Sheikh NASEEM AKHTAR vs COMMISSIONER INLAND REVENUE (LEGAL) Tax and fiscal statutes

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Sheikh NASEEM AKHTAR VS COMMISSIONER INLAND REVENUE (LEGAL) Tax and fiscal statutes---Retrospective effect---Principle---Retrospective effect to legislation can only be given if it appeared beneficial for any person. Your Search returned total 35531 records from 5400 - 5450 Citation Name: 2025 PTD 1001 LAHORE-HIGH-COURT-LAHOREBookmark this Case Sheikh NASEEM AKHTAR VS COMMISSIONER INLAND REVENUE (LEGAL) Fiscal statutes---Fiscal neutrality principles---Scope---Fiscal laws must conform to the principles of fairness, reasonableness, and equal treatment and discriminatory tax policies must have a clear and rational basis---The principle of fiscal neutrality, recognized in both domestic and international taxation jurisprudence, dictates that goods or services serving similar economic functions should not be taxed differently without a justified legal or economic reason---Discriminatory tax policies that distort fair competition among similar goods violate fiscal neutrality principles. Citation Name: 2025 PTD 1001 LAHORE-HIGH-COURT-LAHOREBookmark this Case Sheikh NASEEM AKHTAR VS COMMISSIONER INLAND REVENUE (LEGAL) Ss.2(22a) & 133---Sales Tax act (VII of 1990), S.3---Tax/Fiscal statues---Retrospective effect---Principle---Tax year pertaining to 2015---amendment in statute brought in the year 2017---'Fast Moving Consumer Goods', definition of---Subsequent amendment in definition excluding 'durable goods'---The question that arose for determination before the High Court was as to "whether, under the Income Tax Ordinance, 2001, a taxpayer engaged in the wholesale distribution of table glassware was entitled to the reduced minimum tax rate of 0.2% applicable to 'Fast Moving Consumer Goods' for tax year 2015, and whether the subsequent exclusion of durable goods from the definition of 'Fast Moving Consumer Goods' through the Finance act, 2017, could be applied retrospectively to deprive the taxpayer of such benefit"---Facts in brevity were that the applicant was engaged in the wholesale business of kitchen/table glassware a net filed its tax return for the year 2015 under S. 120 of the Income Tax Ordinance, 2001 (the "Ordinance 2001")---The tax department issued a notice under S.122(5a), alleging that the return was erroneous and prejudicial to revenue interest due to incorrect application of the minimum tax rate under S. 113 of the "Ordinance, 2001"---The department contended that glassware, being durable goods, was excluded from the benefit of reduced tax rates for 'Fast Moving Consumer Goods'---The applicant argued that the reduced rate (0.2%) was applicable instead of the standard 1%, claiming that the definition of 'Fast Moving Consumer Goods' in 2015 did not exclude durable goods, and that subsequent amendments through the Finance act, 2017 should not be applied retrospectively---Held: Each tax year was a separate unit of account and taxation, therefore, the definition of 'Fast Moving Consumer Goods' would apply as it stood in tax year 2015 prior to introduction of subsequent definitions which, of course, did not carry retrospective effect---Retrospective effect to legislation could only be given if it appeared beneficial for any person---an attempt on part of respondent department to bring the case of applicant within the 'exclusion ambit' of the amended definition clause of "Fast Moving Consumer Goods" was simply meant to deprive him of the benefit of the reduced tax rate---It was also meant to create a new liability and to disturb past and closed transaction---The plea of retrospective effect of the amendment, taken by the respondent department was therefore repelled---Regarding the question as to whether table glassware should be subject to the same sales tax criteria as held in the case reported as 2018 PTD 1582, particularly in cases where distributors of table glassware were required to pay a higher sales tax than those dealing in electronic appliances it was very clear that art. 25 of the Constitution guaranteed equal protection of the law and prohibited arbitrary discrimination between similarly situated persons---Therefore, imposing a higher sales tax on distributors of table glassware than on electronic appliances created an unwarranted tax disparity, violating the principle of uniformity in taxation---No rational distinction existed between table glassware and electronic appliances that would have justified placing a higher tax burden on distributors of glassware while giving preferential treatment to electronics distributors---Distributors of table glassware were entitled to the same sales tax criteria as distributors of electronic appliances---The imposition of a higher sales tax on glassware distributors was unjustified and inconsistent with the principles of fiscal equity, constitutional rights, and fair market competition---The applicant / taxpayer was dealing in 'consumers goods' and thus he was liable to pay 0.2% minimum tax of the total turnover for tax year 2015---Reference application was accepted and decided against the respondent-Department.

Sheikh NASEEM AKHTAR vs COMMISSIONER INLAND REVENUE (LEGAL) Tax and fiscal statutes — 2025 PTD 1001 LAHORE-HIGH-COURT-LAHORE

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