Merged districts: PHC suspends FIA notices to industrial units

PESHAWAR: The Peshawar High Court has suspended notices issued by the Federal Investigation Agency (FIA) to 110 industrial units operating in the merged districts, formerly known as the Federally Administered Tribal Areas (FATA), and directed the relevant authorities to submit their responses. A division bench comprising Justice Syed Arshad Ali and Justice Babar Sattar passed the orders while hearing petitions filed by owners of several industrial units. During the proceedings, the petitioners’ counsel submitted that the industrial units were established in the former FATA, which had enjoyed tax-free status. He said the units had imported raw materials between 2019 and 2025 under the applicable tax exemptions and had furnished post-dated cheques against the consignments. READ ALSO: Merged districts, Malakand: KP urges Center to defer tax exemption withdrawal The counsel explained that Consumption Certificates were issued after verification by the Inland Revenue authorities in Peshawar, certifying that the tax-exempt imported material had been consumed within the designated area. Once the verification process was completed and the certificates issued, the post-dated cheques were returned to the industrial units. He said the process continued for about a year, after which several industrial units approached the high court when the authorities stopped issuing Consumption Certificates. Following court intervention and completion of the requisite audit process, the certificates were issued, and the post-dated cheques deposited by the units were returned. Referring to subsequent developments, the counsel said a meeting of the Senate Sub-Committee on Narcotics Control was held during which some tobacco industry representatives raised complaints against officials of the Inland Revenue Department. The committee subsequently summoned the chief commissioner concerned. The counsel said that during the meeting, certain members allegedly claimed that Consumption Certificates had been issued to industries in the former FATA in exchange for substantial amounts of money, causing losses of billions of rupees to the national exchequer. He submitted that the Senate sub-committee referred the matter to the Ministry of Interior for investigation, which subsequently referred it to the FIA. Following the referral, the FIA’s Anti-Corruption Unit issued notices to 110 industrial units that had obtained Consumption Certificates, seeking their records and documents, the counsel said. The counsel argued that the FIA notices were without lawful basis, maintaining that the allegations raised before the Senate sub-committee concerned the conduct of government officials rather than the industrial units. He said most of the Consumption Certificates had been issued only after intervention by the high court, adding that the Inland Revenue authorities had at one stage attempted to encash the post-dated cheques submitted by the industrial units. “The industrial units have no connection with the allegations against the officials, ” the counsel argued, questioning the legal basis for subjecting them to FIA investigations. He further contended that the investigation into tax-related matters fell outside the FIA’s jurisdiction, and that the relevant tax laws already provided a specific mechanism for dealing with any alleged tax evasion. Therefore, he argued, the matter could not be given a criminal dimension without following the prescribed legal procedure. The counsel also questioned the authority of the Senate sub-committee to direct the Ministry of Interior or the FIA to initiate an investigation, arguing that matters relating to taxation fell within the domain of the relevant parliamentary and tax authorities. After hearing the arguments, the bench suspended the FIA notices issued to the industrial units and issued notices to the relevant authorities, directing them to submit their replies. Copyright Business Recorder, 2026

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