Summary: (a) General Clauses Act (X of 1897) --- ----S. 3(8ab)---"Federal Government"---Concept of the term 'Federal Government" in relation to five different phases before and after creation of Pakistan stated. (b) Constitution of Pakistan--- ----Art. 99---Constitution (Eighteenth Amendment) Act (X of 2010), S.31---Conduct of business of Federal Government--- Scope---Changes made in Art.99 of the Constitution through the Constitution (Eighteenth Amendment) Act, 2010 elaborated. Two important changes which have been made in Article 99 of the Constitution by the Constitution (Eighteenth Amendment) Act, 2010 were that; (i) the power of delegation to officers and subordinate authorities had been taken away, and (ii) the making of rules had been made mandatory. Two significant inferences followed from such changes. (i) The executive power of the Federal Government had now been channelized and the exercise thereof was to be through the mandatory modality of Rules of Business. These Rules were therefore binding on the Government and a violation of the terms thereof could be fatal to the exercise of executive power. (ii) Whereas originally the Federal Government had the power to delegate any of its functions to officers or authorities i.e. it would have been possible to delegate functions pertaining to fiscal matters to the Finance Ministry; this was no longer possible. (c) Rules of Business, 1973 --- ----R. 16---Cases to be brought before Cabinet---Discretionary power of the Prime Minister---Scope---In terms of R.16 of the Rules of Business, 1973, the Prime Minister had been given discretionary power in the matter of cases brought before the Cabinet, however exercise thereof was circumscribed by certain conditions; first, that there must be a conscious application of mind by the Prime Minister to the existing circumstances justifying the need for such departure through passing of a reasoned and formal order prior to the action taken, and, second, determining whether the constitutional provisions justified such a departure. (d) Constitution of Pakistan--- ----Art. 91---Rules of Business, 1973, Rr. 16, 17, 18, 20---Decision making by the Prime minister---Consultation with the Cabinet---Cabinet being the supreme body of the Executive, with a high constitutional status, could not and ought not to be treated as a mere rubber stamp for decision making by the Prime Minister---Constitution envisaged a parliamentary form of Government which was based on decision making by the Cabinet---To turn the Cabinet into a rubber stamp in pursuit of decision making by the Prime Minister to the exclusion of his Cabinet would violate the letter and spirit of the Constitution, as it would reduce a cabinet form of government into a prime ministerial one which was a concept alien to the Constitution. (e) Rules of Business, 1973 --- ----Rr. 2 & 27 & Part E---Concept of "business of Government"---Scope---'Executive' and 'legislative' matters---Word "business" was defined in terms of R.2 of the Rules of Business, 1973 to mean all work done by the Federal Government--- Concept of 'business of Government' included not merely executive matters but also those which pertained to legislation. (f) Constitution of Pakistan--- ----Art. 99(3)---Rules of Business, 1973---Nature of---Mandatory and binding on the Government---Authority to frame rules was normally conferred by an Act of Parliament---In the case of the Rules of Business, 1973 such authority flowed from the Constitution itself [Article 99(3)]---Federal Government did not have the discretion to not follow the provisions of the Rules of Business, 1973---Following the Rules of Business, 1973 was mandatory and binding on the Government and a failure to follow them would lead to an order lacking any legal validity---Framer of rules was as much bound by the content thereof as anyone else was subject thereto---Constitutionally mandated rules (such as the Rules of Business, 1973) were closely intertwined with the concept of good governance for and in the public interest---Allowing a departure therefrom would be detrimental to open and transparent forms of governance---To allow the Executive to depart from the language of the Rules of Business, 1973 in its discretion, would be to permit, and legitimize, unconstitutional executive actions. Ahmad Nawaz Shah, Senior Intelligence Officer, Director General, Intelligence and Investigation (Customs and Excise), Islamabad v. Chairman, Central Board of Revenue, Islamabad and 10 others 2002 SCMR 560 ref. (g) Rules under a statute--- ----Mandatory and binding in nature---Rules were framed to achieve a certain objective and to achieve this within the channels relating to the devolution and flow of statutory authority---In the absence of compelling reasons to the contrary all rules were, and should be considered to be mandatory and binding---Burden of proof laid on anyone asserting that the rules in question were directory and not mandatory---Such persons must establish that there was a sound and powerful reason why the rules should not be considered mandatory and binding---Said principle applied with redoubled force, for and in relation to two sets of rules; firstly, constitutionally mandated rules e.g the Rules of Business, 1973 and secondly, rules framed under fiscal enactments. (h) Rules under a statute--- ----Mandatory and binding in nature---Government department violating explicit provisions