In a significant move to uphold the constitutional jurisdiction of Pakistan Customs and also safeguard the Federal revenues, the Federal Tax Ombudsman (FTO) has initiated an own-motion investigation under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000.
The probe was triggered by credible information received from multiple whistleblowers and preliminary inquiries conducted by the FTO Secretariat, revealing that some provincial Excise & Taxation Departments and Police authorities have been intercepting and disposing of Non-Customs-Paid (NCP) vehicles under provincial laws instead of the Customs Act, 1969.
According to the O.M, a large number of NCP and tampered vehicles have been impounded by the provincial authorities, leading to non-realization of legitimate customs duties and allied taxes chargeable on such vehicles. These actions, carried out under provincial rules such as the Balochistan Road Checking, Seizure and Disposal of Motor Vehicles Rules, 2025 and the Khyber Pakhtunkhwa Road Checking, Seizure and Disposal of Motor Vehicles Rules, 2015, are hit by Article 143 of the Constitution of Pakistan, 1973, and in violation to the Customs Act, 1969.
The FTO’s investigation highlights that the Customs Act, 1969 vests exclusive authority with Pakistan Customs to detain, seize, adjudicate, and dispose of smuggled or non-duty-paid vehicles.
Section 170 explicitly mandates that when NCP vehicles are impounded by the Police, such cases must be reported and vehicles handed over to the nearest Custom House. Any deviation from the said legal provision constitutes an offence punishable under Section 156(1)(83) of the aforesaid Act.
The investigation further highlights that despite clear constitutional provisions and judicial directives — including landmark judgments of the Hon’ble Supreme Court of Pakistan in Criminal Petition No. 802 of 2015 and the Peshawar High Court in Writ Petition No.1428-P/2013, some provincial authorities continue to exercise powers outside their legal domain. The practice of granting superdari of NCP vehicles to Police under Section 550 of the Criminal Procedure Code, 1898 is in negation to the provisions of Customs Act, 1969 besides inflicting colossal loss to the national Exchequer. The FTO observed that Customs Collectorates across the country have been repeatedly approaching provincial authorities seeking handing over of detained/seized NCP and tampered vehicles yet compliance remains negligible. The investigation reveals that there is lack of coordination between the Customs Department/ FBR and relevant provincial authorities.
