| Case ID |
03e37c21-4efb-4dfe-8ab1-ab7ec1be2fde |
| Body |
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| Case Number |
Writ Petition No. 12975 of 1997 |
| Decision Date |
Apr 15, 1998 |
| Hearing Date |
|
| Decision |
The Lahore High Court found that Rule 8(2)(c)(i) of the Wealth Tax Rules, 1963 was discriminatory and ultra vires. The court ruled that the method for valuing shares of joint stock companies quoted on a recognized stock exchange should be the lower of face value or break-up value, while for unquoted companies, it should be the higher of the two. The authorities were directed to calculate and levy tax based on the market value of all such shares, thereby ensuring that the taxation aligns with the actual market conditions and does not impose arbitrary values. |
| Summary |
This case revolves around the interpretation of Rule 8(2)(c)(i) of the Wealth Tax Rules, 1963, which was challenged for being discriminatory against unlisted companies compared to listed ones. The Lahore High Court's decision emphasized the need for a fair valuation method in accordance with market values, thereby highlighting issues of equity and fairness in tax law. The ruling is significant for shareholders and tax practitioners, as it sets a precedent for how shares should be valued for tax purposes, potentially affecting wealth tax assessments across Pakistan. This case is pivotal for understanding the application of the Wealth Tax Act and the constitutional provisions that protect against arbitrary taxation. It underscores the importance of aligning tax laws with market realities and ensuring that tax liabilities are equitable for all taxpayers, particularly in the context of evolving financial regulations. |
| Court |
Lahore High Court
|
| Entities Involved |
Not available
|
| Judges |
Malik Muhammad Qayyum, Justice
|
| Lawyers |
Imtiaz Rashid Siddiqui,
Imran Anjum Alvi,
Muhammad Ilyas Khan
|
| Petitioners |
Munir Ahmad and 1 Others
|
| Respondents |
Federation of Pakistan through Secretary Finance, Islamabad and 3 Others
|
| Citations |
1998 SLD 590,
1998 PTD 3900,
(1998) 78 TAX 217
|
| Other Citations |
PLD 1997 SC 582,
1997 PTD 1555
|
| Laws Involved |
Constitution of Pakistan, 1973,
Wealth Tax Rules, 1963
|
| Sections |
25,
199,
8(2)(c)(i)
|