PHC rejects over 60 petitions against mandatory CCTV, e-invoicing in tobacco factories

The Peshawar High Court dismissed over 60 petitions filed by various tobacco manufacturing companies challenging the mandatory installation of CCTV cameras and electronic invoicing systems in their units.

A two-member PHC bench, comprising Justice Syed Arshad Ali and Justice Faheem Wali, on Wednesday ruled that the amendments introduced by the Federal Board of Revenue (FBR) to the Sales Tax Rules were lawful, within the authority of the tax body, and aimed at ensuring transparency and preventing large-scale tax evasion.

During the hearing, counsel representing the petitioning companies argued that the FBR had made CCTV installation compulsory and required that all outward consignments be reported to the FBR through electronic invoices.

They contended that such conditions were imposed without proper amendments to the rules and that the FBR lacked the authority to enforce these measures. The lawyers maintained that no country in the world imposed such surveillance on industrial units and warned that the policy would harm investment in the tobacco sector.

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Opposing the petitions, FBR’s counsel Barrister Aamir Javed urged the court to dismiss the challenges, stating that the FBR was fully empowered to amend the sales tax rules.

He informed the bench that the requirements were added after amending the Sales Tax Rules of 2006, with the sole objective of safeguarding more than Rs200 billion in tax revenue which, according to the FBR, was being lost to tax evasion by several factories.

He added that even an FBR member has the authority to frame rules, and that the introduction of CCTV cameras and electronic invoicing would bring transparency, strengthen the monitoring system, and improve tax compliance.

The lawyer said that the amendments were enacted after due legislative process and stakeholder consultation, and did not impose any undue burden on manufacturers, who were only required to pay taxes already mandated by law.

After hearing the arguments, the court dismissed all petitions and upheld the FBR measures, declaring the conditions of CCTV installation and e-invoicing legally valid and in accordance with the law.