LHC rules money laundering proceedings need not await tax cases

According to Mettis Link News, the Lahore High Court has held that money laundering investigations are not held back by pending tax litigation. A two-member bench, Justice Khalid Ishaq and Justice Hassan Nawaz Makhdoom, reached the decision while dismissing petitions that challenged the powers of FBR's Directorate General of Intelligence & Investigation Inland Revenue. The judgment, issued under Writ Petition No. 2928 of 2026, also treats money laundering as a separate offence under the Anti-Money Laundering Act, 2010.

The court also held that a person can face money laundering proceedings without a prior conviction for the offence behind the funds. It acknowledged that the I&I-IR can open cases, carry out investigations and bring prosecutions under the Act. It also treated that statute as superior to general laws, and said the Taj International ruling only dealt with sales tax recovery and could not halt money laundering cases.

The judgment also addressed suspicious transaction reports that banks file with the Financial Monitoring Unit, finding that subsequent action on those reports sits within the legal framework. The court added that writ petitions are not normally used to halt criminal probes at an early stage, leaving questions on fund origin and movement to Special Courts. FBR said the ruling gives legal clarity and strengthens the fight against financial crime.