| Case ID |
e971a942-f6b9-412e-85b0-9d8526ea9c9e |
| Body |
View case body. Login to View |
| Case Number |
Civil Appeals Nos. 152 to 190, 1156 to 1162, 1165 |
| Decision Date |
Mar 13, 2012 |
| Hearing Date |
|
| Decision |
The Supreme Court dismissed the appeals filed regarding the validity of the advance tax imposed on electricity bills under section 235 of the Income Tax Ordinance, 2001. The Court held that the tax was not a tax on expenditure but rather a tax on income, as it ultimately relates to the income of the consumer. It was determined that the legislative competence of the Parliament to impose such a tax was valid, and the appellants failed to demonstrate that the tax was confiscatory or ultra vires. The decision reaffirmed the principle that taxes should not be expropriatory and should be within the bounds of legislative power as outlined in the Constitution. |
| Summary |
In the landmark case involving the Income Tax Ordinance, 2001, the Supreme Court of Pakistan addressed the contentious issue of advance tax on electricity bills. The appellants challenged the legality of this tax, arguing it constituted an unlawful tax on expenditure, falling outside the scope of federal legislative authority. The Court, however, clarified that the tax is fundamentally linked to income rather than expenditure, emphasizing that the tax system aims to encompass all commercial and industrial activities under the tax net. This decision is crucial for understanding the relationship between taxation and constitutional provisions regarding fiscal powers, and it highlights the balance between legislative authority and taxpayer rights. The ruling serves as a precedent for similar taxation matters, underscoring the importance of legislative clarity and the protection of business interests. Keywords: Supreme Court, Income Tax Ordinance, electricity tax, legislative competence, tax on income, constitutional law. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Lahore Electric Supply Company (LESCO),
Faisalabad Electric Supply Company (FESCO)
|
| Judges |
MIAN SHAKIRULLAH,
JAN,
NASIR-UL-MULK,
EJAZ AFZAL KHAN
|
| Lawyers |
Mian Ashiq Hussain, Advocate Supreme Court,
Arshad Ali Ch. Advocate-on-Record,
M. Ilyas Khan, Senior Advocate Supreme Court,
Raja Abdul Ghafoor, Advocate-on-Record,
M. Ramzan Ch., Senior Advocate Supreme Court,
Syed Arshad Hussain Shah, Advocate Supreme Court,
Mian M. Javed, Advocate Supreme Court
|
| Petitioners |
others,
Messrs Lahore High Court POLYPROPYLENE INDUSTRIES (PVT.) LTD.
|
| Respondents |
FEDERATION OF PAKISTAN,
others
|
| Citations |
2012 SLD 622,
2012 SCMR 709,
2012 PTR 12
|
| Other Citations |
Messrs Sh. Abdur Rahim, Allah Ditta v. Federation of Pakistan PLD 1988 SC 670,
Messrs Elahi Cotton Mills Ltd. and others v. Federation of Pakistan and 6 others PLD 1997 SC 582,
Pakistan Tobacco Company Ltd. and another v. Federation of Pakistan and 3 others 1999 SCMR 382,
Pakistan Industrial Development Corporation v. Pakistan through Ministry of Finance 1992 PTD 576,
Reference under the Government of Ireland Act, 1920 (Privy Council) 1936,
Buxa Dooars Tea Company Ltd. and others v. State of West Bengal and others (1989) 3 Supreme Court cases 211,
State and another v. Sajjad Hussain and others 1993 SCMR 1523,
Azizur Rehman v. the State (Cr. A. No.17(S)/1990 - SCMR Vol.XXVI),
Call Tell (Pvt.) Ltd. v. Federation of Pakistan 2004 PTD 3032,
Government of Pakistan and others v. Muhammad Ashraf and others PLD 1993 SC 176,
Messrs Hoechst Pharmaceuticals Ltd. and another v. State of Bihar AIR 1983 SC 1019,
Messrs Geeta Enterprises and others v. State of U.P. and others (AIR 1983 SC 1098),
The Elel Hotels and Investment Ltd. v. Union of India AIR 1990 SC 1664,
Federation of Pakistan v. Muhammad Sadiq 2007 PTD 57,
Riaz Bottlers Pvt. Ltd. v. Lahore Electric Supply Co. 2010 PTD 1295,
Aized Hussain v. Motor Registration Authority PLD 2010 SC 983
|
| Laws Involved |
Income Tax Ordinance, 2001,
Constitution of Pakistan, 1973
|
| Sections |
147,
255,
2-A,
3,
4,
77,
185(3),
242(c)
|