25th Constitutional Amendment: PHC declares tax in electricity bills to Fata industries ‘illegal’

PESHAWAR: The Peshawar High Court (PHC) on Tuesday declared payment of any tax in the electricity bills issued to erstwhile Fata industries after the 25th Constitutional Amendment and merger of Fata and Pata as illegal.

“The upshot of the arguments is that the petitioners are not liable to pay any tax which is not applicable prior to the Constitution 25th Amendment Act 2018. Consequently, collection of advance tax on the amount of electricity bills on industrial units of the petitioners, being in violation of SROs No 1213 and 1212 issued on October 5, 2018, is hereby declared illegal,” said a detailed judgment authored by Justice Roohul Amin Khan, which was reserved in April 2019.

In the judgment, the court declared that the petitioners were not required to obtain an exemption certificate as contemplated under section 159 of the Income Tax Ordinance. The owners of industrial units in erstwhile Fata had challenged the imposition and payment of various taxes such as Advanced Income Tax, Sales Tax, Extra Tax, Additional Tax and a hoard of other duties in electricity bills issued to industries even after 25th Constitutional Amendment and merger of Fata and Pata as with the merger the federal government had exempted tribal districts from all taxes for five years.

In the 24-page judgment, it was held that amendment Schedule-II, part IV by insertion of section 110 through SRO No 1213 the word “Exempted from the Provision of the Ordinance” has been specifically used instead of “Exemption from Tax” enumerated in Division II and III of the Income Tax Ordinance. “Invariably the petitioner having their industrial units inside the tribal areas, having being given the immunity in the shape of exemption, where the applicability of chapter X and XII have been excluded for a period of five years,” the judgment stated.

It was stated that there is no civil to the proposition that a statute and an enactment were the intentions of legislatures, which enact them after having regards to various facts and circumstances prevailing at the time of legislation.

“It is the cardinal principle of law that interpretation by courts shall be done in such a way that the intention of legislatures shall prevail and no injustice occurred to the parties. In other words, it can be said that an interpretation which makes the enactment a consistent whole, should be the aim of the court,” the judge ruled.