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QUETTA CHAMBERS OF COMMERCE AND INDUSTRY vs FEDERATION OF PAKISTAN through Secretary Revenue, Islamabad S — 2025 PTD 480 QUETTA-HIGH-COURT-BALOCHISTAN

Case information

Citation
2025 PTD 480 QUETTA-HIGH-COURT-BALOCHISTAN
Court
Balochistan High Court
Year
2025
Reporter
PTD
Parties
QUETTA CHAMBERS OF COMMERCE AND INDUSTRY vs FEDERATION OF PAKISTAN through Secretary Revenue, Islamabad S
Subject matter
Tax & Customs
Provisions referred to
S. 7E---C; S. 7E; Income Tax Ordinance

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

QUETTA CHAMBERS OF COMMERCE AND INDUSTRY VS FEDERATION OF PAKISTAN through Secretary Revenue, Islamabad S. 7E---Constitution of Pakistan, Art. 199 & Fourth Schedule, Federal Legislative List, Entry No.50 [as amended by Eighteenth Amendment to the Constitution]---Constitutional petition---Tax on deemed income from immovable property---Vires of provision of S. 7E of Income Tax Ordinance, 2001---Tax on immovable properties---Scope---Petitioner / Quetta Chamber of Commerce and Industry assailed provision of S. 7E of Income Tax Ordinance, 2001 on the ground that it was ultra vires the Constitution---Validity---All powers to impose taxes on immovable properties, including power to tax capital gain on immovable properties fell in the domain of the Provinces and not of the Federation---Provision of S. 7E of Income Tax Ordinance, 2001 was beyond the competence of Federation as provided in Federal Legislative List---As it fells in the legislative competence of the Provinces, therefore, provision of S. 7E of Income Tax Ordinance, 2001 was encroachment of Federation on the legislative process of the Provinces---There was neither any economic transaction nor any accrual / arising of any amount which may be deemed as income---In case of S. 7E of Income Tax Ordinance, 2001 there was no 'Economic Transaction' or event that could give rise to an amount that could be treated as income---Deeming wais based on mere ownership of immovable property with no economic projection thereon---In absence of any economic transaction, taxing immovable properties in the hands of owners through legal fiction of deeming was irrational---High Court declared provision of S. 7E of Income Tax Ordinance, 2001 ultra virus the Constitution---Constitutional petition was allowed, in circumstances.

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