Landmark judgment of the Supreme Court



March 19, 2022

Landmark judgment


Dr. Tahseen Mahmood Aslam comments about a crucial verdict about a contentious issue

The Landmark judgment lop-sided governance in Pakistan has faced additional difficulties in shape of adhoc measures taken by successive regimes to keep themselves in power. Most governments have consistently rocked the steady boat of governance by bringing in frequent legislation undertaken through executive ordinances that were basically aimed at weathering a storm temporarily. In this context it is mentioned that the PTI government had issued at least 54 presidential ordinances during the three years since it came to power in July 2018. Some ordinances were issued to run even the routine business of the federal government. According to the National Assembly’s website, seven ordinances were promulgated in the government’s first parliamentary year and 30 in the second year. More than 16 ordinances have already been promulgated in the third parliamentary year which is ongoing. This is actually quite a tall order and makes a mockery of the entire concept and practice of responsible governance.
It is often observed that most ordinances fall on the wayside and very few are ratified by parliamentary authority by means of proper legislative procedure. This damaging practice has now been developed into an art form and has virtually become a standard format for fulfilling the intents of the governments in power. Problematically this practice is all-pervasive and spares no facet of governance including matters related to fiscal and monetary policies such as tax amnesty schemes. It is needless to point out that rule by ordinances is essentially self-defeating and runs contrary to widely accepted legislative principles and practices.
In this context the Supreme Court of Pakistan was seized of this reprehensible practice and in a detailed judgment while finally declaring promulgation of ordinances without emergency matters as unconstitutional also spelt out the circumstances under which ordinances can be enforced. A two-member bench of the apex court comprising Justice Qazi Faez Isa and Justice Amin ud Din Khan issued a detailed verdict regarding Income Support Levy Act (ISL)2013 and upheld the Sindh High Court’s (SHC) decision, dismissing some 581 appeals filed by Commissioner Inland Revenue, Karachi. The petitioners had sought leave to appeal against the SHC judgment given in July last year declaring the ISL Act 2013 as ultra vires to the constitution. The SC 28 December , 2021 in a short order upheld the SHC decision and dismissed the instant petitions. It is reported that last year in July, the SHC held that the imposition of the ISL Act by the former PMLN government in the 2013 budget did not possess the characteristics of a tax as it was not a common burden for raising revenue to be utilised for general public and thereby declared the Act as ultra vires to the constitution.
In a 30-page detailed judgment authored by Justice Qazi Faez Isa the apex court held that the president and provincial governors might promulgate ordinances but their power to promulgate ordinances is circumscribed by the constitution. The SC took the stance that pertains to rational undertones of legislative responsibility and mentioned that the laws are made for the people, therefore, their participation through their representatives in the making of laws is not only essential but a stipulated constitutional requirement. It added that it is fair to state that when people through their elected representatives are involved in lawmaking, such laws are wholeheartedly accepted holding that representative democracy helps to unite the people, engenders goodwill and empowers them so when the people are involved in governance, this strengthens the federation. Each and every word of the constitution and the methodologies and procedures prescribed therein, must be strictly adhered to and when this is done it dissipates misgivings and mistrust and steers away from pitfalls and it also avoids wastage of time, money and effort, as witnessed in this case.
The detailed verdict further held that history is testament to the fact that whenever the constitution is violated, it disrespects the people for whom it was made. Constitutional transgressions invariably have disastrous ramifications which, as we have learnt to our peril, undermine democracy and national unity. This view is perfectly in line with the rationalistic contours of prudent governance and if it is not taken care of then the entire governance becomes completely meaningless.
In this context it was reported that earlier, the SHC ruled in favour of taxpayers having net moveable assets worth more than one million rupees, contending that the imposition of a 0.5 per cent income support levy on the net value through the Income Support Levy Act 2013 was unconstitutional, as it did not have the characteristic of a tax and was discriminatory because it created unreasonable classification within the same class. A second category of the taxpayers had challenged the notices and assessment orders passed in terms of Section 5 of the Act despite its repeal by the government in 2014. The FBR argued that the income support levy had all the characteristics of taxation and the nomenclature used to describe it was immaterial and that since the Act constituted a money bill, as described in Article 73 (2) of the Constitution, it became law when it was passed by the National Assembly and received the presidential assent.
The FBR told the Supreme Court bench that the SHC had noted that the act could not have been introduced as a money bill and incorrectly held that the income support levy was not a tax and then based on this incorrect assumption held that the act was unconstitutional. The responding taxpayers submitted that the act was enacted through the Finance Act of 2013 even though it did not have the ingredients of a money bill as mentioned in Article 73(2) of the Constitution, therefore, if it was to be made law then, it had to comply with the ordinary legislative procedure prescribed in Article 70 of the Constitution. However, by tabling the act as a money bill, or as a purported component of a money bill, the Senate of Pakistan was bypassed.
In this respect the Supreme Court noted that an Act itself did not state that the income support levy was or constituted a tax or taxation. Leaving semantics aside, an examination of the act makes it abundantly clear that it neither came within the definition of tax nor taxation. The act was social legislation with the declared objective of poverty alleviation. Though a worthwhile objective, it did not bring the act within the definition of a money bill. Since the act was not a money bill it had to be passed by both houses as provided by Article 70 of the Constitution that did not happen. The court highlighted that the Act also suffered from other insurmountable constitutional shortcomings as in the absence of any legislative mechanism to secure the amounts collected as income support levy for the stated objective of poverty alleviation, such amounts would be deposited and become part of the federal consolidated fund becoming indistinguishable from other monies therein. SC added that the Act did not declare that the amounts recovered pursuant to the act were to be charged in any specific manner on the fund. Resultantly, the amounts raised by the income support levy would go into the fund and would have to be distributed pursuant to the mechanism provided in the Constitution. Consequently, the stated objective of poverty alleviation, for which the Act was purportedly enacted, could not be achieved. TW

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Dr. Tahseen Mahmood Aslam is an educationist with wide experience


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