Summary: Background:The judgment from the Islamabad High Court addresses a conglomerate of writ petitions filed against the imposition of super tax under Section 4C of the Income Tax Ordinance 2001 by various companies and entities. These petitioners, including major corporations like Fauji Fertilizer Company Limited and China Mobile Pakistan Limited, contested the tax's constitutionality, arguing it infringed upon their fundamental rights to conduct business and hold property as enshrined in the Constitution of Pakistan.----Issues:Whether Section 4C of the Income Tax Ordinance 2001, imposing a super tax on high-earning individuals and corporations, is constitutionally valid.Whether the imposition of super tax violates the petitioners' fundamental rights under Articles 18 (Right to do business), 23 (Right to acquire, hold and dispose of property), and 24 (Protection of property rights) of the Constitution.Whether the taxation mechanism under Section 4C leads to retrospective taxation, thereby affecting transactions that were already concluded.Whether the law discriminates against specific sectors by imposing differential tax rates.----Holding/Reasoning:The court held Section 4C to be ultra vires the fundamental rights provided under Articles 18, 23, and 24, read with Article 4 of the Constitution, leading to its decision to "read down" the provision. This means the court chose to interpret Section 4C in a manner that aligns with constitutional mandates, effectively limiting its applicability. The court reasoned that:Taxation must provide certainty and not arbitrarily or retrospectively impose liabilities on taxpayers.The creation of a "new category of income" for the purpose of imposing super tax is not substantiated by real and tangible property, rendering it constitutionally invalid.The provision, as applied, led to discriminatory treatment of different sectors and entities, violating the principle of equality before the law.----Citations/Precedents:The judgment extensively references constitutional provisions and interprets them in light of the fundamental rights they guarantee. Additionally, the court drew upon principles established in previous cases, such as:"Imrana Tiwana vs. Lahore Development Authority" where the principle of reading down statutes to ensure constitutionality was applied."Elahi Cotton Mills Ltd vs. Federation of Pakistan" where the court discussed the importance of taxation laws being clear, certain, and non-discriminatory to comply with constitutional mandates."Ocean Pakistan Limited vs. Additional Commissioner Inland Revenue" which was referenced but distinguished based on the specific provisions of the Petroleum Concession Agreements and the Regulation of Mines and Oil-Fields and Mineral Development (Government Control) Act, 1948.

Summary: Background: Multiple constitutional petitions and sales tax reference applications were filed, relating to the dispute over the collection and levy of sales tax on Toll Manufacturing. This case involves the conflict between the Federation and the Province of Sindh regarding who holds the authority to levy and collect sales tax on Toll Manufacturing. The petitioners have been paying sales tax on Toll Manufacturing to the Federal Government through the Federal Board of Revenue (FBR), but the Province of Sindh claims the tax should be paid to them as it considers Toll Manufacturing a service under the Sindh Sales Tax on Services Act, 2011. The dispute intensified post the 18th Amendment, with differing interpretations on which government entity is entitled to collect the tax. ----Issues: 1- Whether the collection of sales tax on Toll Manufacturing falls under the jurisdiction of the Federal Government or the Province of Sindh. 2- Whether Toll Manufacturing qualifies as a "service" under the Sindh Sales Tax on Services Act, 2011, or as "manufacturing of goods" under the Sales Tax Act, 1990. 3- Whether the Province of Sindh can retroactively claim sales tax from the Petitioners for Toll Manufacturing, even after agreeing that FBR would collect it post-July 2022. ----Holding/Reasoning/Outcome: The court held that Toll Manufacturing is not a service but a manufacturing process under the Sales Tax Act, 1990, and therefore the Province of Sindh cannot claim sales tax on this activity under the Sindh Sales Tax on Services Act, 2011. The court referred to previous judgments establishing that Toll Manufacturing is part of the manufacturing process and not a service. The court further observed that any sales tax already paid by the Petitioners to the Federation through the FBR constitutes a final discharge of their liability for the disputed period, and they are not obliged to pay further sales tax to the Province of Sindh. If the Province of Sindh seeks any share of the tax already collected, it must approach the Federation for an amicable settlement. ----Citations/Precedents: Amie (2006 PTD 1459) ORI TECH (2019 SCMR 875) Constitution of Pakistan, Fourth Schedule, Entry 49 Gulistan Textile Mills Ltd. v. Soneri Bank (2018 CLD 203)

