SAPPHIRE TEXTILE MILLS LIMITED vs FEDERATION OF PAKISTAN through Secretary, Revenue Division S

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SAPPHIRE TEXTILE MILLS LIMITED VS FEDERATION OF PAKISTAN through Secretary, Revenue Division S.65B (as amended by Finance Act, 2019)---Tax credits for investment---Purchasing and installing of machinery---Past and closed transactions---Dispute was with regard to cut off date of tax credits for investment made on purchasing and installing of machinery---Validity---Category, wherein purchase and installation had concluded by 30-06-2019, no sanctity could be conferred upon a subsequently inserted proviso in S. 65B to Income Tax Ordinance, 2001, seeking to halve the benefit that had already become due---High Court struck down the proviso to S. 65B to Income Tax Ordinance, 2001, as it was determined to be an unjustifiable attempt to vitiate protected vested rights---High Court restricted its findings to those who had made requisite purchase prior to 30-06-2019, yet completed installation by 30-06-2021---There was no case of any person that could have purchased post 30-06-2019 and / or installed beyond 30-06-2021---Two categories identified had protected vested rights and such rights could not be vitiated in the manner intended by amendment to S. 65B of Income Tax Ordinance, 2001 by Finance Act, 2019---Provision of S.65B(2) of Income Tax Ordinance, 2001 was read to reflect that the provisions of S. 65B(1) were to apply if plant and machinery was purchased before 30-06-2019 and installed before 30-06-2021---Provision of S. 65B(3) of Income Tax Ordinance, 2001 reflected that the amount of credit admissible was to be deducted from tax payable by taxpayer in respect of tax year in which plant and machinery, under reference, was installed---Determination of purchase and installation of pertinent plant and machinery, concluded within the period so specified, was to be undertaken by authorities in respective proceedings pending or initiated there before---High Court struck down 1st proviso to S.65B(1) of Income Tax Ordinance, 2001, inserted vide Finance Act, 2019---Constitutional petition was allowed accordingly.

SAPPHIRE TEXTILE MILLS LIMITED vs FEDERATION OF PAKISTAN through Secretary, Revenue Division S — 2024 PTD 955 KARACHI-HIGH-COURT-SINDH

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