Money Bill

2021 PTD 971 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S.5AConstitution of Pakistan, Art.73Companies Act (XIX of 2017), Ss. 240 & 243Money BillScopeBypass of regular Legislative process by unmerited recourse to Money BillsTax on undistributed profits of public limited companiesSection 5A of Income Tax Ordinance, 2001, vires of

Petitioner's impugned S.5A of Income Tax Ordinance, 2001, inter alia, on ground that same was ultra vires the Constitution, on basis that it sought to regulate companies, which could not be done as Companies Act, 2017 was a special law, and furthermore, it could not have been enacted under Art. 73 Constitution

Validity

Intent for insertion of S.5A in the Income Tax Ordinance, 2001 was to specifically supplement provisions of the Companies Act, 2017 insofar as distribution of dividends by certain public companies was concerned, and not for raising revenues for general purpose, and therefore such provision was not amenable for promulgation vide a Money bill

Companies Act, 2017 did not contain any mandatory requirements for declaring dividends nor any prejudicial consequences for same, and while Legislature could vary the law in such regard, recourse for such right was not merited through a Money Bill

High Court observed that regulation of companies' behavior pertaining to dividends could not be effected via a Money Bill within mandate of Art. 73 of the Constitution

Section 5A of the Income Tax Ordinance, 2001 was declared ultra vires the Constitution and struck down

Constitutional petitions were allowed, accordingly.

2020 PTD 1952 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S.14A [as inserted by Finance Act (XXII of 2013)]Customs Rules, 2001, R.556(a)(iv)Constitution of Pakistan, Art.73Money BillAmendment in Customs Act, 1969

Petitioners were owners and operators of container terminals at various ports and they were aggrieved of insertion of S.14A in Customs Act, 1969, through Money Bill

Validity

Main object of Customs Act, 1969, was to make it expedient to consolidate and amend law relating to levy and collection of customs duties, fee and service charges and to provide for other allied matters

High Court observed that it did not matter that the amending provision had not itself qualified as one imposing duties and taxes etc.

All other ancillary and allied provisions in Customs Act, 1969, were meant to facilitate the officials to carry out their main objective and mandate and that was collection of duties and taxes by applying law

Amendment in question was nothing but to toe and facilitate the main object of statute; it was ancillary and incidental to the main object of imposition, abolition, remission, alteration or regulation of any tax which they would ultimately perform while performing their duties within the premises of private port/terminal operators to whom licences were issued

Imposition, abolition etc. as mentioned in Art. 73(2)(a) of the Constitution, had not operated in vacuum as it related to fiscal statute which could generate sales tax, income tax, customs duties and thus was revenue generating tool for the government

Amendment in question was in aid to a primary object of the statute and to mobilize and foster the cause of Customs Act, 1969

Constitutional petition was dismissed in circumstances.

2017 PLD 563 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 14Constitution of Pakistan, Arts. 73 & 19Pakistan Electronic Media Regulatory Authority (Radio Broadcast Station Operations) Regulations, 2012. Reglns. 7 & 9Pakistan Electronic Media Regulatory Authority Rules, 2009, R. 9Money BillNature of procedure"PEMRA Fund"Grant of licence by Pakistan Electronic Media Regulatory Authority, (PEMRA)Licence to operate radio broadcastingLicence feeRenewal of such licence fee

Nature of licence fee deposited into the PEMRA Fund in terms of S.14 of the Pakistan Electronic Media Regulatory Authority Ordinance, 2002

Scope

Petitioners, impugned vires of S. 14 of the Pakistan Electronic Media Regulatory Authority Ordinance, 2002, in reference to imposition of "licence fee" and renewal for the same, for radio broadcasting licences

Contention of petitioners inter alia was that "renewal fee" was a "tax" and not a fee, as there was no quid pro quo for the said fee, and that the same was not passed as a Money Bill within meaning of Art.73(3)(a) of the Constitution

Validity

Per Art.73(3)(a) of the Constitution, it was clear that a "licence fee" or "fee" was not a "tax" and that a licence fee was distinct from a fee or a charge for services rendered and it was not necessary that every licence have a quid pro quo or that licence fee or renewal fee be passed through a Money Bill

