Summary: The charging provision, Section 3 of the Act, as amended by Section 14 of the Finance Act, 2024, makes the cess payable on the transportation, carriage, or movement of goods within, into, out of, or through the Province. The rate of cess is to be determined either ad valorem or on prescribed basis, and its proceeds are credited to the Provincial Consolidated Fund to be utilized exclusively for the maintenance and development of infrastructure. A close reading of Section 3 reveals that the charging event is the movement of goods whether produced, traded, imported, or exported across the infrastructure of the Province. The measure of the levy, however, is linked to the value of the goods as determined under the Sales Tax Act or the Customs Act. This distinction between the event that attracts liability and the standard used for quantification is crucial. The adoption of a federal valuation standard is merely an administrative convenience; it does not define the Constitutional Law character of the levy. In this backdrop, the determination of legislative competence must proceed by first identifying the true object and substance of the impugned IDC Act and then juxtaposing it against the fields expressly reserved to the Federation. The relevant entries of the Federal Legislative List: Entry 24 (Carriage of passengers and goods by sea or by air), Entry 27 (Import and export across customs frontiers, inter-provincial and international trade and commerce), and Entry 43 (Duties of customs, including export duties) define the outer boundaries of federal fiscal jurisdiction. Read together, these entries secure to Parliament the power to legislate on trade, transport, and taxation at the frontiers of the Federation and between Provinces. The jurisprudence on fiscal measures akin to the IDC Act reveals that levies imposed on the movement or entry of goods within a province or local area, even where assessed on an ad valorem basis and collected in a manner similar to customs duty, have consistently been upheld as Constitutional Lawly valid provincial impositions. In Universal Merchants, the levy of Octroi under the West Pakistan Municipal Committee Octroi Rules, 1964 charged on goods imported for consumption, use, or sale within municipal limits and collected “as if it were a customs duty” was sustained on the ground that its pith and substance related not to customs or importation but to local entry and use of goods. The Divisional Bench of the learned Sindh High Court held that although imported goods might incidentally cross federal frontiers, the taxable event was their entry for consumption within municipal boundaries, a matter squarely within the provincial field. This reasoning was reiterated in Shershah Industries and Hyderi Ship Breaking, where Octroi on imported scrap brought into Karachi was again upheld, the Court held that unless equated with customs duties, such local cesses remained valid provincial levies under Article 142(c). In any Constitutional Law scheme where the Federation and the Provinces either share legislative competence or there exists a division of legislative fields, incidental encroachment by one legislature upon the domain of the other is, at times, inevitable. The Constitutional Law framework through the Government of India Act, 1935, envisaged three lists relating to the legislative fields of the Provinces as well as the Federation, and this phenomena was visualized by Sir Maurice Gwyer C.J. said in 1940 F.C.R. 188 that “It must inevitably happen from time to time that legislation though purporting to deal with a subject in one list, touches also upon a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee, whereby the impugned statue is examined to ascertain its pith and substance or its true nature and character for the purpose of determining whether it is legislation with respect to matters in this list or in that.” Similarly, it was also a consistent view that where necessary, recourse could be taken to the doctrine of “pith and substance” for resolving the conflict. It was in this context that their lordships, in the case concerning the Central Province and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (AIR 1939 FC 1), declined to extend the scope of excise duty beyond the process of manufacture or production of goods. Having regard to the foregoing principles, it becomes evident that in assessing the validity of a fiscal enactment, the Constitutional Law focus must remain on its object and substance, rather than on the measure or machinery employed for assessment or collection. Fiscal statutes, by their very nature, often adopt valuation standards or administrative procedures from other enactments, such borrowing, however, does not determine legislative character. A provincial law may conveniently draw upon federal valuation criteria, such as those found in the Customs or Sales Tax Acts, without thereby assuming the Constitutional Law colour of those enactments. What is determinative is the purpose for which the levy is imposed. This distinction was clearly articulated by the Privy Council in Prafulla Kumar, wherein it was observed: [37] Subjects must still overlap and where they do the question must be naked what in pith and substance is the effect of the enactment of which complaint is made and in what list is its true nature and character to be found. If these questions could not be asked, much beneficent legislation would be stifled at birth, and many of the subjects entrusted to Provincial Legislation could never effectively be dealt with. [38] Thirdly, the extent of the invasion by the Provinces into subjects enumerated in the Federal List has to be considered. No doubt it is an important matter, not, as their Lordships think, because the validity of an Act can be determined by discriminating between degrees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act. Its provisions may advance so far into Federal territory as to show that its true nature not concerned with Provincial matters, but the question is not, has it trespassed more or less, but