| Case ID |
1f686187-6f99-4ced-a97e-3f3a5b0c16b4 |
| Body |
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| Case Number |
F.E.R.A. No. 04 of 2021 |
| Decision Date |
May 25, 2022 |
| Hearing Date |
Feb 28, 2022 |
| Decision |
The Islamabad High Court ruled that the relationship between Pakistan Television Corporation (PTV) and its subsidiary Shalimar Recording and Broadcasting Company (SRBC) did not constitute a franchise under Section 2(12a) of the Federal Excise Act, 2005. The Court found that the necessary ingredients to infer a franchise were not met, particularly the requirement that the product or service be identified with the franchiser. The Court highlighted that mere labels such as 'technical fee' or 'fee for technical assistance' do not establish a franchise relationship. The judgment emphasized that although there was a parent-subsidiary relationship, this alone does not imply a franchiser-franchisee relationship for the purposes of the Federal Excise Act. Consequently, the Court allowed the reference application and ruled in favor of the applicant. |
| Summary |
In the case of F.E.R.A. No. 04 of 2021, the Islamabad High Court addressed the issue of whether the relationship between Pakistan Television Corporation (PTV) and its subsidiary Shalimar Recording and Broadcasting Company (SRBC) constituted a franchise as defined under the Federal Excise Act, 2005. The Court evaluated the necessary elements required to establish a franchise, including authority from the franchiser, rights acquired by the franchisee, identification of the service or product with the franchiser, and the fee charged for such services. The Court concluded that the services provided by PTV to SRBC did not meet the criteria for a franchise, particularly the identification requirement, thus ruling in favor of the applicant. This case highlights the importance of understanding the legal definitions and relationships within corporate structures, especially in terms of taxation and regulatory compliance. Keywords: Federal Excise Act, franchise definition, Islamabad High Court, corporate law, taxation. |
| Court |
Islamabad High Court
|
| Entities Involved |
Pakistan Television Corporation,
Commissioner Inland Revenue,
Shalimar Recording and Broadcasting Company
|
| Judges |
Sardar Ejaz Ishaq Khan
|
| Lawyers |
Hafiz Muhammad Idrees,
Syed Farid Ahmed Bukhari,
Babar Bilal,
Muhammad Khurram,
M. Sarim Bhatti
|
| Petitioners |
Pakistan Television Corporation through Company Secretary
|
| Respondents |
Commissioner Inland Revenue (Audit-V), Large Taxpayers Office and 4 others
|
| Citations |
2023 SLD 39,
2023 PTD 102,
2023 PTCL 448
|
| Other Citations |
Honda Atlas Car Pakistan Ltd. v. Federation of Pakistan and others 2016 PTD 1328,
Lt. Col. Nawabzada Mohammad Amir Khan v. The Controller of Estate Duty PLD 1961 SC 119,
Abdul Haq Khan and others v. Haji Ameerzada and others PLD 2017 SC 105,
1999 SCMR 138,
2007 SCMR 1367,
PLD 1987 SC 213,
PLD 1973 SC 49,
PLD 1994 SC 894
|
| Laws Involved |
Federal Excise Act, 2005
|
| Sections |
2(12a),
34A
|