ISLAMABAD: The Federal Board of Revenue (FBR) will immediately refer the cases of tax fraud to the Directorate of Intelligence & Investigation (Inland Revenue) detected during assessment of sales tax, audit, wrongly paid refunds and recovery of sales tax.
According to the FBR’s instructions issued to the field formations, whereas Section 37A of the Sales Tax Act, 1990 (the Act) empowers the authorized officer to inquire and investigate the commission of tax fraud or an offence under the Act and shall have the powers of a civil court under Code of Civil Procedure, 1908 in matters defined under Clause (a) & (b) of Sub-Section (2) of Section 37A of the Act besides, powers to arrest in the manner defined under Sub-Section (8) & (9) of the Section 37A of the Act.
Whereas it is considered necessary to prescribe a structured procedure for the effective and judicious exercise of the powers conferred under Section 37A of the Act, so that the proceedings undertaken thereunder shall have legally sustainable before appellate fora.
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Therefore, the following Standard Operating Procedure (SOP) is hereby issued for strict compliance by all field formations within their respective jurisdictions:
a) During the proceedings under Section 11E of the Act or otherwise, on the basis of material evidence pointing to the commission of tax fraud by a person, the case shall be referred immediately to the Directorate of Intelligence & Investigation (Inland Revenue) of the related jurisdiction to the extent of tax fraud.
b) Upon receipt of the case referred by the field formation, concerned Director of Intelligence & Investigation (Inland Revenue) shall scrutinize the referred case within thirty (30) days to ascertain whether action under Section 37A(1) of the Act is warranted or otherwise? In case, (i) If such action is deemed warranted, the concerned Commissioner shall formally be intimated; and
(ii) If such action is not warranted, the case be sent back to the concerned jurisdiction for finalization of proceedings under Section 11E of the Act.
c) After the inquiry under sub-section (3) of section 37A of the Act and submission of the report to the Director concerned under section 37(5) of the Act, if the office of the Directorate General of Intelligence & Investigation (Inland Revenue) considers it appropriate to initiate investigation under section 37A(6) of the Act, the procedure prescribed under Sales Tax General Order No. 2 of 2025 shall be followed in letter and spirit, the FBR added.
Copyright Business Recorder, 2026
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