| Case ID |
44cbb1e0-5c2b-4b2e-a8ee-17bed742ce99 |
| Body |
View case body. Login to View |
| Case Number |
Civil Appeals Nos. 2296 to 2412, 2707-2717 of 2001 |
| Decision Date |
Feb 22, 2006 |
| Hearing Date |
Feb 20, 2006 |
| Decision |
The Supreme Court of Pakistan ruled on various civil appeals regarding the constitutionality of excise duty imposed on services provided by financial institutions. The court concluded that the legislative intent behind imposing excise duty was valid, provided the definitions of 'services' and 'advances' are interpreted in their popular meanings. The decision highlighted that the imposition of excise duty on services related to loans and advances must have a clear correlation to the nature of the service being provided. The court also emphasized that the duty should not be levied retrospectively, especially affecting prior agreements between banks and their customers. The court upheld the validity of the Central Excise Act as it applies to various financial activities and clarified the relationship between the legislation and the Constitution of Pakistan. |
| Summary |
This case revolves around the Supreme Court's interpretation of the Central Excise Act, particularly concerning the imposition of excise duty on services offered by financial institutions. The court examined the constitutional validity of legislative measures that impose taxes on services, clarifying the definitions of key terms such as 'services', 'loans', and 'advances'. The ruling emphasized that such definitions must reflect their common usage in the financial industry. The case has significant implications for the banking sector, especially in the context of Islamic finance, where traditional concepts of loans and interest do not apply. The decision reinforced the need for clarity and precision in tax legislation, ensuring that duties are levied in a manner that aligns with the nature of the financial services provided. Overall, this ruling highlights the balance between legislative authority and constitutional rights, particularly in the realm of fiscal policy. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
FEDERATION OF PAKISTAN,
INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN,
THE PAK PUNJAB MANUFACTURING COMPANY (PVT.) LTD.,
GUL AHMAD TEXTILE MILLS LTD.,
ICC TEXTILE MILLS, LTD.,
PAK ELECTRON LTD.,
FAISAL ASAD TEXTILE MILLS LTD.
|
| Judges |
IFTIKHAR MUHAMMAD CHAUDHRY, C.J.,
FAQIR MUHAMMAD KHOKHAR,
MIAN SHAKIRULLAH JAN
|
| Lawyers |
Ch. Muhammad Anwar, Advocate Supreme Court,
M.A. Zaidi, Advocate-on-Record,
Syed Ali Zafar, Advocate Supreme Court,
Khalid Anwar, Senior Advocate Supreme Court,
Raja Muhammad Akram, Senior Advocate Supreme Court,
Muhammad Akram Sheikh, Senior Advocate Supreme Court,
Ahmer Bilal Sufi, Advocate Supreme Court,
Waseem Sajjad, Senior Advocate Supreme Court,
Mian Abdul Rauf, Advocate Supreme Court,
Raja Muhammad Irshad, D.A.G.,
Raja Haq Nawaz, Advocate Supreme Court,
A. Karim Malik, Senior Advocate Supreme Court,
Fazal-e-Ghani, Advocate Supreme Court,
Muhammad Afzal Sandhu, Advocate Supreme Court,
Muhammad Farid, Advocate Supreme Court,
A.I. Chundrigarh, Advocate Supreme Court,
Farogh Naseem, Advocate Supreme Court,
Imtiaz Rasheed Siddiqui, Advocate Supreme Court,
Khawaja Muhammad Akram, Advocate Supreme Court,
Sh. Shahid Waheed, Advocate Supreme Court,
Tariq Mehmood Khokhar, Advocate Supreme Court,
M.S. Khattak, Advocates-on-Record,
Izhar-ul-Haq, Advocate Supreme Court
|
| Petitioners |
FEDERATION OF PAKISTAN through Secretary, Ministry of Finance and others
|
| Respondents |
INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN,
Haji MUHAMMAD SADIQ and others,
ICC TEXTILE MILLS, LTD.,
Messrs PAK ELECTRON LTD. and OTHERS,
Messrs FAISAL ASAD TEXTILE MILLS LTD and OTHERS,
GUL AHMAD TEXTILE MILLS LTD.,
THE PAK PUNJAB MANUFACTURING COMPANY (PVT.) LTD. and OTHERS
|
| Citations |
2007 SLD 2535,
2007 PLD 133
|
| Other Citations |
South Behar Sugar Mills Ltd. v. Union of India AIR 1968 SC 922,
Hirjina & Co. v. Islamic Republic of Pakistan 1993 SCMR 1342,
Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582,
Pakistan Industrial Development Corporation v. Pakistan 1992 SCMR 891,
United Provinces v. Atiqa Begum AIR 1941 FC 16,
Navinchaandra Mafatlal v. Commissioner of Income Tax [1954] (XVI) ITR 758,
Bisvil Spinners v. Superintendent Central Excise PLD 1988 SC 370,
Ghulam Hyder Shah v. Chief Land Commissioner 1983 CLC 1585,
Sabir Shah v. Shad Muhammad Khan PLD 1995 SC 66,
A&B Food Industries Ltd. v. Commissioner of Income/Sales Tax Karachi 1992 SCMR 663,
Commissioner of Agricultural Income Tax East Bengal v. B.W.M. Abdul Rehman PLD 1973 SC 445,
Excise and Taxation Officer Karachi v. Burma Shell Storage and Distribution Company of Pakistan 1993 SCMR 338,
Mondi's Refreshment Room & Bar, Karachi v. Islamic Republic of Pakistan PLD 1983 Kar. 214,
Sohail Jute Mills Ltd. and others v. Federation of Pakistan PLD 1991 SC 329,
ICC Textiles Ltd. v. Federation of Pakistan 2003 PTD 1017,
P. Kunhammad Kutty Haji v. Union of India [1989] 176 ITR 481,
Ocean Industries Ltd. v. Industrial Development Bank PLD 1966 SC 738,
Jamat-i-Islami Pakistan v. Federation of Pakistan PLD 2000 SC 111,
Buxa Dooars Tea Company Ltd. v. State of West Bengal AIR 1989 SC 2015,
Govind Saran Ganga Saran v. Commissioner of the Sales Tax (1985) 155 ITR 144,
Commissioner of Sales Tax v. Hunza Central Asian Textile and Woolen Mills Ltd. 1999 PTD 1135,
Reference No.2 of 2005 PLD 2005 SC 873,
Messrs Central Insurance Co. v. The Central Board of Revenue 1993 SCMR 1232,
Al-Jehad Trust v. Federation of Pakistan PLD 1996 SC 324,
Pakistan v. Public at large PLD 1987 SC 304,
Mrs. Zehra Begum v. Pakistan Burmah-shell Ltd. PLD 1984 SC 38
|
| Laws Involved |
Central Excise Act, (I of 1944),
Constitution of Pakistan, 1973
|
| Sections |
2,
2(20),
3,
3C(1)(b),
4(3),
7(1),
First Schedule,
144,
163,
Fourth Schedule
|