| Case ID |
2605bd6a-09ca-4fef-b6ad-ae260d044a9d |
| Body |
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| Case Number |
C.P. No. D-2112 of 2015 |
| Decision Date |
Sep 23, 2015 |
| Hearing Date |
Sep 07, 2015 |
| Decision |
The Sindh High Court ruled in favor of the petitioner, China Harbour Engineering Company Limited, allowing the issuance of an Exemption Certificate that had been withdrawn by the tax authorities. The court determined that the amendments made to sections 152 and 153 of the Income Tax Ordinance through the Finance Act of 2012 were intended to simplify and harmonize the withholding tax regime for Permanent Establishments of Non-Resident persons in Pakistan. The court highlighted that the Federal Board of Revenue had clarified through circulars that the mechanism for payments to Permanent Establishments of Non-Residents was to be included under section 152. The High Court found that the withdrawal of the exemption certificate was invalid as it was issued in accordance with the law prior to the amendments. The court emphasized that the changes made by the Finance Act of 2015 were remedial and should apply retrospectively, thus entitling the petitioner to the exemption certificate during the period prior to 2015 as well. |
| Summary |
In the case of China Harbour Engineering Company Limited vs. Federation of Pakistan, the Sindh High Court addressed the legality of the withdrawal of an Exemption Certificate under the Income Tax Ordinance, 2001. The petitioner, a non-resident company involved in marine infrastructure projects, challenged the tax authority's decision to revoke the exemption certificate issued for withholding tax purposes. The court examined the legislative changes brought about by the Finance Act of 2012, which aimed to streamline the taxation process for Permanent Establishments of non-residents in Pakistan. The judgment highlighted the intent of the law to facilitate non-resident entities by ensuring clarity in tax obligations. The court ultimately ruled that the withdrawal of the exemption certificate was unjustified, reinstating the petitioner's rights under the Income Tax Ordinance. This case is significant for similar non-resident entities seeking tax exemptions in Pakistan and underscores the importance of legislative clarity in taxation matters. |
| Court |
Sindh High Court
|
| Entities Involved |
Federation of Pakistan,
China Harbour Engineering Company Limited
|
| Judges |
AQEEL AHMED ABBASI,
MUHAMMAD JUNAID GHAFFAR
|
| Lawyers |
Mushtaq Hussain Qazi for Petitioner,
Dilawar Hussain, Standing Counsel for Respondent No. 1,
Muhammad Sarfaraz Ali Metlo, Assisted by Dr. Najeeb Ahmed Memon Additional Commissioner, Shakeel Ahmed Kasana Additional Commissioner and Abdul Wahid Deputy Commissioner for Respondents Nos. 2 and 3,
Ms. Sara Malkani for Respondent No. 6
|
| Petitioners |
CHINA HARBOUR ENGINEERING COMPANY LIMITED
|
| Respondents |
FEDERATION OF PAKISTAN through Secretary, Chairman and others
|
| Citations |
2016 SLD 168,
2016 PTD 427
|
| Other Citations |
Commissioner of Income Tax v. Shah Nawaz Ltd. and others 1993 SCMR 73,
Dawood Cotton Mills v. Commissioner of Income Tax 2000 PTD 285,
Commissioner of Income Tax v. J.D. Sugar Mills Ltd. 2009 PTD 481
|
| Laws Involved |
Income Tax Ordinance, 2001
|
| Sections |
50(4)(b)(i),
152,
152(4A),
153
|