is the trespass, whatever it be, such as impugned Act is not money-lending but promissory to show that the pith and substance of the notes or banking? Once that question is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to its true content. In this backdrop, the determination of legislative competence must proceed by first identifying the true object and substance of the impugned IDC Act and then juxtaposing it against the fields expressly reserved to the Federation. The relevant entries of the Federal Legislative List: Entry 24 (Carriage of passengers and goods by sea or by air), Entry 27 (Import and export across customs frontiers, inter-provincial and international trade and commerce), and Entry 43 (Duties of customs, including export duties) define the outer boundaries of federal fiscal jurisdiction. Read together, these entries secure to Parliament the power to legislate on trade, transport, and taxation at the frontiers of the Federation and between Provinces. Applying the doctrine of pith and substance to the present case, it becomes evident that the IDC Act, when read as a whole, legislates within the legitimate domain of the Province. Its preamble, charging provisions, and fiscal framework collectively reveal that the Act’s dominant purpose is to generate revenue for the maintenance and development of provincial infrastructure. The charging event is the transportation, carriage, or movement of goods within, into, or out of the Province, reflecting a direct nexus with the use of provincial infrastructure rather than the act of import or export itself. The reference to valuation methods under the Sales Tax Act and the Customs Act serves merely as a mechanical standard of assessment and does not alter the nature of the levy. . Universal Merchants v. Commissioner of Karachi (1980 CLC 704). . Shershah Industries Ltd. v. Government of Sindh (PLD 1982 Karachi 653). . Hyderi Ship Breaking Industries v. Sindh Government (2007 MLD 770). . Subramanyam Chettiar v. Mulluswami Coundan (AIR 1941 FC 47). . Prafula Kumar Mukherjee and others v. Bank of Commerce Ltd., Khulna (AIR (34) 1947 Privy Council 60).

Summary: It is evident from the notice dated 12.12.2025 that the Assistant Commissioner was merely suspecting that duty-paid unmanufactured tobacco might be used in the manufacturing of cigarettes. Such suspicion, however, cannot be equated with the statutory requirement of “reasons to believe” as provided under sub-rule (6) of Rule 28-A ibid, for sealing the manufacturing unit of the petitioner. Article 18 of the Constitution of the Islamic Republic of Pakistan, 1973, recognizes the right to freedom of business and profession, subject to certain regulations. Such regulations, as well as any executive action or intervention in lawful trade, are obviously subject to judicial review by the superior courts. Any misuse or excess of authority by the executive can be corrected by a Constitutional Law court through the issuance of appropriate directions, ensuring that the lawful trade conducted by citizens of Pakistan is not unnecessarily hindered. A Constitutional Law petition is competent if an order is passed by a court or authority in excess of its jurisdiction, even where the remedy of appeal or revision against such order is available, depending upon the facts and circumstances of each case.

Summary: In the framework of our jurisprudence, a “Special Court” is a tribunal of limited and exclusive jurisdiction, established by a specific statutory enactment to adjudicate distinct categories of cases that lie outside the general domain of ordinary Civil Law courts. While the term is not explicitly defined in a single statute, its nature is inferred from Article 175 of the Constitution as a forum “established by law,” functioning not through inherent powers but strictly within the “four corners of the jurisdiction” conferred by its enabling statute [Ref: Ghulam Shabbir v. Punjab Special Court 1992 PCr.LJ 1932 Lahore]. Crucially, the creation of such a Special Court acts as an implied bar under Section 9 of CPC, effectively “eclipsing” general Civil Law jurisdiction; as noted by the Apex Court in State Life Insurance v. Sardar Begum [2017 SCMR 999], where a special law provides a separate remedy, general provisions “stand eclipsed.” These courts possess the attributes of a judicial forum—presided over by qualified judges often acting as persona designata rather than in their original capacity [See Ministry of Interior v. Special Court PLD 2020 Islamabad 82—and operate under the maxim generalia specialibus non derogant, meaning their specific procedural mandates prevail over general Civil Law procedure [Ref: M/s Frontier Foundry Steel v. NEPRA 2025 MLD 26 Islamabad]. Thus, a Special Court is an exclusive adjudicatory body where the “ouster of jurisdiction” of general courts is a necessary consequence of its establishment to deal with rights and liabilities unknown to the common law. It is settled law that a Special Court, being a creature of statute, cannot ordinarily extend its jurisdiction beyond the scope of the law creating it. As held in Inayat Ali v. The State [1992 PCr.LJ 1485 Lahore], it is a court of “limited jurisdiction,” and any attempt to exercise powers not expressly conferred would be ultra vires. However, the insertion of Section 12A introduces a novel legal paradigm. By employing the fiction of law through the “deeming clause” in sub-section (3), the Legislature has essentially superimposed the general jurisdiction of a District Judge onto the limited framework of a Special Court for the transferred cases. This creates a unique hybridization: a forum that is structurally a “Special Court” but functionally, for the purposes of the transferred case, deemed to be a “Court of original jurisdiction” with all attendant powers. The “ouster of jurisdiction” that typically defines a Special Court is here conversely met with a “conferment of jurisdiction” by the general Civil Law law (the Ordinance of 1962), effectively piercing the veil of exclusivity that usually surrounds special tribunals.

