Agricultural tax notifications declared unlawful
Punjab Assembly Speaker Malik Muhammad Ahmad Khan has declared recent government notifications revising agricultural income tax rates as unlawful and ordered an immediate halt to their enforcement, assessments and collections.
The ruling came during the 41st session of the Punjab Assembly on a privilege motion moved by MPA Zulfiqar Ali Shah.
The Speaker held that the notifications lacked legal validity as they were not presented before the Assembly in accordance with statutory requirements.
He directed the Excise and Taxation Department to suspend implementation of the revised rates and instructed the government to place the relevant notifications before the House within 15 days, along with a detailed report explaining the lapse.
The matter has also been referred to the Committee on Law Reforms and Delegated Legislation to fix responsibility and submit findings within one month.
The issue stems from notifications issued on March 5, 2025, revising agricultural income tax rates, followed by another notification on September 10, 2025, seeking retrospective application from July 1, 2025.
The mover of the motion argued that these were not laid before the Assembly at the time of the 202526 budget, as required under Section 11(2) of the Punjab Agricultural Income Tax Act, 1997. In his ruling, the Speaker emphasized that taxation powers rest with the legislature under the Constitution and any delegated authority must strictly follow legal procedures.
He observed that failure to place such notifications before the Assembly renders them ineffective and without lawful basis.
The Speaker also termed the omission a breach of parliamentary privilege and reiterated the importance of legislative oversight in taxation matters.
He cited relevant judicial precedents, including rulings of superior courts, to support the requirement of presenting tax notifications before the legislature.
He further directed that all future changes to agricultural income tax rates must be introduced before the Assembly during the annual budget session to be enforceable. The ruling clarified that taxpayers affected by the now-void notifications may seek relief through appropriate legal forums regarding any recoveries made under the revised rates.