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July 20, 2019

Pleas against Punjab Revenue Authority dismissed

Lahore

July 20, 2019

LAHORE: The Lahore High Court Friday dismissed hundreds of petitions challenging establishment of Punjab Revenue Authority (PRA) and its power to recover sales tax.

Justice Shahid Jamil Khan dismissed the petitions through a short order and said the reasons for the dismissal would be recorded in a detailed verdict to be released in days.

The lawyers from the petitioners’ side had contended that the Punjab Revenue Authority had been created under the Punjab Revenue Authority (Amendment) Act 2016 that started collection of sales tax on services after the enforcement of Punjab Sales Tax on Services Act, 2012.

They argued that as per Article 77 of the Constitution no tax shall be levied for the purposes of the federation except by or under the authority of an act of the parliament. Whereas, Article 142 (c) of the Constitution provided that parliament shall not have power to make laws in respect of any matter, not enumerated in the federal legislative list.

The counsel stated that the authority consisted of a chairman and not less than four members to be appointed by the provincial government in terms of Section 3 of its Act. However, they pointed out that the PRA had not been lawfully constituted and the appointments of chairperson and members were in violation of its Act. They said all the actions, decisions and orders passed by the so-called authority, including its rules were without lawful authority and of no legal force.

The petitioners requested the court to declare the PRA establishment unconstitutional in addition to a declaration that the province did not have any legislative power to validate unconstitutional acts through the Amendment Act. They urged the court to declare that the recovery of the sales tax through the PRA unconstitutional.

The PRA opposed the petitions for being not maintainable and defended its power to recover 16 percent sales tax on services. It said all the actions of the PRA chairman had been protected through an amendment to its Act.

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