PESHAWAR: The Peshawar High Court has directed the Federal Board of Revenue (FBR) to de-seal 26 cigarette factories in the province, which were recently sealed for defying orders to install CCTV cameras on the premises.

A bench consisting of Justice Wiqar Ahmad and Justice Mohammad Ijaz Khan issued notices to the FBR chairman and the chief commissioner as well as the commissioner (inland revenue) at the regional tax office, asking them to respond in a fortnight to identical petitions of four cigarette manufacturers against the Aug 18 letter issued by the FBR project director (tracking and tracing system) for CCTV camera installation.

The bench declared: “The factories sealed due to non-compliance of impugned letter dated 18.08.2025 (impugned herein) shall be de-sealed and no further adverse action shall be taken against the petitioner[s] on the basis of non-compliance of the impugned letter mentioned above.”

It fixed Sept 11 for next hearing into the petitions filed by the Universal Tobacco Company and three other manufacturing units for declaring the impugned letter illegal and setting it aside.

Four companies had challenged orders to install CCTV cameras

The petitioners insisted that the letter issued to the factories, which were solely owned by Pakistani citizens, was “discriminatory and not sustainable in the eyes of the law” as cigarette companies owned and operated by the multinational companies were exempted from the requirement without giving any justification.

They requested the court to declare that the actions taken by the respondents in pursuance of the impugned letter were illegal.

Lawyer Isaac Ali Qazi appeared for the petitioners and contended that a number of excessive and penal measures had already been introduced against cigarette manufacturers in the province, like deployment of Inland Revenue officers under Section 40-B of the Sales Tax Act as well as introduction of a system of electronic surveillance under Section 40-C of the Act.

He added that another unreasonable FBR demand to the cigarette industry in the province was the installation of CCTV cameras as per the specifications mentioned in the Aug 18 impugned letter.

The lawyer said as Aug 25 was set as the deadline for installing CCTV cameras, FBR sealed all 26 factories soon after its passage, rendering a large number of workers jobless.

He argued that his clients followed all relevant laws and regulations, including the Sales Tax Act, 1990, Income Tax Ordinance, 2001, and Federal Excise Act, 2005, and the rules and regulations made thereunder.

Mr Qazi said that in 2019, amendments were made to Chapter XIV B of the Sales Tax Rules 2006. He said that through the amended rules and Section 40-C of the Act an electronic monitoring tracking and tracing system (TTS) was introduced for the production, import and supply chain of tobacco products, beverages, sugar, fertiliser and cement.

He said that the petitioner companies at substantial cost installed TTS and linked it with the licensee authorised by the FBR in this behalf on Nov 2, 2023.

The lawyer added that in addition to the electronic surveillance of the production process, the manufacturing facilities were being monitored round the clock by the staff members of the Peshawar regional tax office, which was the field office of the FBR.

He said that the impugned letter was sent to the petitioners as well as other companies in the province, conveying the decision of the ‘competent authority’ that all green leaf threshing units will install IP CCTV cameras by Aug 25 for the monitoring of the operations and functionality of cigarette manufacturing units and to provide FBR with access to their video feed.

Mr Qazi said that specifications of CCTV cameras and the points in the production process where they’re to be installed were mentioned in the letter.

Published in Dawn, August 31st, 2025