| Case ID |
1f1dc927-1ad7-4595-ad3e-c1e7b7cafeeb |
| Body |
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| Case Number |
Constitutional Petition No. 325 of 1994 |
| Decision Date |
Nov 11, 1996 |
| Hearing Date |
Oct 31, 1996 |
| Decision |
The court dismissed the petitions, ruling that the legislature had not exceeded its jurisdiction in enacting section 80-D of the Income Tax Ordinance, 1979. The court found that income tax could be levied at a rate of 0.5% on the turnover of companies and registered firms, thereby expanding the tax base and addressing tax evasion. The petitioners, who were claiming losses, were deemed liable for income tax on their turnover, emphasizing the concept of presumptive taxation and the interpretation of 'income' in a broader context. The judgment underscored the importance of legislative intent and the constitutional validity of tax laws. |
| Summary |
In the case of Constitutional Petition No. 325 of 1994, the Balochistan High Court examined the validity of section 80-D of the Income Tax Ordinance, 1979, which imposed a minimum tax on companies and registered firms based on turnover rather than profit. The petitioners argued that this section was ultra vires the Constitution of Pakistan, as it imposed tax without considering actual profits or losses. The court, however, upheld the section, stating that the definitions of income in the ordinance and the constitution allowed for a broader interpretation that included deemed income. This case is significant as it highlights the principles of presumptive taxation and the legislative powers of the federal government to enact tax laws aimed at widening the tax base and preventing evasion. The ruling also reinforces the importance of statutory interpretation in understanding the scope of tax obligations, particularly in the context of businesses reporting losses while still being liable for tax based on their turnover. The decision serves as a precedent for how tax authorities can apply tax laws in a manner that balances revenue collection with the realities of business operations. |
| Court |
Balochistan High Court
|
| Entities Involved |
Gatron (Industries) Limited,
THE FEDERATION OF PAKISTAN
|
| Judges |
IFTIKHAR MUHAMMAD CHAUDHRY,
MIR MUHAMMAD NAWAZ MARRI
|
| Lawyers |
Mr. Iqbal Naeem Pasha,
Raja Rab Nawaz,
Mr. Sheikh Haider,
Mr. Nasrullah Awan
|
| Petitioners |
Messrs Gatron (Industries) Limited
|
| Respondents |
THE FEDERATION OF PAKISTAN
|
| Citations |
1997 SLD 475,
1997 PTD 1077,
1997 PCTLR 1064,
(1997) 75 TAX 300
|
| Other Citations |
AIR 1930 PC 209,
(1971) 82 ITR 794,
Mst. Samina Shaukat Ayub Khan v. Income Tax Officer PLD 1981 SC 85,
Pakistan Industrial Development Corporation v. Pakistan through Secretary of Finance 1992 SCMR 891 = 1992 PTD 576
|
| Laws Involved |
Income Tax Ordinance, 1979,
Constitution of Pakistan, 1973
|
| Sections |
25,
18,
260,
24,
80D,
8,
Fourth Schedule,
13,
2nd Schedule,
2(24)(c),
12(l),
19(4),
22(a),
59C(a),
18(2),
18A(1A)(b),
18AA(1),
18B,
18C,
18CC
|