COMMISSIONER OF INCOME TAX vs DYE CHEMICAL INDUSTRIES (PVT — 2023 SCMR 50 SUPREME-COURT

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COMMISSIONER OF INCOME TAX VS DYE CHEMICAL INDUSTRIES (PVT.) LTD. S. 80D & Second Sched. Pt. I, Cl. 122C---Protection of Economic Reforms act (XII of 1992), Ss. 2(b), 3 & 6---Exemption from payment of minimum tax---Whether the respondent taxpayers enjoyed exemption from the payment of minimum tax charged under section 80D of the repealed Income Tax Ordinance, 1979 ("Ordinance") by virtue of section 6 of the Protection of Economic Reforms act, 1992 ("act") read with clause 122C, Part-I of the Second Schedule to the Ordinance---Held, that section 80D of the Ordinance introduced in the year 1991, much after the insertion of Clause 122C, was a non obstante provision and therefore overrode the other provisions of the Ordinance including any tax exemption granted under the Ordinance prior to the introduction of section 80D---additionally, the industrial undertakings in the present case were set up after 07.11.1990 which was after the timeframe provided in clause 122C---"Economic reforms" which were protected under the act were the ones that were announced, promulgated or implemented by the Government on or after the 7th day of November, 1990---"Economic reforms" also included "fiscal incentives for industrialization"---Section 6 of the act, simply protected the "economic reforms" already introduced for a specified term and mandated that they shall not be altered to the disadvantage of the taxpayer---Fiscal incentives (part of the "economic reforms") that were protected under section 6 were the fiscal incentives that were announced, promulgated and implemented by the Government on or after 07.11.1990---Thus, the two notifications mentioned in the Schedule to the act were tax incentives announced in December 1990---Section 6 also protected other fiscal incentives notified under the statutes mentioned in section 3 of the act but the condition precedent for the "economic reforms" (including the fiscal incentives) to enjoy the protection of the act was that they must have been announced, promulgated or implemented by the Government on or before 07.11.1990---In the present case, the fiscal incentive under clause 122C of Part-I of the Second Schedule was promulgated in 1987---argument of the counsel for the taxpayer that the industrial undertaking set up by the respondents was after 07.11.1990 was immaterial; it was the promulgation of the fiscal incentive by the Government that had to be on or before 07.11.1990 and not the actual setting up of the industrial undertaking---Even otherwise, if the industrial undertaking was setup after 07.11.1990 then clause 122C does not apply as it only applied to industrial undertaking setup between January 1987 to June, 1988---appeals were allowed.

COMMISSIONER OF INCOME TAX vs DYE CHEMICAL INDUSTRIES (PVT — 2023 SCMR 50 SUPREME-COURT

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