of certain rules (framed under a statute)---Condonation of such violation---Scope---In each and every case the presumption of law would be that the rules were mandatory and should be observed and followed---Only if a compelling public interest was established as a reason for non-compliance with the rules i.e. other than inadvertence, or negligence, or incompetence then, and only then, could the court consider whether or not to condone the breach in the observance of the rules. (i) Constitution of Pakistan --- ----Arts. 41, 48 & 90---"Federal Government"---Concept and scope---President was not part of Federal Government; he was the Head of the State---Federal Government consisted of the Prime Minister and the Federal Ministers (i.e. the Cabinet) and not the President. (j) Rules of Business, 1973--- ----Rr. 2 & 27---Concept of "business of Government"---'Executive' and 'legislative' matters---Separation of powers between the "Executive" and "Legislature"---Scope---Concept of 'business of Government' included not merely executive matters but also those which pertained to legislation---Rule 27 of the Rules of Business, 1973 stipulated that the Division concerned shall be responsible for determining the contents of the proposed legislation and for consultation with other Divisions---All this was part of the legislative business which was governed by the Rules of Business, 1973, however, once the proposed legislation was finalized and then placed before the House (Parliament), the powers of the Executive, as such, came to an end; the legislature took over---Although the Rules of Business, 1973 covered legislative work, but said Rules did not confer power on the Executive to enact legislative measures---All statutory rules, including those of a fiscal nature, were subordinate legislation---Power to enact subordinate legislation had to be conferred by substantive law; the Rules of Business, 1973 which merely regulated procedural modalities, could not conceivably do so. (k) Rules of Business, 1973 --- ----R. 7(2) & Sched. IV---Power of Secretary of a Division to authenticate by signature all orders and other instruments made, or executed, in the name of President---Such power was a purely formal power---Exercise of such power established the genuineness of the document, it did not confer the statutory power to issue such a document. (l) Constitution of Pakistan--- ----Art. 97---Extent of executive authority of the Federation---Scope---Use of the phrase "subject to the constitution" in Art.97 of the Constitution---Connotation---Said phrase indicated that the executive authority of the Federation, as exercised by the Federal Government, was subordinated to the constitutional schema in relation to the conferment of constitutional powers and responsibility on the three organs of the State. (m) Constitution of Pakistan --- ----Art. 98---Parliament conferring functions on subordinate authorities on the recommendation of the Federal Government-- -Scope---Designated functions could only be conferred on officers or authorities who were subordinate to the Federal Government; they could not be conferred on private entities or companies. (n) Legislation--- ----Subordinate legislation---Fiscal notifications---Regulation and issuance of fiscal notifications was in the nature of subordinate legislation (o) Pakistan Telecommunication (Re-Organization) Act (XVII of 1996)--- ---- S. 2 (fa)---Constitution of Pakistan, Art. 90---Definition of "Federal Government" as given under S.2(fa) of the Pakistan Telecommunication (Re-Organization) Act, 1996---Vires---In terms of Article 90 of the Constitution "Federal Government" meant the Prime Minister and the Ministers---Whereas S.2(fa) of the Pakistan Telecommunication (Re-Organization) Act, 1996 defined the "Federal Government" as being the Ministry of Information Technology and Telecommunication for purposes of the said Act---Constitutionality---Statutory definition must yield before the provisions of the Constitution--- Statutory definition of "Federal Government" provided under the Pakistan Telecommunication (Re-Organization) Act, 1996 was, thus, clearly violative of Art.90 of the Constitution and, therefore, was ultra vires and a nullity. (p) Constitution of Pakistan--- ----Art. 89 --- Power of the President to promulgate Ordinance --- Nature of such power was legislative, since it contemplated a change, or alteration, in the corpus of laws in the country; it was not quasi-legislative power. (q) Words and phrases--- ----"Government"---Connotation---Word "government", in its normal connotation, was equivalent to the term "Executive". (r) Constitution of Pakistan--- ----Art. 91---"Cabinet"---Scope---Cabinet was a composite concept and its components were the Prime Minister and the Federal Ministers. (s) Rules of Business, 1973 --- ----R. 16(2)---Constitution of Pakistan, Art. 91---Power of Prime Minister to by-pass the Cabinet---Vires of---Prime Minister could not exercise the powers of the Cabinet by himself---Prime Minister executed policy decisions, he did not take them by himself---Rule 16(2) of the Rules of Business, 1973 which enabled the Prime Minister to dispose of matters by by-passing the Cabinet was, thus, ultra vires (the Constitution). Prime Minster was the head of the Cabinet. He was the single most important person in the Cabinet, but he did not stand in the position of the Cabinet. He was neither a substitute