Summary: (a) Sales Tax Act (VII of 1990) — S. 40C(2); Sales Tax Rules, 2006 — R. 150ZF — Electronic monitoring — Track and trace system — Validity of deadline notified through General Orders — Contractual obligation to comply — Enforcement upheld. Federal Board of Revenue (FBR), under statutory authority conferred by S.40C(2) of the Sales Tax Act, 1990 read with R.150ZF of the 2006 Rules, was empowered to fix the deadline for implementation of electronic monitoring of production and sale of excisable goods, including tobacco, via a track and trace system. Petitioner's challenge to Sales Tax General Order No.8 of 2022, addendum dated 26.04.2022 extending deadline to 20.05.2022, and related correspondence, was found devoid of merit. Petitioner, having voluntarily entered into a tri-partite agreement with FBR and the licensed service provider on 11.03.2022, was bound to comply with contractual obligation to install tax stampers and acquire tax stamps by the notified deadline. FBR's enforcement direction was lawful and within scope of its statutory powers. (b) Constitutional Petition — Maintainability — Delay in approaching court — No plausible justification — Doctrine of laches. Petitioner filed writ petition on 19.05.2022 — only one day prior to the extended deadline of 20.05.2022. No plausible explanation was offered for delay in invoking constitutional jurisdiction, despite petitioner being aware of the notified deadline since issuance of addendum on 26.04.2022. Held, doctrine of laches applied; writ jurisdiction cannot be invoked to stall or nullify a regulatory deadline through belated litigation. (c) Administrative Law — Contractual obligations — Self-induced hardship — No ground for judicial relief. Petitioner’s failure to install tax stampers and acquire tax stamps due to prior attachment of its bank accounts by FBR did not absolve it from performance of its contractual obligations. A party’s own financial or logistical constraints could not serve as valid grounds to seek judicial relief against enforcement of a statutory scheme to which it had already consented. Allowing removal of tobacco products without tax stamps would nullify the very objective of the regulatory framework. Disposition: Petition dismissed in limine for being devoid of merit and filed without justification for delay. Office directed to forward copy of judgment to Chairman, FBR.

Summary: The FBR is established under Section 3 of the Federal Board of Revenue Act, 2007 ( Act of 2007 ). FBR is the successor of the Central Board of Revenue ( CBR ), which was established on 1st April, 1924 through Central Board of Revenue Act, 1924. In 1944, the CBR was put under the Revenue Division with the Ministry of Finance until, 1960, when on the recommendation of Administrative Reorganization Committee the CBR was made into a Division of Ministry of Finance. Under the Act of 2007, indeed FBR is a State instrumentality responsible for enforcing fiscal laws and collecting revenue for the Federation. The perusal of Section 4 of Act of 2007 would show that main functions of FBR, inter alia, are (i) formulation and administration of fiscal policies (ii) to make regulations, polices, programs, strategies in order to carry out the purposes of this Act; (iii) levy and collection of federal duties, taxes and other levies; (iv) quasi judicial functions of deciding taxation cases/another appeals.Subsection (ii) of Section 4 clearly envisages that the FBR where deemed appropriate may issue statutory rules and orders (SROs), orders, circulars and instruction for the enforcement of any of the provision of the fiscal law.The Federal Board of Revenue has the authority to issue statutory circulars/ instructions not in conflict with the other fiscal laws including the Sales Tax Act, 1990, Income Tax Ordinance, 2001 and Customs Act, 1969. However, its legality on the touchstone of reasonability and either in conflict to any other statutory dispensation can be looked into by the Constitutional Court.That the purpose of the audit is to ensure that the taxpayer has complied with the relevant fiscal laws and instructions issued by the Fiscal Regulator i.e. FBR. It is not meant to conduct a roving and fishing inquiry into the affairs of any taxpayer in order to fish for default. Against any audit proceedings under Income Tax Ordinance, 2001 and Sales Tax Act, 1990, the taxpayer has been given a complete statutory protection to defend itself/himself. Therefore, through the impugned Circulars making the taxpayer to a further audit through an unstructured policy is against the letter of Section 177 of the Income Tax ordinance, 2001 and Section 25 of the Sales Tax Act, 1990.Thus, this unguided, unbridled discretion authorizing the Revenue for annual audit of the importer more particularly in the circumstances when the field of audit is occupied for the purpose of income tax and sales tax as provided under Section 177 of Income Tax Ordinance, 2001 and Section 25 of the Sales Tax Act, 1990, amounts to excessive delegation and thus, is illegal.

