| Case Details | |
|---|---|
| Case ID | e2edb1e8-b77b-4407-b702-87edbae1ee88 |
| Body | View case body. Login to View |
| Case Number | W.P. No. 50314 of 2022 |
| Decision Date | Dec 22, 2022 |
| Hearing Date | Dec 22, 2022 |
| Decision | The Lahore High Court upheld the validity of Section 8(2)(b) of the Finance Act, 2022, confirming that it is constitutional and within the legislative competence of the Parliament to impose a capital value tax on the foreign assets of resident individuals. The court ruled that the Parliament has the authority to legislate on capital value taxes as specified in Entry 50 of the Federal Legislative List. It clarified that the tax on capital value of assets is distinct from taxes on immovable property, which are exclusively within the provincial legislative domain. The court emphasized the need for legislative clarity regarding territorial limits and the nature of assets being taxed, ensuring that the rights of the petitioners are not violated under constitutional provisions. This decision sets a precedent on the authority of the federal government to levy taxes on foreign assets, distinguishing between different categories of taxation and the legislative powers associated with them. |
| Summary | In the landmark case before the Lahore High Court, the constitutionality of Section 8(2)(b) of the Finance Act, 2022 was challenged by petitioners arguing that the Parliament lacked the authority to tax foreign assets of residents. The court considered the implications of the Income Tax Ordinance, 2001 and the Constitution of Pakistan, 1973 in its ruling. It found that the Parliament is competent to legislate on capital value taxes, while taxes on immovable property remain under provincial jurisdiction. This decision is significant in understanding the legislative scope of taxation in Pakistan, particularly regarding capital value tax on foreign assets, and clarifies the boundaries of federal and provincial powers in tax legislation. The ruling has implications for future taxation policies and the treatment of foreign investments. This case highlights the importance of legislative competence and the need for clear delineation of tax authority, ensuring compliance with constitutional mandates while addressing the complexities of modern taxation. |
| Court | Lahore High Court |
| Entities Involved | Not available |
| Judges | ASIM HAFEEZ, JUSTICE |
| Lawyers | Mr. Muhammad Ajmal Khan, Mr. Mustafa Kamal, Mr. Zahid Imran Gondal, Mr. Hammad-ul-Hassan Hanjra, Muhammad Usman, Mr. Sheraz Zaka, M/s Shahbaz Butt, Asad Abbas Raza, Muhammad Usman Zia, Muhammad Ahsan Mahmood, Mr. Naeem Khan, Usman Ali Bhoon, Malik Ahsan Mehmood, Muhammad Bilal Pervaiz, Saqib Qadeer, Muhammad Abrar, Yasir Hamid, Azeem Suleman, Mr. Khalil-ur-Rehman, Mr. Muhammad Javed Arshad, Malik Nadir Ali Sherazi, Mr. Waseem Ahmad Malik, Mr. Abdul Muqtadir Khan, Ali Umrao, M/s Khalid Ishaq, Muhammad Nouman Shams Qazi, Muhammad Ali Awan, Ch. Anwaar Ul Haq, Muhammad Ibraheem Hassan, M/s Syed Muhammad Ijaz, M. Hamza Rauf, M. Imran Khan, Mian Faheem Khadim, M/s Salman Akram Raja, Tariq Bashir, Arsalan Riaz, Atira Ikram, Syed Muhammad Islam, Mr. Ibrahim Haroon, M/s Muhammad Mansha Sukhera, Muqadam Sukhera, Mr. Shazib Masood, M/s Faisal Rasheed Ghouri, Rai Amir Ijaz Kharal, M/s Muhammad Abubakar, M/s Muhammad Shahid Baig, Mr. Usman Khalil, Mr. Mudassar Shuja-uddin, Mr. Ahsan Ahmed Munir, Mr. Khurram Tawassal, Mr. Shahid Jami, Mr. Arshed Javed, Mr. Muhammad Awais Ahsan Joiya, M/s Ahmed Pervaiz, Saffi-ul Hassan, Ahtasham Mukhtar, Mr. Liaqat Ali Chaudhary, M/s Sheikh Muhammad Ali, Maryam Asad, Muhammad Sharfeen, Baran Khan Sherwani, Muhammad Rizwan, Syed Zain-ul-Abidein Bukhari, Mr. Shahid Sarwar Chahil, Mr. Nadeem Khan, Mr. Adeel Shahid Karim, Mr. Bilal Munir, Mr. Anwar Ali Sanga, Nidaya Aftab, Nayab Tarar, M/s Ch. Sultan Mehmood, Samran Mushtaq Ch., Ahmed Ali Gondal, Ms. Sana Awan, Nasir Mehmood Bhatti, Ms. Laila Ghafoor, Muhammad Majid |
| Petitioners | Others, ZAKA UD DIN MALIK |
| Respondents | FEDERATION OF PAKISTAN, ETC. |
| Citations | 2023 SLD 51, (2023) 127 TAX 73, 2023 PTD 268, 2023 PTCL 345 |
| Other Citations | PLD 1997 SC 582 |
| Laws Involved | Income Tax Ordinance, 2001, Constitution of Pakistan, 1973 |
| Sections | 103, 8(2)(b), 13(f), 1(2), 141, 142(a), 142(c), 143, 144, 245(2), 260, 264 |