PHOTO: TRIBUNE
ISLAMABAD: The Islamabad High Court (IHC) on Monday issued notices to key government officials in a petition filed by over 30 senators from opposition benches challenging the Finance Act, 2017, so that the power of changing the country’s tax system could be returned to the federal cabinet.
The decision-making power currently lies with the minister incharge of the finance and revenue division which happens to be Finance Minister Ishaq Dar. This is in violation of the August 2016 judgment of the Supreme Court of Pakistan.
Justice Aamer Farooq issued notices to the federation, secretaries of the Cabinet Division, Ministry of Law and Justice, Ministry of Finance and the chairman of Federal Board of Revenue (FBR), seeking a reply within a fortnight.
Thirty-two senators from the PPP, PTI, PML-Q, ANP, MQM, JI, and an independent lawmaker challenged the act.
The lawmakers said substitution of the term federal government with board – FBR – in Customs Act, 1969, Sales Tax, 1990, Federal Excise Act, 2005 and Income Tax Ordinance 2001 through Finance Act, 2017 is ultra vires of the Constitution.
The petitioners’ counsel Mohsin Kamal said the Ministry of Finance introduced Finance Bill, 2017 whereby it was proposed to amend the customs act, the sales tax, the federal excise act and the income tax.
Opposition senators challenge Finance Act, 2017 in IHC
The bill introduced by the government as ‘money bill’ was adopted by the National Assembly on June 13, 2017, and became the Finance Act, 2017, despite reservations of the opposition benches over the substitution.
Kamal said the substitution – whereby all powers and functions of the federal government as provided in the taxing statutes have 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.
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He said the finance ministry, in utter disregard to the mandate of the Constitution, delegated the power and functions without resorting to Article 70 of the Constitution.
“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, requesting the court to declare the move 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.
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