Article 73(3)(a) of the Constitution distinguished between "licence fee" and a "fee for services rendered" which meant that a licence fee did not require any quid pro quo but there must exist a correlation between fee charged and cost of administration under the relevant law

Licence fee must commensurate with the cost of regulating although exact arithmetical equivalence was not expected and such licence conferred a right on the licence-holder to do something which it otherwise could not do

PEMRA, in the present case, was required to regulate the licence-holder to ensure compliance of the law and terms of the licence

High Court observed that per the terms of the Constitution, a licence fee could be regulatory in nature where the regulator imposed a fee for regulating activities of the licence-holder and hence licence fee and its renewal fee did not need to be passed through a Money Bill nor did it require any quid pro quo.

2015 PTD 193 PESHAWAR-HIGH-COURT Judicial Precedent

Art.73Money billSpecial procedureObject and purpose

Rationale behind time-bound summary procedure is to ensure that matters relating to fiscal and monetary issues, which are urgently needed for economic viability and sustainability of country, are not delayed or entangled with rigors of parliamentary procedure.

2014 SCMR 1630 SUPREME-COURT Judicial Precedent

S. 3Constitution of Pakistan, Art. 73 & Fourth Sched. Part I, Entries Nos. 43 to 53Money BillGas Infrastructure Development Cess Act, 2011 introduced (in the Parliament) as a Money BillLegalityGas Infrastructure Development Cess was not a "tax" but a "fee"

Cess in question was not a tax covered by any Entry relating to imposition or levy of tax under Part-I of the Federal Legislative List, thus the Gas Infrastructure Development Cess Act, 2011, could not have been introduced as a money bill under Art. 73 of the Constitution

Gas Infrastructure Development Cess was, therefore, not validly levied in accordance with the Constitution

Appeal was dismissed accordingly.

2014 PTD 2016 SUPREME-COURT Judicial Precedent

S. 3Constitution of Pakistan, Art. 73 & Fourth Sched. Part I, Entries Nos. 43 to 53Money BillGas Infrastructure Development Cess Act, 2011 introduced (in the Parliament) as a Money BillLegalityGas Infrastructure Development Cess was not a "tax" but a "fee"

Cess in question was not a tax covered by any Entry relating to imposition or levy of tax under Part-I of the Federal Legislative List, thus the Gas Infrastructure Development Cess Act, 2011, could not have been introduced as a money bill under Art. 73 of the Constitution

Gas Infrastructure Development Cess was, therefore, not validly levied in accordance with the Constitution

Appeal was dismissed accordingly.

2014 PLD 83 ISLAMABAD Judicial Precedent

Art. 73Money BillLegislative procedure

Money Bill was a deviation or exception to the normal legislative process, therefore, being a special procedure it had to be construed strictly.

2013 PTD 1732 PESHAWAR-HIGH-COURT Judicial Precedent

Ss. 3, 4, 6(2), Second Sched. & PreambleConstitution of Pakistan, Arts. 73(2), (3) & 199Constitutional petitionMoney BillScopeGas Infrastructure Development Cess Act, 2011 introduced (in the Parliament) as a Money BillLegality

Keeping in view provisions of Art. 73(2) of the Constitution, Gas Infrastructure Development Cess Act, 2011 did not fulfill the requirements of a Money Bill nor could it be held to be a Money Bill in its true legal parlance

Provisions and Second Schedule of the Gas Infrastructure Development Cess Act, 2011 were ultra vires of the Constitution and therefore void ab initio

Constitutional petition was allowed accordingly.

2013 PTD 1030 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Arts. 73, 77 & 78Fiscal legislationMoney BillInterpretation and Scope"Tax" and "Fee", distinction

"Tax" was a compulsory exaction of money by a public authority for public purposes, whereas a "fee" was a quid pro quo, and a recompense for services rendered

Distinction between a tax and the fee lay primarily in the fact that a tax was levied as a part of a common burden, while a fee was a payment for a special benefit or privilege

"Tax" was levied to raise funds for meeting the "necessary expenses" of the State, therefore, a "tax" was not co-related to services rendered or special benefit or privilege conferred on the taxpayer and accordingly the taxpayer was sharing/discharging his obligation under a common burden without being a beneficiary of a corresponding benefit, whereas in contrast, a fee was not part of the common burden but was payment made in lieu of a benefit, service or privilege by the payer of such fee

Under Art.73(2) of the Constitution, a financial charge that neither fell within the ambit of the Federal Consolidated Fund or the Public Account of the Federation, could not fall within the scope of a "Money Bill".

