SERVICE GLOBAL FOOTWEAR LIMITED vs FEDERATION OF PAKISTAN Fiscal statute

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SERVICE GLOBAL FOOTWEAR LIMITED VS FEDERATION OF PAKISTAN Fiscal statute---Textualism, doctrine of---Scope---Doctrine of Textualism envisages a method of statutory interpretation that asserts a statute should be interpreted according to its plain meaning and not according to the intent of the legislature, the statutory purpose, or the legislative history. Ss. 2(42), 4, 4C, 80, 114, 120, First Sched., Chap. V, Part-I, Division-I & First Proviso, Division-II B [as inserted by Finance Act, 2022]---Constitution of Pakistan, Arts. 25 & 199---Constitutional petition---Vires of Super Tax---Discrimination---Term 'person'---Textualism, doctrine of---Applicability---Petitioners/taxpayers assailed imposing of Super Tax on the plea of discrimination---Validity---Term 'person' had wider amplitude and was used in broad sense---All petitioners fell within the definition of a 'person' under S. 2(42) read with S. 80(1)(b) of Income Tax Ordinance, 2001---Petitioners'/ taxpayers' liability to pay tax for income tax had arisen under Chapter II, S. 4 of Income Tax Ordinance, 2001---Liability of petitioners/taxpayers to pay tax, even if created by charging provision, materialized upon filing of return in terms of S. 114 of Income Tax Ordinance, 2001, which was treated as an assessment order under S. 120 of Income Tax Ordinance, 2001, and procedure and method to file return was provided under S. 118(2) of Income Tax Ordinance, 2001---Super Tax imposed for persons other than banking company having income equal to or exceeding Rs.500 million was gradually reduced between years 2018 to 2022 from 3% to 0% as per Division IIA of Income Tax Ordinance, 2001, while at the same time, a new Super Tax was imposed through S. 4C of Income Tax Ordinance, 2001---As per Division IIB of Income Tax Ordinance, 2001, an exorbitant and sudden increase in super tax @ 10% (which was equal to 250% increase from normal maximum rates of super tax) was imposed which was unreasonable and unjustified as compared to Super Tax earlier imposed through S. 4B of Income Tax Ordinance, 2001---There was no basis of imposing 10% Super Tax because already Supreme Court had reduced rate of Super Tax from 10% to 4%---High Court declared First Proviso to Division IIB of Part I of the First Schedule of Income Tax Ordinance, 2001 to be discriminatory on the basis of doctrine of Textualism and documents produced in Court, including budget speech and policy statement---High Court reduced rate of Super Tax to 4% from 10%---Constitutional petition was allowed accordingly. art. 25---Discrimination---Intelligible differentia, doctrine of---applicability---Differential treatment of persons who are not similarly placed has been allowed under art. 25 of the Constitution, under reasonable classification---In order to justify such difference in treatment, reasonable classification must be based on intelligible differentia that has a rational nexus with the object being sought to be achieved---any distinct treatment meted out to a class of persons can only be sustained under art. 25 of the Constitution, if such test is satisfied. S. 74---Tax year---Types---Special tax year---Scope---There are two types of tax years; one is normal tax year while the other is special tax year---Period of both of tax years in terms of S. 74 of Income Tax Ordinance, 2001 is twelve months---Availing special tax year under S.74(3) of Income Tax Ordinance, 2001, is subject to applying in writing to the Commissioner to use a twelve months' period other than normal tax years---Such permission is further subject to S. 74(5) of Income Tax Ordinance 2001---Availing any special tax year for payment, tax liability is just to accommodate that category of taxpayers and not for the purpose to evade payment of income tax due in a normal tax year.

SERVICE GLOBAL FOOTWEAR LIMITED vs FEDERATION OF PAKISTAN Fiscal statute — 2023 PTD 1120 LAHORE-HIGH-COURT-LAHORE

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