Lahore: Lahore High Court (LHC) has maintained investigation into money laundering can be started before final assessment of tax dues. Final decision regarding tax assessment is not compulsory pre-condition for starting investigation into money laundering.
The court while rejecting the plea for stopping criminal proceedings till the completion of tax proceedings dismissed the 19 constitutional petitions seeking abolition of FIRs and investigation into money laundering.
A two members bench of LHC comprising Justice Hassan Nawaz Makhdoom and Justice Khalid Ishaq issued decision on the petitions.
Justice Khalid Ishaq member of bench maintained in 31-page written decision income tax laws and anti money laundering laws have separate objectives.
Calculating tax, assessment of tax dues and investigation into money laundering are two different legal matters.
It was said in the decision money laundering is a separate offence under anti money laundering act. Therefore, the investigations cannot be stopped on this basis that the respective tax authority has not made final assessment of tax dues.
The court maintained a complete procedure for assessment appeal and recovery is there in tax laws. While separate proceedings can be initiated under criminal law in the matter of money laundering.
According to decision that existence of basic offence or illegal means is essential in connection with money laundering.
However awarding sentence to accused first is not essential in basic offence.
Prosecution will have to prove through evidence that the respective amount or property was acquired through criminal means and this illegal means was in the knowledge of the accused.
The competent court will decide about whether the allegations were proved finally or otherwise on the basis of evidence.
The petitioners took the plea during the hearing of the case the criminal proceedings under money laundering cannot be initiated unless FBR makes final assessment of the dues by completing tax assessment.
The petitioners said criminal proceedings without completing the tax matter runs contrary to article 4 and 10-A of the constitution.
The petitioners took the plea a complete procedure of assessment, appeal and recovery is there in tax laws ,therefore, tax matter should be settled first. Later the proceedings regarding matter of money laundering be initiated.
On the other hand FBR took the plea tax assessment and investigation into money laundering are separate legal matters. Final assessment of tax dues is not necessary for investigation into money laundering. Law enforcement agencies can take action on the basis of available evidence.
The court did not agree to this stance of the petitioners and made it clear that the objectives, jurisdiction and legal procedure of both the laws are different therefore, the completion of one proceedings can not be linked to completion of second proceedings.
The Supreme Court decision regarding Taj International was also referred to in the decision.
LHC maintained that the final offence cannot be considered proved on the basis of the allegations during the process of investigation.
The respective forum will decide this on the basis of evidence which came to fore during the investigation either the money laundering offence is proved or otherwise.
The court while rejecting the plea for abolition of FIRs of money laundering and investigation on the basis of these legal points dismissed all the 19 constitutional petitions.