2023 PLP 1829 (PTD)
SEARLE COMPANY LIMITED and others Versus FEDERATION OF PAKISTAN and others
| Citation | 2023 PLP 1829 (PTD) |
| Forum / Court | Sindh High Court |
| Bench Members | Adnan Iqbal Chaudhry, J |
| Parties | SEARLE COMPANY LIMITED and others Versus FEDERATION OF PAKISTAN and others |
| Primary Law | (a) Constitution of Pakistan, (b) Income Tax Ordinance (XLIX of 2001) |
Q1: What are the key laws and sections cited in 2023 PLP 1829 (PTD)?
This judgment primarily cites: (a) Constitution of Pakistan, (b) Income Tax Ordinance (XLIX of 2001) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2023 PLP 1829 (PTD)?
The case was heard and decided by the Sindh High Court bench comprising: Adnan Iqbal Chaudhry, J.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2023 PLP 1829 (PTD) (SEARLE COMPANY LIMITED and others Versus FEDERATION OF PAKISTAN and others). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
Art.189
Decisions of Supreme Court binding on other Courts
Scope
Leave grating order simpliciter passed by the Supreme Court is not precedent under Art.189 of the Constitution as it does not take an enunciation of law. Muhammad Tariq Badar v. National Bank of Pakistan 2013 SCMR 314 ref.
S.5A
Constitution of Pakistan, Art.73
Section 5A of the Income Tax Ordinance, 2001, vires of
Insertion of S.5A of the Ordinance, including amendments thereto from time to time, does not fall within the parameters delineated under Art.73 of the Constitution, hence the impugned provision is ultra vires of the Constitution
High Court restrained the department from taking any action against the tax-payers on the basis of S.5A of the Income Tax Ordinance, 2001. Sapphire Textile Mills Ltd. v. Federation of Pakistan 2021 PTD 971 ref. Abdul Ahad, Uzair Qadir Shoro and Hamza Waheed for Plaintiffs. Syed Mohsin Imam Wasti for Defendant No.3 (in Suit No.2573 of 2016). Khilji Bilal, Assistant Attorney General for Pakistan along with Mansoor Ahmed, MIS Officer, FBR for the Defendants.
Judgment & Decree
ADNAN IQBAL CHAUDHRY, J.
All these Plaintiffs pray for a declaration that section 5A of the Income Tax Ordinance, 2001, as inserted through section 5(3) of the Finance Act, 2015, is ultra vires the Constitution of Pakistan. In addition, the Plaintiffs also pray for consequential relief.
2. On 07-05-2019 the following issues were settled in these suits:- (1) Whether the amounts maintained in the free reserves of public companies constitute income within the meaning of Entry No. 47, Fourth Schedule of the Constitution ? (2) Whether Section 5A of the Income Tax Ordinance, 2001 as inserted through Section 5(3) of the Finance Act, 2015 is ultra vires the provisions of the Constitution of Pakistan, 1973 ? (3) What should the decree be ?
3. While these suits were pending, the legal question framed as issue No.2 above has been answered in the affirmative by a learned Division Bench of this Court in Sapphire Textile Mills Ltd. v. Federation of Pakistan (2021 PTD 971) to hold that: "i. It is hereby declared that insertion of Section 5A of the Income Tax Ordinance, 2001, including amendments thereto from time to time, does not fall within the parameters delineated per Article 73 of the Constitution of Pakistan, 1973, hence, the provision impugned is found to be ultra vires of the Constitution, and is hereby struck down. ii. As a consequence, any show-cause / demand notices or constituents thereof, seeking enforcement of section 5A of the Income Tax Ordinance, 2001, are hereby set aside." Given the aforesaid, learned counsel for the Plaintiffs confine the relief in their respective suits to a similar declaration along with a consequential injunction and drop all other relief.
4. On a query, learned counsel inform that the Hon'ble Supreme Court has granted leave to appeal against the judgment in Sapphire Textile, but that such appeal has yet to be decided. However, it is settled law that a leave-granting order simpliciter passed by the Supreme Court is not precedent under Article 189 of the Constitution as it does not make an enunciation of law.1 Therefore, thus far, the judgment delivered in Sapphire Textile supra by a learned Division Bench of this Court is binding on this single Bench. Resultantly, the suits are similarly decreed as follows: (a) It is hereby declared that insertion of section 5A of the Income Tax Ordinance, 2001, including amendments thereto from time to time, does not fall within the parameters delineated per Article 73 of the Constitution of Pakistan, 1973, hence, the provision impugned is found to be ultra vires of the Constitution of Pakistan. (b) The defendants are restrained from taking any action against the Plaintiffs on the basis of section 5A of the Income Tax Ordinance, 2001. SA/S-1/Sindh Suit decreed.