Single bench decision against PRA suspended

LAHORE

A division bench of the Lahore High Court on Thursday suspended decision of a single bench against Punjab Revenue Authority after it was informed that the Punjab Assembly had approved it. 

The bench headed by Justice Muhammad Khalid Mehmood Khan passed the order on an intra-court appeal filed by the authority concerned and adjourned further proceedings until February 11. 

On January 26, Justice Syed Mansoor Ali Shah of the LHC declared the authority illegal after hearing 200 petitions. 

During the course of hearing, the counsel of the authority told the court that the Punjab Assembly had approved the ordinance under which the Punjab Revenue Authority was made and it could collect taxes. He said that the decision of the court to declare the authority as illegal was tantamount to interfering into the state policy and should be set aside.

After hearing initial arguments, Justice Khan suspended the decision of the single bench and issued notices to both sides for February 11. 

Previously, the petitioners’ counsels Advocate Imtiaz Rasheed Siddique, Shehryar Safdar, Salman Mansoor Awan, Advocate Salman Zaheer Khan and many other lawyers appeared in the court and said the authority was functioning illegal as it was not approved by the provincial legislative assembly. They submitted that the government passed an ordinance to give legal cover to the authority last year; however, it continued to function even after the ordinance lost it validity on January 22.

The counsels argued that they were shocked to receive a notice from Punjab Revenue Authority stating that the Punjab government has levied sales tax on your services and you are directed to get registered with the PRA, failing which fine of Rs 50,000 shall be imposed on them. The petitioners’ counsels pleaded that section- 3 of Punjab Sales Tax on Services Act 2012 was illegal and invalid and contrary to Articles 2A, 8, 9, 17, 18 and 25 of the constitution 1973. They said notices issued to them for compulsory registration with the PRA were also unlawful. 

They said the Punjab Sales Tax on Services Act, 2012 has been promulgated in the Province of Punjab with effect from July 1, 2012. The counsels also argued that in the Second Schedule of the PST Act, services provided by the travels agents and tour Operators were made subject to tax at the rate of 16pc, whereas neither the airline nor the Hajj and Umrah services had been made subject to the said tax. The petitioners’ counsels stated the first and second schedule of PST Act as far as it related to the imposition of service tax on travel agents and tour operators and any subsequent action taken by the PRA are unconstitutional, illegal, coercive, discriminatory and without lawful authority, based on policy that is malafide in its spirit and was of no legal effect.

They maintained that imposition of tax shall dramatically deplete the travel agency business in Punjab as the said Tax was not levied elsewhere and the travelers could approach any other travel agent outside the province to purchase a travel ticket. They submitted that without ignoring the fact that the travel agents were already registered with the FBR and were paying 20 percent as Federal Excise Duty therefore, the need to register with the PRA shall elevate the administrative burden on the travel agents to file monthly return with the FBR and with the PRA at the same time. 

They pointed out that PST Act its first and second schedule as much as it related to the travel agents or tour operators might very kindly be declared as illegal, incompetent and without lawful authority and also being discriminatory and against the fundamental rights of the petitioners. They had also prayed to the court to declare the notices of PRA as well as its formation as illegal and against the law.