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ISLAMABAD: A divisional bench of the Lahore High Court (LHC) has issued notices to the Federal Board of Revenue (FBR) to submit comments on the petition filed by Maryam Nawaz Sharif for declaring the Income Support Levy Act, 2013, as illegal, unlawful, void ab-initio and ultra vires the Constitution.

The petitioner has filed an intra-court appeal before the LHC under Section 3 of Law Reforms Ordinance 1972 against the order dated May 20, 2019 passed by single judge of this court, whereby writ number 30703/2019 was dismissed.

On Wednesday the hearing was held, where the LHC also suspended notice, and issued notices to the federation, the FBR and the concerned Deputy Commissioner Inland Revenue to submit comments on the petition filed by Maryam Nawaz.

Shahid Pervez Jami, advocate High Court filed the petition before the LHC on behalf of the petitioner.

According to the petitioner, Maryam Nawaz Sharif had received a notice under Section 3 of the Income Tax Ordinance, 2001 read with Section 9 of the Income Support Levy Act, 2013 by the Deputy Commissioner Inland Revenue Unit-08, Zone-V, CRTO, Lahore that the taxpayer is liable to pay Income Support Levy for Tax Year 2014.

The notice is without jurisdiction hence, writ petition was filed before the LHC and hearing was held on 20 May 2019 but the learned single judge disposed of the petition and the appellant is aggrieved with the impugned order hence, this appeal has been filed before the LHC.

The petitioner said that the Income Support Levy was initially levied through Income Support Levy Act, 2013 with effect from Tax Year 2013. However, this levy/Act was withdrawn through Finance Act 2014 without any saving clause.

As per amendments made through the Constitution (Eighteen Amendment) Act, 2010 in the Constitution, the subject of social welfare has been made a provincial subject; the domain of the Federation or its constituents has been relegated to the provinces.

After the Constitution (Eighteen Amendment) Act, 2010 all legislation with respect to social welfare is now to be done by the respective provinces; and the Federation has no legislative power thus, Income Support Levy Act, 2013 promulgated by the Federation is ultra vires of the Constitution and bad in law.

The impugned legislation i.e. Income Support Levy Act, 2013 is utterly unconstitutional being in violation of Articles 141, 142 and 143 of the Constitution read with the Fourth Schedule thereof, in as much as it seeks to create an impost in complete negation of the scheme of the constitution, the petition added.

The Income Support Levy as a matter of fact is in the form of a fee and not a tax as proceeds of the levy cannot be utilised as the general revenue of the State, and can only be used for the purpose stated in the mentioned section.

It is, further submitted that the federal legislature has no power to impose the said Income Support Levy styled as a cess under the Fourth Schedule to the Constitution as none of the Entries therein permit the imposition of a cess and/or fee for social welfare.

The Entries 47 and 48 of Part-I to the Fourth Schedule have no relevance or nexus with the purpose of the said Income Support Levy.

It is, therefore submitted that Income Support Levy Act, 2013 is unconstitutional, without jurisdiction, illegal and void ab-initio.

The petitioner pleaded that the order dated 20 May 2019 passed by the single judge might be cancelled.

Copyright Business Recorder, 2020

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