Islamabad: The Federal Board of Revenue (FBR) has welcomed a Lahore High Court (LHC) ruling that allows money laundering proceedings to continue independently without waiting for related tax cases to be concluded.

“The LHC has ruled that money laundering is a separate crime in its own right. FBR does not have to wait for a person’s income tax case to be fully decided before it starts a money laundering investigation,” the FBR said in a news release on Monday.

A two-member LHC bench comprising Justice Khalid Ishaq and Justice Hassan Nawaz Makhdoom issued the judgment in Writ Petition No. 2928 of 2026 and related cases, dismissing petitions challenging the powers and actions of the FBR’s Directorate General of Intelligence & Investigation, Inland Revenue (I&I-IR).

According to the FBR, the court held that the I&I-IR had full legal authority under the Anti-Money Laundering Act, 2010, to register cases, conduct investigations and prosecute offences under the law.

The court also clarified that money laundering and tax proceedings were separate matters and that neither process was required to await the conclusion of the other.

The judgment further held that a person could be prosecuted for money laundering even without a prior conviction for the offence that generated the proceeds.

The FBR said the Anti-Money Laundering Act was a special law that took precedence over general laws, and that ongoing tax disputes could not be used to halt or delay proceedings under the Act.

The court also observed that the Supreme Court’s ruling in the Taj International case concerned sales tax assessment and recovery and could not be invoked to prevent money laundering proceedings.

The FBR said the LHC further recognized that when banks report suspicious transactions to the Financial Monitoring Unit (FMU) and subsequent action is taken, such proceedings are conducted within the legal framework and subject to appropriate safeguards.

It added that the court held that a writ petition could not ordinarily be used to pre-emptively halt a criminal investigation, while questions relating to the source and movement of funds would be determined by the relevant Special Courts.

The FBR said the judgment provided important legal clarity and strengthened the legal framework for combating money laundering and financial crimes.

It added that the ruling did not affect taxpayers who had lawfully declared their income and paid the applicable taxes, stressing that all enforcement actions would remain subject to due process and the rule of law.