nor a surrogate for the Cabinet. He could not exercise its powers by himself. The reason that he could not stand in the position of the Cabinet was because the Cabinet was, in fact, the Federal Government. Treating the office of the Prime Minister as being equivalent to that of the Cabinet,would mean that the Prime Minister, by himself, as a single individual, would become the Federal Government. This was simply inconceivable. Function of the Chief Executive (Prime Minister) was to execute and implement the policy decisions taken by Cabinet i.e. the Federal Government. Chief Executive executed policy decisions; he did not take them by himself. The Prime Minister could not take decisions by himself, or by supplanting or ignoring the Cabinet because the power to take decisions was vested with the Federal Government i.e. the Cabinet, and unilateral decisions taken by him would be a usurpation of power. Decisions of the Federal Government were the decisions of the Cabinet and not of the Prime Minister. Any decisions taken by the Prime Minister on his own initiative lacked the authority of the law or the Constitution. Rule 16(2) which enabled the Prime Minister to dispose of matters by by-passing the Cabinet was, thus, ultra vires (the Constitution). (t) Constitution of Pakistan--- ----Arts. 82(3), 83, 84, 86 & 91---Prime Minister---Discretionary governmental spending/expenditure---Authorization by Cabinet --- Any discretionary spending at the initiative of the Prime Minister alone was manifestly unconstitutional and contrary to law---Prime Minister could not make fiscal changes on his own and nor could he engage in discretionary spending by himself---In all such cases the prior decision of the Cabinet was required, since it was unambigiously that body alone which was the Federal Government---Ex post facto approval (of expenditure) by the Cabinet would not suffice since money once spent could not be unspent---All discretionary spending without the prior approval of the Cabinet was contrary to law and would make the Prime Minister personally responsible for such action. Action against distribution of development funds by Ex-Prime Minister Raja Pervaiz Ashraf (PLD 2014 SC 131) ref. (u) Constitution of Pakistan--- ----Arts. 89 & 91---Power of President to promulgate Ordinance---Scope---Prior approval of the Cabinet---Ordinance making power could only be exercised after a prior consideration by the Cabinet---Ordinance issued without the prior approval of the Cabinet was not valid. (v) Constitution of Pakistan --- ----Arts. 70 & 91---Introduction of Bill in Parliament---Approval by Cabinet---No bill could be moved in Parliament on behalf of the Federal Government without having been approved in advance by the Cabinet---Cabinet had to be given a reasonable opportunity to consider, deliberate on and take decisions in relation to all proposed legislation, including a Finance Bill or an Ordinance or an Act---Actions by the Prime Minister on his own, in such regard, were not valid and would be ultra vires the Constitution. (w) Constitution of Pakistan ----Arts. 77, 90 & 98---Rules of Business, 1973, Rr.3(3), 4(2), 16 & 27---Sales Tax Act (VII of 1990), Ss. 3(2)(b), 3(6), 4(c), 8(1)(b), 13(2)(a) & 71---Exemption from sales tax, withdrawal/modification of---Notifications issued on the basis of the approval of the Secretary and the Advisor of the relevant Division---Constitutionality---Secretary or Advisor did not have any power to make subordinate or delegated legislation---Such power had been conferred solely and exclusively on the Federal Government in terms of S.3 of the Sales Tax Act, 1990---Neither the constitutional provisions, nor the Rules of Business, 1973 conferred power on a Secretary or head of a Division, to be treated as the Federal Government---Secretary of the Revenue Division was not empowered under R.4(2) read with R.3(3) of the Rules of Business, 1973 to issue notifications pertaining to modifications of tax merely because the subject fell within the scope of his responsibilities--- Although the Rules of Business, 1973 covered legislative work, but said Rules did not confer power on the Executive to enact legislative measures---Rules of Business, 1973 neither conferred a power to make fiscal changes, nor could they, on any meaningful interpretation of the Constitution, conceivably confer such a power---Parliament could confer functions on subordinate authorities on the recommendation of the Federal Government, in terms of Art.98 of the Constitution, however said provision did not contemplate the transfer of legislative powers of any nature whatsoever to subordinate officials--- Levy of tax was the function of Parliament---Giving such function/power to the Executive per se, would amount to a negation of the doctrine of parliamentary supremacy and the doctrine of separation of powers---Breach of R.16 of the Rules of Business, 1973 by the Government in issuing the notifications for withdrawal/modification of exemption from sales tax was fatal to the case of the Government---Consequently the impugned notifications were declared ultra vires and were struck down---Appeal was allowed accordingly. Article 77 of the Constitution only enabled the levy of tax under law. Levy of a tax inevitably implied a restriction of a citizen's right to property. Payments of tax amounted to a corresponding deprivation of property and, since the right to property