Summary: Constitution of Pakistan, 1973—Arts. 141, 142(a), 142(c), 143, 175F(3), 185(3)—Constitution (Eighteenth Amendment) Act, 2010—Constitution (Twenty-Seventh Amendment) Act, 2025—Excise Duty on Minerals (Labour Welfare) Act, 1967—S. 3—Balochistan Finance Act, 2020—S. 7—Legislative competence—Provincial autonomy—Labour welfare—Excise duty on minerals—Doctrine of pith and substance—Doctrine of double aspect legislation—Cooperative federalism—The Federal Constitutional Court considered whether the amendment made through S. 7 of the Balochistan Finance Act, 2020 to S. 3 of the Excise Duty on Minerals (Labour Welfare) Act, 1967, enhancing the rate of duty on minerals, was beyond the legislative competence of the Provincial Assembly of Balochistan on the ground that duties of excise fall within the exclusive federal domain under Entry 44 of the Federal Legislative List. The Court held that, after the Eighteenth Amendment, legislative power is distributed such that the Federation legislates only on subjects enumerated in the Federal Legislative List, while residual subjects vest exclusively in the Provinces; labour welfare, not being part of the Federal Legislative List, is therefore a provincial subject. The Court further held that the 1967 Act, when read as a whole and especially in light of its preamble, was enacted not merely to impose a fiscal levy, but to finance measures for promoting the welfare of labour employed in the mining industry. Accordingly, although the statutory mechanism employed was the levy and collection of excise duty, the dominant constitutional purpose and essential character of the legislation lay in labour welfare, which squarely fell within provincial competence. The amendment made by the Province was, therefore, not unconstitutional merely because it touched upon a fiscal instrument also known to federal legislative entries. Constitutional law—Doctrine of pith and substance—Incidental encroachment—Validity of legislation—The Court reaffirmed that where legislative spheres appear to overlap, the true nature and character of the impugned law must be determined through the doctrine of pith and substance. A law does not become invalid merely because it incidentally trenches upon a field otherwise assigned to another legislature; only a substantial encroachment disturbing the constitutional distribution of powers may render it ultra vires. Applying that doctrine, the Court held that the impugned provincial amendment did not amount to an impermissible invasion of federal legislative authority, because its real object was to support labour welfare in the mining industry and the enhancement of the levy was only a means adopted to advance that constitutionally legitimate provincial purpose. Constitutional law—Doctrine of double aspect legislation—Same subject viewed from different constitutional aspects—The Court also invoked the doctrine of double aspect legislation and explained that a single subject may, in one aspect and for one purpose, fall within federal competence, and in another aspect and for another purpose, fall within provincial competence. Thus, while the levy of excise duty as a fiscal subject may ordinarily fall within the federal domain, the same measure, when examined from the standpoint of labour welfare and public interest in relation to mine workers, may validly operate within the provincial sphere. In such circumstances, both legislative aspects may co-exist in constitutional harmony, and the Court should prefer an interpretation that sustains rather than destroys legislation enacted by democratically elected bodies. Federalism—Post-Eighteenth Amendment constitutional structure—Cooperative federalism—The Court emphasized that the post-Eighteenth Amendment constitutional arrangement broadens provincial autonomy and reflects a commitment to participatory and cooperative federalism. The Federation and Provinces are not to be viewed as functioning in isolated compartments; rather, constitutional interpretation should favour harmonious operation of their respective powers. A rigid or formalistic reading that disregards the practical interaction of fiscal measures and welfare objectives would be inconsistent with the constitutional design. The impugned amendment, therefore, was held to represent a lawful and harmonious exercise of legislative power in furtherance of a legitimate provincial objective. Case references—Prafulla v. Bank of Commerce (AIR 1947 PC 28); Multiple Access v. McCutcheon (1982 CanLII 55 (SCC)); Sui Northern Gas Pipelines v. S.K. Pvt Limited (2025 SCMR 570); DG Khan Cement v. The Province of Punjab (2014 PTD 478); Pakistan College of Law v. University of the Punjab (W.P. No. 45178 of 2017, Lahore High Court). Petition dismissed—Leave refused—The Federal Constitutional Court held that the amendment introduced by S. 7 of the Balochistan Finance Act, 2020 did not fall outside the legislative competence of the Provincial Assembly of Balochistan. The petition was accordingly dismissed, leave was refused, and no order as to costs was made.