Summary: Bail After Arrest in FIR No. 229/2020, dated 01-12-2020, U/s 489-F PPC, PS Margalla, Islamabad.

Summary: The petition filed by the Federation of Pakistan through its Secretary, Finance, and the FBR sought leave to appeal against the High Court's judgment. The petitioners' representative, Mr. Muhammad Khalil Dogar, argued that the High Court erred in setting aside the contract awarded to NLC Construction Solutions (NCSPL). He contended that the Public Procurement Rules allowed for a viable third party, NCSPL, to participate in the project. Additionally, Mr. Dogar asserted that the FBR had the authority to award the contract to the most qualified contractor, as determined through a competitive bidding process. During the proceedings, questions were raised regarding the representation of the Federation of Pakistan by a private counsel instead of the Attorney-General or a law officer from the office of the Attorney General. The original case file revealed a power-of-attorney signed by Dr. Fareed Iqbal Qureshi, Collector of Customs, Model Collectorate of Custom Preventive, Custom House, Karachi, authorising an Advocate-on-Record (AOR). However, there was no authorisation by the Federation of Pakistan itself. Consequently, the petition filed on behalf of the Federation of Pakistan was deemed not maintainable by the Supreme Court. Upon careful consideration of the arguments presented by both parties, the Supreme Court rendered its judgment in the case. While noting the lack of authorization for the Federation of Pakistan's representation, the Court proceeded to hear the petition on behalf of the FBR. The Court acknowledged the issues raised in the report of the Federal Tax Ombudsman and the concerns regarding the awarding of the contract to NCSPL. Ultimately, the Court upheld the judgment of the High Court, affirming the cancellation of the contract.

Summary: NIRC / Connection of record: Petitioner was an employee of IESCO, his date of birth has wrongly been maintained as 1961 instead of 1964, and on this before his retirement is being processed. NIRC dismissed his claim.

Summary: Review of order upon conceding statement by FBR, is allowed for the reason that Commissioner's right under Income Tax Ordinance, 2001, to amend under Section 122, an assessment order under Section 120 would be compromised. Taxpayer has right to compute and declare income as per his interpretation vis a vis Commissioner's right to amend the assessment. Both rights need to be protected.

Summary: Income Tax Reference

Summary: The case involves Ramzan Sugar Mills Limited filing a petition under Article 199 of the Constitution against a notice issued by the Federal Board of Revenue (FBR) under the Income Tax Ordinance, 2001. The notice pertained to the tax year 2015 and sought information regarding discrepancies in sales declared by the petitioner. The petitioner argued that the notice was issued with malafide intent, especially after a previous notice had been withdrawn. The FBR objected to the maintainability of the petition, claiming it was premature as no final order had been issued, and only information was sought. The court delved into the interpretation of Income Tax Ordinance, particularly Section 122(4), which allows for the amendment of assessment orders. The court held that the notice seeking information did not constitute an adverse order against the petitioner. It emphasized the need to exhaust alternate remedies available under the Ordinance before approaching the court. Considering the principles of statutory interpretation, the court concluded that the petition was premature and directed the petitioner to provide the requested information to the FBR within a specified time frame. It also ordered that no coercive measures be taken against the petitioner until the matter was resolved.