A. Background

This refers to the related Important in trail, blue, italic and double Line TLQC 3234 of 8.8.25 about Inquiry, Investigation & Approval Procedure for action FST 37A vide STGO 2 (2) For List of other relevant TLQCs Please refer to Para C.

B. Updated Commentary

1. Further to KQU 3815 of 6.3.26, being an important matter, we would inform you about No.1(42)SA-M(IR-Ops)/2026/25980-R Standard Operating Procedure (SOP) for Exercising the Powers Conferred by Section 37A of the STA, 1990 of 3.3.26 - FBR (Attachment 3450.1) in the ensuing paragraph, with emphasis in bold & Underline and purple matter as a KC TLQC part for quick reading and reading.

2. Whereas Section 37A of the STA, 1990 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 (Act No. V of 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.

3. And whereas it is considered necessary to prescribe a structured procedure for the effective and judicious exercise of the powers conferred u/s 37A of the Act, so that the proceedings undertaken thereunder shall have legally sustainable before appellate fora.

4. 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 u/s 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 u/s 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 u/s 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 u/s 37(5) of the Act, if the office of the Directorate General of Intelligence & Investigation (Inland Revenue) considers it appropriate to initiate investigation u/s 37A(6) of the Act, the procedure prescribed under Sales Tax General Order No. 2 of 2025 (KC: TLQC 3234 of 8.8.25 in trail refers) shall be followed in letter and spirit.

This issues with the approval of Member (IR-Operations).

FBR has sent to Director General, Intelligence & Investigation (Inland Revenue), Islamabad.

C. List of other relevant TLQCs

(b) 3233 of 7.8.25 Grievance Redressal Committee for FST 37A Investigation & Prosecution Cases plus KCV 

(c) 3230 of 7.8.25 about FST & FED amendments Explanatory Circular 2 with Content

(c) 3212 of 22.7.25 about Updated STA 

D. Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (900+ Tax, Levies, Companies, Banking, Finance, Economy, Inflation, etc

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