Summary: (a) Constitution of Pakistan ----Arts. 142, 184, 270-A, Fourth Schedule (Entries 2 & 50), Eighteenth Amendment—Legislative competence—Levy and collection of tax on immovable property—Jurisdiction of Federation and Cantonment Boards—Effect of constitutional amendments. Tax on immovable property, including tax on annual rental value, has historically been a provincial subject. The legislative competence to levy, charge, or recover such tax was never vested in the Federation except during the Martial Law period through the promulgation of the *Cantonments (Urban Immovable Property Tax and Entertainment Duty) Order, 1979 (P.O. 13 of 1979)*. The Sindh High Court, tracing legislative history from the Government of India Act, 1935 to the Constitution of 1973, held that after the restoration of the Constitution in 1985 and the 18th Amendment, the subject of property tax reverted exclusively to the Provinces. Consequently, the Federation and all Cantonment Boards lacked competence to impose any such tax, the field being expressly excluded from the Federal Legislative List (Entry 50) and reserved for the Provinces under Art. 142(c). (b) Constitutional law ----Art. 270-A—Validation of laws enacted during Martial Law—Scope and limitation—Protection of Presidential Orders—Applicability of Benazir Bhutto case. Presidential Orders issued between 1977 and 1985 were granted temporary protection under Art. 270-A and the Seventh Schedule but lost their efficacy after the restoration of the Constitution and the 18th Amendment. Following the principle laid down in *Benazir Bhutto v. Federation of Pakistan* (PLD 1988 SC 416), laws protected by Art. 270-A could not override the Constitution or survive beyond the cut-off date. The Court reaffirmed that P.O. 13 of 1979, enacted when the Constitution was in abeyance, stood eclipsed and could not continue to authorize taxation in cantonment areas after constitutional restoration. (c) Cantonment Act, 1924 ----Ss. 60, 80, 106 & 109—Scope—Taxation powers of Cantonment Boards—Requirement of federal sanction and publication—Effect of August 2023 amendment. Section 60 empowers Cantonment Boards to impose only those taxes which may lawfully be imposed by a municipality in the province and only with the *previous sanction of the Federal Government* and publication in the official gazette. In the absence of an existing provincial levy, such power cannot be exercised. The 2023 amendment inserting the term “fee” into Section 60 did not expand the scope to authorize new levies; fiscal statutes must be strictly construed. Moreover, as per *Mustafa Impex v. Government of Pakistan* (PLD 2016 SC 808), prior sanction of the Federal Cabinet, not a Division, is mandatory. The amendment delegating such sanction to a Division was held inconsistent with democratic and constitutional principles. (d) Constitutional interpretation ----Entry 2, Fourth Schedule—Not a taxing entry—Entry 50 exclusive field—Distinction between taxes and fees. Entry 2 of the Fourth Schedule, often cited by Cantonment Boards, is a general administrative entry concerning federal subjects and does not include power to tax. Taxing entries are exhaustively enumerated from 43 to 53. The levy under discussion being a charge on immovable property clearly falls under Entry 50, which, post-18th Amendment, excludes immovable property from federal jurisdiction. Argument that the levy was a “fee” under Entry 54 or S.200 of the Cantonment Act was also rejected as the exhaustive list of permissible fees therein does not cover annual rental value of property, and the principle of *quid pro quo* was not satisfied. (e) Provincial legislation ----Sindh Urban Immovable Property Tax Act, 1958—Continuity and supremacy—Applicability to cantonment areas. The Sindh Urban Immovable Property Tax Act, 1958, enacted prior to the 1979 Presidential Order, remains the governing statute for property tax within the province, including cantonment areas. Following *Pakistan v. Province of Punjab* (PLD 1975 SC 37) and *Gulzar Cinema v. Cantonment Board* (PLD 1978 Kar. 500), cantonment areas located within a province are subject to provincial taxation statutes, as they do not constitute federal territory. (f) Fiscal jurisprudence ----Distinction between tax and fee—Purpose of levy—Cantonment funds—Effect of routing revenue. The fact that amounts collected were deposited into Cantonment Funds under Ss.106–109 of the Cantonment Act does not alter the nature of the levy. A tax remains a tax regardless of the fund in which it is credited. Reliance on *Workers Welfare Fund* and *GIDC* cases was misplaced, as those levies were upheld as fees due to specific quid pro quo mechanisms, which are absent here. (g) Discrimination and equality before law (Arts. 25 & 77) ----Differential taxation between municipalities and cantonments—Classification—Validity. Different rates of taxation for identical properties situated across municipal and cantonment boundaries were held discriminatory and violative of equal protection principles. A uniform regulatory framework under provincial supervision was necessary to prevent arbitrary classifications and ensure parity in valuation and assessment. (h) Disposition— Petitions allowed. It was declared that— (i) After the Eighteenth Amendment, the Federation and Cantonment Boards have no competence, power, or jurisdiction to levy, charge, impose, or recover any tax on immovable property, including tax on annual rental value. (ii) The Province of Sindh alone has legislative and fiscal authority over the subject. (iii) All amounts collected under the impugned levy since the 18th Amendment are liable to accounting and reconciliation by the provincial government. (PLD 1975 SC 37; PLD 1978 Kar. 500; PLD 1988 SC 416; PLD 2016 SC 808; 2022 Peshawar 46; 2023 SCMR — Cantonment Board case, 13.10.2023, followed).