GB SECURITY SERVICES (PVT.) LIMITED vs The FEDERATION OF PAKISTAN Ss

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GB SECURITY SERVICES (PVT.) LIMITED VS The FEDERATION OF PAKISTAN Ss. 2(33), 3, 6(3) & 7 [as introduced through the Punjab Finance Act, 2014]---Constitution of Pakistan, Art. 70(4), Fourth Schedule, Entry No. 49---Persons providing service for security purposes---Payment to Security personnel etc.---Whether tax leviable---Whether tax on entire invoice amount or not---"Gross amount"---Scope---Petitioners/ registered persons were providing service for security purposes ('service providers') at the sites described in the related agreements to the recipients of the services ('recipients of service')---Claim of the respondents-authorities was that the tax was leviable on the entire invoice amount including salaries or other allowances ('the salaries') that were paid by the service providers to security personnel, labour and manpower (the individuals)---Validity---Provisions of Punjab Sales Tax on Services Act, 2012 ('the Act, 2012') clearly reflect that for a service to be taxable, it must be an economic activity of the service providers conducted as a business, profession, or trade, whether or not for profit---The words "gross amount" in S. 7 of the Act, 2012 were introduced, through the Punjab Finance Act, 2014 to clarify that tax is to be levied on the amount that includes all the taxes or duties, Federal or Provincial besides sales tax on services---The words "gross amount of" if given construction to include the salaries results into redundancy of S. 6(3) of the Act, 2012---No provision of an enactment can be treated as redundant or surplus and should be given its meaning and effect---Courts should avoid any interpretation of an enactment or rules that flouts common sense and results into absurdity and the Court should always give effect to the same by interpreting it in the manner that is in accordance with the judicially presumed Parliamentary concern for common sense and justice---The Courts should also avoid clash of seemingly contradicting provisions and must harmonize the contradictory provisions by interpreting not only the provisions but also the wisdom of the legislature in order to give effect to both the provisions---Thus, respondents-authorities while demanding tax on the salaries of the individuals had also overlooked that while interpreting a taxing statute, one had to look into the words of the statute and then to interpret it in the light of what is expressed in the relevant provision as well as its surrounding provisions---What is not expressed cannot be implied---There is no room of import or imputing something in a fiscal statute---At the same time, when more than one interpretation is fairly and reasonably possible then one which leads to manifest absurdity or injustice must be avoided---The power to tax service is derived by the Province from Entry No. 49 of Fourth Schedule, under Art. 70(4) of the Constitution---Federal Government has exclusive power to legislate with respect to the federal legislation list and the Provinces can only make laws, which are not enumerated in the said list --The exception in the said entry permits the respondent-authorities to impose the sales tax purely on services---Thus, only the quantum and component of service is taxable and not the amount being reimbursed by the recipient as salaries of the individuals to the service providers---Constitutional petitions were allowed accordingly.

GB SECURITY SERVICES (PVT.) LIMITED vs The FEDERATION OF PAKISTAN Ss — 2025 PTD 1159 LAHORE-HIGH-COURT-LAHORE

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