was a fundamental right, this could only be done by means of strict compliance with the law. Breach of Rule 16 of the Rules of Business, 1973 by the Government in issuing the notifications for withdrawal/modification of exemption from sales tax was fatal to the case of the Government. Concept of 'business of Government' included not merely executive matters but also those which pertained to legislation. Rule 27 of the Rules of Business, 1973 stipulated that the Division concerned shall be responsible for determining the contents of the proposed legislation and for consultation with other Divisions. All this was part of the legislative business which was governed by the Rules of Business, 1973, however, once the proposed legislation was finalized and then placed before the House (Parliament), the powers of the Executive, as such, came to an end; the legislature took over. Although the Rules of Business, 1973 covered legislative work, but said Rules did not confer power on the Executive to enact legislative measures. All statutory rules, including those of a fiscal nature, were subordinate legislation. Power to enact subordinate legislation had to be conferred by substantive law; the Rules of Business, 1973 which merely regulated procedural modalities, could not conceivably do so. Chairman, Federal Board of Revenue (FBR), who was the ex officio Secretary of the Revenue Division was not empowered under Rule 4(2) read with Rule 3(3) of the Rules of Business, 1973 to issue notifications pertaining to modifications of tax merely because the subject fell within the scope of his responsibilities. Mere fact that a certain Division was going to deal with a specified subject in terms of the Rule of Business, 1973, did not confer any extra, or additional, constitutional or statutory powers on the said Division. The conferment of power, the exercise of power and the formal notification of the exercise of power were all independent (albeit interlinked) concepts. Chairman FBR, in his capacity as Secretary to the Revenue Division could no doubt make proposals pertaining to modification of tax policy. He could either directly, or through his subordinate officials, process proposals. However, the Chairman's power did not extend any further. The power to make fiscal changes was a substantive power, and moreover, one of great constitutional importance. The Rules of Business, 1973 neither conferred such a power, and nor could they, on any meaningful interpretation of the Constitution, conceivably confer such a power. If the Rules of Business, 1973 were to be amended to purportedly confer such a power, the amendment would be clearly ultra vires. Neither the Secretary, nor the Advisor, had any power to make subordinate or delegated legislation. This power had been conferred solely and exclusively on the Federal Government in terms of section 3 of the Sales Tax Act, 1990. Indeed it could not have been conferred on any other subordinate authority, or body, without violating the Constitution. Certain powers had been conferred on the Federal Government under the Sales Tax Act, 1990. The conferment of such a power on any other authority would be clearly unconstitutional. It was up to the Federal Government to allocate, through the modality of the Rules of Business, 1973 which of the different Divisions was to deal with the matter. But this did not mean that the Revenue Division had been transformed into the Federal Government. Secretary of the Revenue Division had full power and authority to process a case relating to fiscal matters. Once he had processed it, he then had to forward it, in accordance with the normal constitutional channels, to the Federal Government, for decision. In other words, the decision would then be taken by the Cabinet comprising of the Prime Minister and the Ministers. The mere fact that the Secretary of the Revenue Division had processed the case did not elevate his status to that of the Federal Government. Neither the constitutional provisions, nor the Rules of Business, 1973 conferred power on a Secretary or head of a Division, to be treated as the Federal Government. Article 98 of the Constitution provided that the Parliament could confer functions on subordinate authorities on the recommendation of the Federal Government, however said provision did not contemplate the transfer of legislative powers of any nature whatsoever to subordinate officials. All it permitted was the discharge of certain functions by designated officials. The transfer of legislative powers would be a clear cut violation of the structure of the Constitution and the concept of separation of powers. Levy of tax was the function of Parliament under Article 77 of the Constitution. Such powers, if given to the Executive per se, would amount to a negation of the doctrine of parliamentary supremacy and the doctrine of separation of powers. Secretary, a Minister or the Prime Minister were not the Federal Government and the exercise, or purported exercise, of a statutory power exercisable by the Federal Government by any of them, especially, in relation to fiscal matters, was constitutionally invalid and a nullity in the eyes of the law. Fiscal notifications enhancing the levy of tax issued by the Secretary, Revenue Division, or the Minister, were ultra vires. Consequently the impugned notifications were declared ultra vires and were struck down. Appeal was allowed accordingly.