise Act, 2005. The department subsequently issued a show cause notice under Section 24 read with Section 33 of the Act, thereby initiating adjudicatory proceedings in accordance with the statutory procedure prescribed for determination of liability and enforcement of excise duty.
The respondent companies challenged the Regional tax action/departmental action before the Peshawar High Court by filing different constitutional petitions under Article 199 of the Constitution. After hearing the parties, the High Court partly allowed the petitions and declared the sealing of the manufacturing units illegal while observing that the revenue authorities could proceed with inquiry and assessment in accordance with law if violations were established.
In its petition before the Federal Constitutional Court, the FBR contends that the High Court exceeded the limits of its constitutional jurisdiction by entertaining the writ petition despite the existence of adequate and efficacious alternate statutory remedies provided under Sections 33, 34 and 35 of the Federal Excise Act, 2005, which establish a complete statutory hierarchy for adjudication, appeal and revision. According to the department, the impugned judgment is contrary to the well-settled doctrine of exhaustion of remedies, consistently affirmed by the Supreme Court of Pakistan, including in the reported case of 2022 SCMR 92, which holds that constitutional jurisdiction cannot ordinarily be invoked to circumvent the remedies provided under a special fiscal statute.
The petition further submits that the High Court interfered at a premature stage of the proceedings, even though only a show cause notice had been issued and the adjudication process under Section 33 of the Federal Excise Act had not yet culminated in any final determination of liability. The department argues that the issuance of a show cause notice merely initiates adjudicatory proceedings and does not constitute a final adverse order amenable to challenge under Article 199 of the Constitution.
The FBR has also challenged the High Court's treatment of the statutory expression 'reason to believe' contained in Rule 28A(6) of the Federal Excise Rules. The petition asserts that the formation of such belief is to be assessed on the basis of objective material available to the competent officer at the time of action, and not on conclusively established proof that may emerge only after completion of adjudication proceedings. According to the department, the recovery of a large quantity of unreconciled tobacco stock and the failure to produce duty-paid documents constituted sufficient material to justify regulatory action under the statute.
It is further argued that the High Court erred in substituting its own subjective satisfaction for the statutory satisfaction of the competent authority, thereby intruding into the domain of administrative discretion. The department maintains that the sealing of the GLT unit and the cigarette manufacturing premises under Rule 28A(6) read with Sections 26 and 27 of the Federal Excise Act constitutes a preventive and regulatory measure aimed at safeguarding federal revenue, rather than a punitive action.
The petitions also emphasizes that Rule 28A(7) of the Federal Excise Rules provides a specific statutory mechanism for seeking de-sealing of machinery and premises, which constitutes an adequate alternate remedy. In these circumstances, it is contended that the constitutional petition itself was not maintainable under Article 199 of the Constitution.
Another significant ground raised before the FCC is that the High Court entered into disputed questions of fact, including the linkage of the recovered tobacco stock with the manufacturing activity of the respondent company, reconciliation of inventory, and alleged non-payment of duty. According to the department, such matters require examination of evidence and fact-finding, which fall within the exclusive jurisdiction of the adjudicating authority under Section 33 of the Federal Excise Act and cannot be determined in writ jurisdiction.
The FBR has therefore submitted through its senior counsel Hafiz Ehsaan Ahmad Khokhar that the impugned judgments suffers from misreading and non-reading of material evidence, including recovery memos, seizure reports and documentary discrepancies, and that it undermines the statutory enforcement powers granted to departmental officers for protection of public revenue. Maintaining that the case raises important questions regarding the limits of constitutional jurisdiction in fiscal matters and the interpretation of enforcement provisions under the Federal Excise Act, the FBR has requested the FCC to grant leave to appeal and set aside the impugned judgments in the interest of justice and proper enforcement of revenue laws.