The top court of the country, on August 18, had struck down a notification for withdrawing exemption on sales tax to the companies, importing cellular phones and textile goods in the country.
It is pertinent to mention that SRO 682(I)/2013 had enhanced sales tax from 5 to 17 per cent on supplies of industrial inputs outside five export-oriented sectors including textiles whereas SRO. No 280 (I)/2013 and 460(I)/2013 had enhanced sales tax on the imported cellular phones.
Withdrawal and modification (in the rate) of sales tax were challenged in the Islamabad High Court with a plea that such notifications had not been issued by the federal government in accordance with Section 3 of the Sales Tax Act, 1990.
In response to the rejection of pleas by the IHC, the appellants challenged the verdict before Supreme Court to which the apex court on August 18, while announcing its 80-page reserved judgement, ruled that fiscal notification enhancing the levy of tax issued by the Secretary Revenue Division, or the Minister are ultra vires.
The verdict also said, “Neither a Secretary, nor a Minister and nor the Prime Minister are 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, is constitutionally invalid and a nullity in the eyes of the law,” says the judgement.
Consequently, the federal government urged the Supreme Court to revisit its verdict in the matter with a plea that a constitutionally powerful Prime Minister can exercise his powers to run the government affairs.
Resuming the hearing of the federal government’s review petition in the matter, a three-judge bench led by Justice Mian Saqib Nisar observed that Rules of Business cannot overrule constitutional provisions.
After hearing the arguments of Additional Attorney General Waqar Rana in the matter, the bench dismissed the review petition.
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