LAHORE: The Lahore High Court (LHC) issued notices to FBR and Attorney General of Pakistan (AGP) while taking up a petition against Prime Minister’s Tax Incentive Scheme.
In the petition filed by Advocate Waheed Shahzad Butt, submitted that the government introduced the Amnesty Scheme for tax dodgers through SRO 1065(I)/2013 dated December 20, 2013 by inserting clause 86 in Part-IV of Second Schedule to the Income Tax Ordinance, 2001 (Ordinance). He termed the scheme illegal, unconstitutional being ultra vires, discriminatory and based on mala fides as the FBR had no authority to amend the law enacted by the Parliament by using section 53 of the Ordinance.
The petitioner challenged the vires of clause 86 in Part-IV of Second Schedule introduced through SRO 1065(I)/2013 on December 20, 2013 whereby amnesty had been provided. It is also contended that the FBR under section 53 and 206 of the Income Tax Ordinance does not have power to issue the SRO as the power is only vested with the Parliament under Article 77 read with Article 162 of the Constitution.
The petitioner argued that the government instead of entertaining any such scheme should seriously consider introducing ‘Asset-Seizure Scheme’ to confiscate undeclared/untaxed assets created from undisclosed/untaxed money and make laws to bring back looted money from tax cheaters. The government should remove all exemptions. Announcing Tax Amnesty Schemes time and again is nothing but showing helplessness of FBR in tackling black money.
He maintained that the FBR had no power to change tax liability of a person by issuing a SRO/Circular under the garb of powers available under section 206 and section 53 of the Income Tax Ordinance, 2001. Tax liability of a person can only be determined/altered/re-determined by the Parliament. The interpretation of law is the sole prerogative of the Courts with the Supreme Court having the final say in the matter.
He pointed out that the SRO 1065(I)/2013 sought to undo the taxation measures to tax the undeclared/untaxed income. This is against the intention of the Parliament when it enacted the provisions of Section 111 of the Income Tax Ordinance, 2001. FBR/Revenue Division does not have the authority to undo statutory enactments approved by the Parliament through SROs, the petition said.
Article 162 of the Constitution even debars the National Assembly to grant tax exemptions or concessions without prior approval of the President. The power to issue SROs delegated to the federal government by the Parliament is a blatant violation of supreme law of the land. How can the Parliament delegate a power which cannot be exercised by itself without the prior sanction of the President? Principle of “no taxation without representation”, embodied in Article 77 read with Article 162 of the Constitution, is perpetually and flagrantly violated by the FBR, the tax lawyer observed.
