3757/2013 Const. P. Yaqoob Ahmed (Petitioner) V/S Fed. of Pakistan and Ors (Respondent)

3757/2013 Const. P. Yaqoob Ahmed (Petitioner) V/S Fed. of Pakistan and Ors (Respondent) Sindh High Court

Bench: Hon'ble Chief Justice Mr. Justice Aqeel Ahmed Abbasi(Author), Hon'ble Chief Justice Mr. Justice Muhammad Junaid Ghaffar Order Date: 02-JUL-20

A Divisional Bench of this Court comprising of Mr. Justice Aqeel Ahmed Abbasi and Mr. Justice Muhammad Junaid Ghaffar, has pronounced the judgment on 02.07.2020, filed by large number of petitioners, whereby, imposition of Income Support Levy at the rate of 0.5% on the value of Net Moveable Assets, through Income Support Levy Act, 2013, has been challenged for being ultravires to Constitution, as according to petitioners, subject levy did not possess the characteristic of a tax, therefore, could not be introduced through Finance Act 2013, along with Money Bill in terms of Article 73 of the Constitution of Islamic Republic of Pakistan, 1973. The subject levy was also challenged for being violative of the provisions of Article 25 of the Constitution of Islamic Republic of Pakistan, as according to petitioners, Income Support Levy is discriminatory in nature, as it creates unreasonable classification between the same class of persons having Net Moveable Assets exceeding Rs.1.00 Million. The Hon?ble Divisional Bench of this Court, after having examined in detail all the constitutional and legal points involved in these petitions, has been pleased to allow the petitions in the following terms:- (i) The levy imposed through Income Support Levy Act, 2013 alongwith Money Bill, does not possess the characteristics of a tax, as it is not a common burden for raising revenue to be utilized for general public purpose, on the contrary, it is a levy in the nature of fund to be charged and utilized for a specific purpose i.e. ?to provide for financial resources for raising an income support fund for the economically distressed persons and their families?. Accordingly, the Income Support Levy Act, 2013, could not be introduced through Finance Act, 2013, in terms of Article 73 of the Constitution of Islamic Republic of Pakistan, 1973, the same is hereby declared to be ultra vires to the Constitution of Islamic Republic of Pakistan, 1973. (ii) The levy imposed through Income Support Levy Act, 2013, is hereby declared to be ultravires to the Constitution for being discriminatory, as it creates unreasonable classification within the same class of person i.e. persons having Net Moveable Wealth exceeding Rs.1.00 M (One Million), whereas, its incidence and charge of levy falls un-equally upon the existing taxpayers only, who file or required to file Wealth Statement under Section 116 along with their Income Tax Return under Section 115 of the Income Tax Ordinance, 2001, , however, non-existing taxpayers, who are not required under law, or do not file their Wealth Statement along with Income Tax Return, inspite of having much higher Net Moveable Wealth, exceeding Rs.1.00 M (One Million), have been excluded from the incidence and charge of such levy, which is in clear violation of Article 25 of the Constitution of Islamic of Pakistan, 1973. (iii) All the Notices and the proceedings, including assessment order(s) passed under Section 5 of the Income Support Levy Act, 2013 after repeal of the Income Support Levy Act, 2013, under clause 10 of the Finance Act, 2014, in the absence of any saving or validation clause to protect or validate the Income Support Levy Act, 2013 are hereby declared to be without jurisdiction and lawful authority.