ISLAMABAD: The Federal Constitutional Court (FCC) said welfare of labour, not mentioned in the Federal Legislative List of the Fourth Schedule to the Constitution, is undoubtedly a provincial subject.
Balochistan Provincial Assembly amended Section 3 of the Excise Duty on Minerals (Labour Welfare) Act, 1967 through Section 7 of the Balochistan Finance Act, 2020, revising the rates of excise duty. The Balochistan Mines Labour Welfare Department; therefore demanded from the petitioners (Attock Cement Pakistan Ltd and others) to pay excise duty on minerals at the rates revised pursuant to the Balochistan Finance Act, 2020.
The petitioners assailed the impugned legislation before the Balochistan High Court, which upheld it. Thus, they approached the Supreme Court of Pakistan under Article 185(3) of the Constitution, which was transferred to the FCC upon the enactment of the 27th Amendment.
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The petitioners counsel argued before the FCC that Provincial Assembly, by amending Section 3 of the Excise Duty on Minerals (Labour Welfare) Act, 1967 through Section 7 of the Balochistan Finance Act, 2020, acted without legislative competence. It was also contended that the imposition of excise duty is a subject within the exclusive Federal Legislative domain; therefore, the Provincial Assembly of Balochistan lacked the authority to amend the 1967 Act, particularly when such amendment effectively alters the rate or nature of excise duty.
The judgment, authored by Justice Aamir Farooq, noted that the imposition of excise duty falls within the federal domain, as Entry 44 of the Fourth Schedule to the Constitution, 1973 confers exclusive competence upon the federal legislature.
However, welfare of labour, as not mentioned in the Federal Legislative List of the Fourth Schedule and not falling in any ancillary domain of the Federal Government, is undoubtedly a Provincial subject.
The judgment said viewed from the fiscal aspect, the imposition of excise duty squarely falls within federal legislative competence; viewed from the “public interest” aspect, the advancement of labour welfare lies well within the provincial domain. Consequently, both enactments stand on firm constitutional footing, not in conflict but in constitutional harmony, each valid in its own aspect.
It said that Eighteenth Amendment of the Constitution 1973, consciously embraced the ethos of cooperative federalism wherein legislative fields are not rigid silos but at times interacting spheres. In this constitutional landscape, incidental overlap does not render a statute ultra vires.
The judgment noted that the objective of the 1967 Act is undoubtedly oriented toward the advancement of labour welfare; a domain constitutionally entrusted to the provinces. The mechanism through which this objective is pursued is the imposition of a duty of excise, not as an end in itself, but as a means carefully fashioned to finance a broader “public interest”.
The judgment said that the impugned statute neither encroaches upon nor displaces federal legislative authority; rather, it operates within a constitutionally permissible overlap to advance a legitimate provincial objective. Its fiscal mechanism serves as an ancillary means to realise a substantive purpose squarely rooted in labour welfare.
The statute does not merely levy a tax; it constructs an administrative framework for the collection, allocation, and utilisation of the proceeds, all of which are inextricably linked to the welfare of labour employed in the industry. Thus, while the recovery of excise duty is the operative mechanism of the Act, its spirit, essential character, and constitutional essence lie in the realization of labour welfare.
To strike down such legislation would be to adopt a rigid and formalistic approach, inconsistent with constitutional design. The Act; therefore, represents a lawful and harmonious exercise of legislative power, it concluded.
Copyright Business Recorder, 2026