Opposition senators challenge Finance Act, 2017 in IHC

Say enabling the finance minister to exercise the cabinet’s powers in tax matters unlawful

ISLAMABAD: Over two dozen senators from opposition benches have challenged the Finance Act, 2017, which enables the finance minister to exercise the cabinet’s powers in tax matters.

Thirty-two senators – from the PPP, PTI, PML-Q, ANP, MQM, Jamaat-e-Islami, and an independent lawmaker – challenged the act in the Islamabad High Court (IHC) on Friday.

The senators have nominated the federation, secretaries of the cabinet division, Ministry of Law and Justice, Ministry of Finance and the chairman of the Federal Board of Revenue as respondents.

The lawmakers have said substitution of term ‘Federal Government’ with ‘Board’ [Federal Board of Revenue] in Customs Act 1969, Sales Tax 1990, and Federal Excise Act 2005 through Finance Act 2017 is ultra vires of the Constitution.

The petitioners’ counsel Mohsin Kamal said the senators have the mandate to protect rights of the federating units and to ensure that devolution of powers takes place within the constitutional parameters.



He said the Ministry of Law and Justice and the Ministry of Finance introduced Finance Bill 2017 whereby it was proposed to amend the Customs Act 1969, Sales Tax 1990, and Federal Excise Act 2005.

The bill, introduced by the government as ‘Money Bill’, was adopted by the National Assembly on June 13, 2017, and became Finance Act, 2017, despite reservations of the opposition benches.

Kamal said the Finance Act having been enacted as ‘Money Bill’ can only amend the taxing statutes to the extent of fiscal and financial matters which are duly provided in Sub-Article 2 of Article 73 of the Constitution.

He said the substitution whereby all the powers and functions of the federal government as provided in the taxing statutes have now been shifted and delegated to the FBR is illegal.

“The act of delegating powers and functions of the federal government to the FBR in relation to matters falling under taxing statutes violates Article 90, 91 and 99 of the Constitution, 18th amendment to the Constitution, Rules of Business, 1973, and the dictum laid down by the Supreme Court,” he added.



He said the Ministry of Law and Justice and the Ministry of Finance, in utter disregard to mandate of the Constitution, delegated the power and functions of the federal government to the FBR without resorting to Article 70 of the Constitutions

“Such delegation of powers cannot be carried out under the garb of Article 73 of the Constitution and hence, the act of the respondents is capricious and unconstitutional,” he added.

He requested the court to declare that substitution of the term ‘Federal Government’ with the FBR ultra vires of the Constitution and amendment through ‘Money Bill’ under Article 73 of the Constitution as opposed to Article 70 as unlawful.

He asked the court to permanently restrain and prohibit respondents from giving effect to the impugned amendment or from taking action thereunder. The attorney also requested the court to direct the federation to take immediate action and channelise the matter.