The Islamabad High Court (IHC) on Monday declared the amnesty scheme on non-customs paid (NCP) vehicles by the previous government as illegal and banned the import of luxury vehicles by government and semi-government departments.
However, vehicles like jeeps that are being used for defence purposes by law enforcement agencies are exempt from the ban.
The former PPP government had approved the amnesty on NCP vehicles on March 3, 2013 allowing owners of smuggled vehicles to legalise the purchase after payment of concessional duty and taxes. President Defence of Human Rights of Public Trust, Khawaja Saad Saleem had challenged the amnesty scheme, citing it as illegal and discriminatory.
In the detailed judgment issued by the IHC, Justice Shaukat Aziz Siddiqui has directed the government to seize all vehicles registered under the abovementioned scheme and ordered Federal Investigation Agency (FIA) to initiate criminal proceedings against those government officials who introduced, approved and executed this scheme. The high court in its 25-page judgment has ordered that these vehicles be confiscated and auctioned in accordance with the law.
The judgment observed that, “The amnesty scheme is not only a slap on the face of honest taxpayers but also aimed at decriminalising the crime of tax evasion and plundering of national wealth”. The court noted that the amnesty scheme was not launched for the welfare of the people, rather it was framed by ‘certain influential’ people for their own benefit and the benefit of a ‘certain privileged class’.
The petitioner’s counsel, Advocate Syed Javed Akbar had earlier maintained that the Federal Board of Revenue (FBR) had issued a Statutory Regulatory Order (SRO) on March 3, 2013 introducing an amnesty scheme for NCP vehicles violating Import Order Policy. The petitioner argued that the scheme was launched to facilitate people who had violated the law by avoiding normal taxes and duties, in the first place.
While declaring the SRO illegal, IHC observed that the amnesty scheme has also affected the local automobile industry and manufacturers by disrupting the competitive market and creating a parallel black market for vehicles, adding that it feared that such schemes may continue in the future.
The court also pointed out that the Competition Commission of Pakistan (CCP) had also warned the government about the pessimistic consequences of the amnesty scheme in vain.
According to the report of the Federal Tax Ombudsman, the amnesty scheme has caused a loss amounting to billions of rupees to the national exchequer, adding that around 17,381 vehicles were cleared under such schemes between 1998 and 2007.
Published in The Express Tribune, July 23rd, 2013.