2013 PTD 1030 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 4, 2(i), 6 & 11BConstitution of Pakistan, Arts. 73, 78, 77 & 199Constitutional petitionMoney BillScope"Tax" and "Fee", distinctionContributions made to the Workers' Welfare Fund by industrial undertakings were in the nature of a "fee" and not "tax"

Petitioners impugned amendments made in S. 4 of the Workers' Welfare Fund Ordinance, 1971 whereby quantum of industrial contributions to the Workers' Welfare Fund was enhanced

Contention of the petitioners was that under the prescribed scope of Money Bill under Art.73 of the Constitution, provisions of the Workers' Welfare Fund Ordinance, 1971 fell beyond the scope of Federal Finance Legislation, and such contributions had the character of a "fee" and not of a "tax" and the impugned amendments were therefore ultra vires the Constitution

Validity

"Tax" was a compulsory exaction of money by public authority for public purposes, whereas "fee" was a quid pro quo, and a recompense for services rendered

Contributions to the Fund were made by industrial undertakings, and the beneficiaries of the disbursements from the Workers' Welfare Fund were workers of such undertakings and therefore, such contributions lacked a direct quid pro quo which was considered a classic feature of a fee however still such contributions did contain a collateral recompense in which the contributor-employer's workers were the beneficiaries of disbursements from the Fund

Distinction between a tax and the fee lay primarily in the fact that a tax was levied a part of a common burden, while a fee was a payment for a special benefit or privilege

Tax was levied to raise funds for meeting the "necessary expenses" of the State, therefore, a tax was not co-related to services rendered or special benefit or privilege conferred on the taxpayer and accordingly the taxpayer was sharing/discharging his obligation under a common burden without being a beneficiary of a corresponding benefit, whereas in contrast, a fee was not part of the common burden but was payment made in lieu of a benefit, service or privilege by the payer of such fee

Workers Welfare Fund could not be applied for general requirements of the State and contributions made to it had a specified and restricted purpose and therefore the Fund was not part of a common burden and lacked such essential attribute of a "tax"

Workers' Welfare Fund was body corporate under S.11B of the Ordinance, and contributions made to it did not form part of the general revenues of the Federal Government as envisaged in Art.78(1) of the Constitution

Workers' Welfare Fund did not form part of the Federal Consolidated Fund as it had an independent statutory existence and for the same reason it did not get credited to the Public Account of the Federation

Under Art.73(2) of the Constitution, a financial charge that neither fell within the ambit of the Federal Consolidated Fund or the Public Account of the Federation, could not fall within the scope of a "Money Bill"

High Court observed that neither the Workers' Welfare Fund nor contributions made thereto bore the attributes of a "tax" nor fell within ambit of the Art.73 of the Constitution in order to be levied, modified or enhanced by a Money Bill as had happened in the present case

Impugned amendments to the Workers' Welfare Fund Ordinance, 1971 were ultra vires the Constitution and the competence of the Parliament and were accordingly set aside

Constitutional petition was allowed, in circumstances.

2013 PLD 282 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Arts. 73, 77 & 78Fiscal legislationMoney BillInterpretation and Scope"Tax" and "Fee", distinction

"Tax" was a compulsory exaction of money by a public authority for public purposes, whereas a "fee" was a quid pro quo, and a recompense for services rendered

Distinction between a tax and the fee lay primarily in the fact that a tax was levied as a part of a common burden, while a fee was a payment for a special benefit or privilege

"Tax" was levied to raise funds for meeting the "necessary expenses" of the State, therefore, a "tax" was not co-related to services rendered or special benefit or privilege conferred on the taxpayer and accordingly the taxpayer was sharing/discharging his obligation under a common burden without being a beneficiary of a corresponding benefit, whereas in contrast, a fee was not part of the common burden but was payment made in lieu of a benefit, service or privilege by the payer of such fee

Under Art.73(2) of the Constitution, a financial charge that neither fell within the ambit of the Federal Consolidated Fund or the Public Account of the Federation, could not fall within the scope of a "Money Bill"