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April 8, 2021

Govt grilled for imposing Rs700b taxes through ordinance

National

April 8, 2021

ISLAMABAD: The parliamentarians belonging to the opposition parties have grilled the government for the imposition of Rs 700 billion taxes and levies through presidential ordinance, terming it an unconstitutional and deliberate effort to bypass the parliament.

The opposition members criticized the State Bank of Pakistan (SBP) Amendment Bill 2021 approved by the federal cabinet and the Ministry of Parliamentary Affairs going to lay before the National Assembly anytime in the near future.

The government conceded before an NA panel that the parliament is sovereign and the cabinet’s approved bill will be tabled before the parliament and will be passed with the assent of the parliament. The National Assembly Standing Committee on Finance and Revenue which met under the chairmanship of Faizullah from the ruling PTI decided to defer approval on the SBP Amendment Bill and Tax Laws Amendment Bill 2021.

PML-N leader Ahsan Iqbal expressed his apprehension during the proceedings of the National Assembly Standing Committee on Finance that the government could now announce the federal budget through presidential ordinance if the parliament does not exercise its powers to restraint executives from bulldozing the sovereignty of the parliament.

However, Advisor to Prime Minister on Parliamentary Affairs Babar Awan in his written reply before the NA panel submitted that there were 17 ordinances on money matters that were promulgated from 2008 to 2018 in the tenures of the PPP and the PML-N. He stated that the president is part of parliament in terms of Article 50 of the Constitution of Pakistan. The president may promulgate an ordinance under Article 89 of the Constitution on any subject enumerated on the Federal Legislative List. An ordinance promulgated on money matters in terms of Article 73 (2) will be laid in the National Assembly as per Article 89 (2) of the Constitution of Pakistan.

Ahsan Iqbal said if they committed any wrong during their tenure, it could not be endorsed. Two wrongs could not make excuse for its continuation so money bill through ordinances should be discontinued.

PPP leader Naveed Qamar opposed the move and stated that there was the need to differentiate it in the aftermath of 18th Constitutional Amendment. Hina Rabbani Khar belonging to the PPP also opposed this move and said all such ordinances were promulgated on the excuses of urgency because of conditions of multilateral creditors.

Faizullah said the sovereignty of parliament should be protected but how the opposition members could term it unconstitutional when they had promulgated 17 ordinances during their tenures.

Ahsan said if the parliament rejects this proposal, the government would continue charging during the timeframe of these ordinances for 120 days. He cited that the principle of no taxation without representation was breached with promulgation of ordinances having financial impact of Rs 700 billion. Ahsan has also written a letter to the National Assembly speaker, stating that at the outset, kindly note, while an ordinance is a temporary legislation, its consequences have permanent effects on the rights and liabilities of taxpayers and citizens, as is envisaged under Clause (c) of Article 264 of the Constitution.

The president’s power to legislate through an ordinance is provided in Article 89 of the Constitution. These requirements must be met for the promulgation of an ordinance and for it to be constitutionally valid. The courts of Pakistan have on multiple occasions examined the constitutionality of ordinances on the touchstone of these requirements provided in Article 89 of the Constitution. The West Pakistan High Court (Lahore) – as it then was – in a 1959 decision observed that if an ordinance is promulgated without circumstances requiring immediate action, such promulgation is mala fide. The court held that it is within the courts’ jurisdiction to examine the circumstances necessary to take immediate action, which is a precedent for the promulgation of an ordinance.

In the present instance, the ordinance has been promulgated without any circumstances necessitating immediate action. In this regard, it is important to note that the 28th Session of the National Assembly of Pakistan had concluded on February 4, 2021 – only seven days prior to the promulgation of the Ordinance on February 11, 2021. Subsequently, the 29th Session of the National Assembly commenced on February 19, 2021. By amending taxing statutes in the interim period of 15 days, the federal government has bypassed the normal method of legislation as provided in Article 73 of the Constitution.

In the absence of any circumstances that required legislation to take effect within the period between the 28th and 29th sessions of the National Assembly, legislation under Article 89 cannot be constitutionally valid.