Rates of tax

2020 PTD 2056 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss.4, 149 & First Sched., Serial Nos.4, 5, 6 of Cl.1-A, Division-1, Part 1 [as amended by Finance Act (XVII of 2012)]Constitution of Pakistan, Art.199Constitutional petitionTaxable salaryRates of tax

Table inserted by Finance Act, 2012, in respect of rates of tax for salaried individuals with particular reference to amount of tax calculated under slabs of income at Serial Nos.5 & 6 of table "B" was ultra vires of the Constitution, and Income Tax Ordinance, 2001.

2014 PTD 225 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss.4, 149 & First Schedule, Serial Nos.4, 5, 6 of Clause 1-A, Division-1, Part-1 [as amended by Finance Act (XVII of 2012)]

Constitution of Pakistan, Art.199

Constitutional petition

Taxable salary

Rates of tax

Refund of tax

Petitioner was salaried person who was an income tax assessee and his grievance was that table "B" inserted through Finance Act, 2012, in Cl. (1A) of Division-1 of Part-1 of First Schedule to Income Tax Ordinance, 2001, was illegal and ultra vires of the Constitution

Validity

Amount of tax as calculated under slabs of taxable income at Serial Nos.4, 5 and 6 of table "B" was without any conscious application of mind, which lacked certainty of charge and was devoid of any rational basis and had resulted in creation of additional burden of tax upon a particular group of salaried individuals without legal sanction

Such anomaly in tax calculation for salaried individuals neither existed for earlier tax years, whereas by Finance Act, 2013, it had been rectified for the tax year 2014 in similar set pattern of tax calculation on the basis of continued gradual increase of tax rate

Table inserted by Finance Act, 2012, for the tax year, 2013, in respect of rates of tax for salaried individuals with particular reference to amount of tax calculated under slabs of income at Serial Nos. 4, 5 & 6 of table "B" was ultra vires of the Constitution, Income Tax Ordinance, 2001, and also inconsistent with slabs of taxable income of table "B" itself, hence of no legal effect

High Court directed the authorities to issue refund of tax to all salaried individuals whose tax had been withheld and deposited in treasury pursuant to incorrect amount of tax as prescribed under table "B", which was introduced by Finance Act, 2012

Petition was allowed accordingly.

2014 PLD 48 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss.4, 149 & First Schedule, Serial Nos.4, 5, 6 of Cl. (1-A), Division-1, Part-1 [as amended by Finance Act (XVII of 2012)]

Constitution of Pakistan, Art.199

Constitutional petition

Taxable salary

Rates of tax

Refund of tax

Petitioner was salaried person who was an income tax assessee and his grievance was that table "B" inserted through Finance Act, 2012, in Cl.(1A) of Division-1 of Part-1 of First Schedule to Income Tax Ordinance, 2001, was illegal and ultra vires of the Constitution

Validity

Amount of tax as calculated under slabs of taxable income at Serial Nos.4, 5 & 6 of Table "B" was without any conscious application of mind, which lacked certainty of charge and was devoid of any rational basis and had resulted in creation of additional burden of tax upon a particular group of salaried individuals without legal sanction

Such anomaly in tax calculation for salaried individuals neither existed for earlier tax years, whereas by Finance Act, 2013, it had been rectified for the tax year 2014 in similar set pattern of tax calculation on the basis of continued gradual increase of tax rate

Table inserted by Finance Act, 2012, for the tax year, 2013, in respect of rates of tax for salaried individuals with particular reference to amount of tax calculated under slabs of income at Serial Nos. 4, 5 & 6 of Table "B" was ultra vires of the Constitution, Income Tax Ordinance, 2001, and also inconsistent with slabs of taxable income of Table "B" itself, hence of no legal effect

High Court directed the authorities to issue refund of tax to all salaried individuals whose tax had been withheld and deposited in treasury pursuant to incorrect amount of tax as prescribed under Table "B", which was introduced by Finance Act, 2012

Petition was allowed accordingly.