MANZUR-UL-HAQ vs FEDERATION OF PAKISTAN through Secretary Finance Ss

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MANZUR-UL-HAQ VS FEDERATION OF PAKISTAN through Secretary Finance Ss. 37a & First Schedule, Division VII, Part-I---Intra Court appeal---Securities, acquiring of---Change in law---Retrospective effect---Scope---appellant / taxpayer was aggrieved of rate of capital gain tax imposed on disposal of securities held by him---appellant / taxpayer contended that rates specified in the Table in Division VII, Part I of First Schedule to Income Tax Ordinance, 2001 at the time of acquisition of securities were applicable---Validity---Notwithstanding the changes brought about in Division VII, Part I of First Schedule to Income Tax Ordinance, 2001, the legislature through Finance act, 2024 again revived 0% rate of tax on disposal of securities acquired between 01-07-2022 and 30-06-2024 where holding period exceeded six years---Disposal of securities acquired before 01-07-2013 were again held liable to 0% tax as per second proviso to Division VII, Part I of First Schedule to Income Tax Ordinance, 2001---amendments so made had completely nullified the effect of offending proviso added to Division VII, Part I of First Schedule to Income Tax Ordinance, 2001 through Finance act, 2022---This lent credence to the allegation of discrimination by appellant / taxpayer---In view of amendments made in Division VII, Part I of First Schedule to Income Tax Ordinance, 2001 up to year 2021 and in year 2024, there did not appear to be any rational basis for giving a different treatment to the disposal of securities acquired before 01-07-2013 through amendments made in Division VII, Part I of First Schedule to Income Tax Ordinance, 2001 through Finance act, 2022---Offending proviso to Division VII, Part I of First Schedule to Income Tax Ordinance, 2001 which had the effect of nullifying the Table and which on textual plane could only be construed as an independent provision stipulating a new tax, could not be inserted in Division VII, Part I of First Schedule to Income Tax Ordinance, 2001 for burdening appellant / taxpayer with 12.5% tax on capital gain on disposal of securities---The right that had come to vest in appellant / taxpayer for application of 0% tax could not be taken away by proviso to Division VII, Part I of First Schedule to Income Tax Ordinance, 2001---Division Bench of High Court directed Federal Board of Revenue to constitute a Policy Board consisting of experts to render advice on future legislation keeping in view legal and Constitutional principles interpreted and settled by the Courts in order to avoid such legislation being struck down---Division Bench of High Court set aside judgment passed by Judge in Chambers of High Court and constitutional petition filed by appellant / taxpayer was allowed---Division Bench of High Court declared that proviso added to Division VII, Part I of First Schedule to Income Tax Ordinance, 2001 through Finance act, 2022 was inoperative on the right of appellant / taxpayer to be applied 0% tax on capital gain arising on the disposal of securities from 01-07-2022 till January 2023---Intra Court appeal was allowed, in circumstances. Citation Name: 2025 PTD 893 LAHORE-HIGH-COURT-LAHOREBookmark this Case MANZUR-UL-HAQ VS FEDERATION OF PAKISTAN through Secretary Finance Proviso---Scope---Proviso may be an exception to the main provision but it cannot be inconsistent to such an extent that it nullifies what is intended by the main provision. Citation Name: 2025 PTD 893 LAHORE-HIGH-COURT-LAHOREBookmark this Case MANZUR-UL-HAQ VS FEDERATION OF PAKISTAN through Secretary Finance Fiscal laws---Amendment---Retrospective effect---Principle---Where an amendment is brought about in a fiscal statute it should not be given retrospective construction by applying it to past transactions, unless intention is expressed with irresistible clearness---Permissive basis for such legislative action is the fact that taxation is neither a penalty imposed on taxpayer nor a liability which he assumes by contract---It is but a way of apportioning the cost of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens.

MANZUR-UL-HAQ vs FEDERATION OF PAKISTAN through Secretary Finance Ss — 2025 PTD 893 LAHORE-HIGH-COURT-LAHORE

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