Summary: On the contrary, the worthy Tribunal, in paragraph 7 of its judgment, placed reliance upon verification from the FBR website, which confirmed that at the time of supply, the supplier, M/s I.G. International, was shown as active. The Tribunal further observed that the respondent had submitted its return electronically, and the system itself allowed the input adjustment without raising any objection regarding the transactions in question. This clearly indicates that the respondent had acted in good faith and in compliance with the law as it stood at the relevant time. Thus, when the blacklisting order was subsequently passed, the matter of input adjustment by the respondent had already attained finality and was a past and closed transaction, incapable of being reopened merely on account of the supplier’s later blacklisting. Moreover, the language of Section 21(3) of the Act does not stipulate the retrospective invalidation of tax invoices that were duly reflected in the FBR record, particularly in cases where the input adjustment claim had already been processed and accepted by the system without objection. This statutory provision is intended to prevent the misuse of invoices from blacklisted suppliers prospectively, but it cannot be stretched to nullify transactions that were validly entered into and recognized by the system at the relevant time. Importantly, this factual aspect of the case has not been disputed in the memo of Reference, nor has any supporting document been produced to challenge the Tribunal’s findings.

Summary: The FBR, through Circular No. 05 of 2021, has provided guidelines for the issuance of a consumption certificate, as reproduced above. Paragraph 3 of Circular No. 05, ibid, in our humble view, transcends the scheme of exemption provided under Entry No. 151. Had the legislature intended to make the encashment of a pay order contingent upon the rejection of an application for a consumption certificate, it would have expressly provided so in clear terms. Similarly, the learned counsel for the respondents could not refer to any provision of law authorizing the FBR to supply an intentional omission or to expand the statutory provisions of the law. The settled principle is that rules are subservient to the parent statute. Ordinances and rules, being subordinate or delegated legislation, are framed under the authority of the parent statute and are therefore subservient to the primary legislation. They cannot contradict, override, or add to the clear provisions of the parent statute. Rules are meant to carry out the purpose of the parent statute and cannot be inconsistent with its provisions. 1 The aforesaid scheme of the Act of 1990 places the burden on the Revenue to establish that the economic activities of a person fall within the charging section, and that the person is liable to pay any tax or charge which has not been levied, paid, or has been short-levied. The recovery provisions of any taxing statute can only be triggered once payability has been established through the scheme of adjudication provided under the statute. It is well settled that every word used by the legislature in a statute must be given its true meaning and the provisions construed together in a harmonious manner. 2 If the arguments of the worthy counsel for the Revenue are accepted, that in the event the consumption certificate is denied to the person importing goods under the concessionary regime, the pay order would be payable, it would amount to something which we would read in statute which the lawmaker has never provided. Therefore, the entry No. 151 ibid would as far as relates to securing the payment of sales tax at import stage is to be harmoniously read along with the scheme of payment of tax when it becomes payable. Obviously, the payability of tax arises after the assessment of the tax liability. 1 Farrukh Raza Sheikh v. The Appellate Tribunal Inland Revenue and others (2022 SCMR 1787); National Electric Power Regulatory Authority vs. Faisalabad Electric Supply Company Limited (2016 SCMR 550); Pakistan through Secretary Finance, Islamabad and 05 others vs. Aryan Petro Chemical Industries (Pvt) Ltd, Peshawar and others vs. (2003 SCMR 370). 2 Collector of Sales Tax and Central Excise (Enforcement) and another vs. Messrs Mega Tech (Pvt) Ltd (2005 SCMR 1166).