SHELL PAKISTAN LIMITED vs FEDERATION OF PAKISTAN through Secretary Ministry of Finance art

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SHELL PAKISTAN LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance art.25---Discrimination---Reasonable classification, principle of---Scope---Provision of art. 25 of the Constitution envisages equality between citizens, however it allows for differential treatment of persons not similarly placed under a reasonable classification---Reasonable classification has to be based upon intelligible differentia having a nexus with the object sought to be achieved. Citation Name: 2023 PTD 607 KARACHI-HIGH-COURT-SINDHBookmark this Case SHELL PAKISTAN LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance Ss. 4B, 4C & First Schedule, Part I, proviso to Division IIB (inserted vide Finance Act, 2022)---Constitution of Pakistan, Arts. 23 & 24---Super tax, vires of---Charging section---Retrospective effect---Property rights---Petitioners / taxpayers sought striking down of S.4C of Income Tax Ordinance, 2001, on the plea that charging section could not be retrospective in nature---Contention of authorities was that protected right created vide S.4B of Income Tax Ordinance, 2001, stood impliedly superseded with retrospective effect by insertion of S.4C in Income Tax Ordinance, 2001---Validity---There was a clearly expressed statutorily protected right in respect of super tax, created in favor of tax payer---Under no stroke of interpretation, even strained, strict or convoluted, the benefit stood diminished---Tax payers availed benefit for two years so far and nothing was demonstrated before High Court to consider them disentitled to remaining period---Provision of S.4C of Income Tax Ordinance, 2001, merited in the scenario whereby authorities claimed that rights subsisting vide S.4B of Income Tax Ordinance, 2001, had been vitiated vide S.4C of Income Tax Ordinance, 2001, notwithstanding manifest absence of any express legislative intent to such effect---Super tax was to be recovered from every person, subject to qualifying quantum of income, on the basis delineated in the identified schedule---Relevant schedule precluded recovery of super tax from every person for a period inclusive of tax year 2022---There was a manifest inconsistency with S.4C of Income Tax Ordinance, 2001, which sought to recover super tax for the tax year 2022---Levy under S.4C of Income Tax Ordinance, 2001 was on the income of every person and differentiation in respect of quantum of income was determinant factor for application of the designated tax rate---Higher the level of income the higher was the incidence of taxation intended---Similar treatment was accorded under S.4B of Income Tax Ordinance, 2001, which was reasonable having a nexus with the objective of the levy---Constitution had conferred fundamental rights upon citizens with respect to property, per Arts. 23 & 24 of the Constitution---Such rights could not be abridged by measures determined to be discriminatory---Proviso could not survive test of intelligible differentia, as it could not be demonstrated that imposition of a two hundred and fifty percent (250%) higher rate of super tax was based on any intelligible differentia, having nexus with the purpose of the law---Super tax levied once again vide S.4C of Income Tax Ordinance, 2001, could not be recovered during subsistence of benefit / protection granted to the tax payer vide S.4B of Income Tax Ordinance, 2001---Only avenue to save conflicting provisions of law was to harmonize the same--- Provision of 1st proviso to Division IIB of Part I of the First Schedule to Income Tax Ordinance, 2001, was discriminatory as there was no intelligible differentia therein, having rational nexus with the object of classification--- Provision of S. 4C of Income Tax Ordinance, 2001, was read to reflect that the levy would be applicable from the tax year 2023---High Court declared provision of 1st proviso to Division IIB of Part I of the First Schedule to the Income Tax Ordinance, 2001, as discriminatory and ultra vires to the Constitution---Constitutional petition was allowed accordingly. Citation Name: 2023 PTD 607 KARACHI-HIGH-COURT-SINDHBookmark this Case SHELL PAKISTAN LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance Taxing statute---Anomaly, preventing of---Scope of a provision cannot be extended by analogy or beneficent / equitable construction in order to prevent an anomaly---If section of taxing statute creates doubt or ambiguity then it should not to be construed to extract a new added obligation, not formerly cast upon the tax payer. Citation Name: 2023 PTD 607 KARACHI-HIGH-COURT-SINDHBookmark this Case SHELL PAKISTAN LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance amendment---Inconsistency---Scope---Law accepts that an amendment becomes a part of original statute and both ought to be construed together---In case of any inconsistency, harmonization may be employed so as to impede an irreconcilable conflict---While an amendment is considered as the last expression of will of the legislature, generally prevails, however such effect is prospective and should not be given any retroactive construction, overriding effect on prior rights unless the verbiage of the provision makes such construction necessary.

SHELL PAKISTAN LIMITED vs FEDERATION OF PAKISTAN through Secretary Ministry of Finance art — 2023 PTD 607 KARACHI-HIGH-COURT-SINDH

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