ORDER SHEET

IN THE HIGH COURT OF SINDH AT KARACHI

C.P. Nos.D-5492, 5493 & 5494 of 2022

___________________________________________________________________ Date Order with signature of Judge

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C.P. No.D-5492/2022

FRESH CASE:

1. For order on CMA No.23472/2022 (Urgent).

2. For order on CMA No.23473/2022 (Exemption).

3. For order on CMA No.23474/2022 (Stay).

4. For order on CMA No.23500/2022 (u/s.151 CPC).

5. For hearing of main case.

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C.P. No.D-5493/2022

FRESH CASE:

1. For order on CMA No.23475/2022 (Urgent).

2. For order on CMA No.23476/2022 (Exemption).

3. For order on CMA No.23477/2022 (Stay).

4. For order on CMA No.23499/2022 (u/s.151 CPC).

5. For hearing of main case.

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C.P. No.D-5494/2022

FRESH CASE:

1. For order on CMA No.23478/2022 (Urgent).

2. For order on CMA No.23479/2022 (Exemption).

3. For order on CMA No.23460/2022 (Stay).

4. For order on CMA No.23498/2022 (u/s.151 CPC).

5. For hearing of main case.

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Dated; 22^nd September 2022

Dr. Farogh Naseem, Advocate for Petitioners.

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1. Urgency granted.

2. Exemption granted subject to all just exceptions.

3,4&5. Through instant petitions, the petitioners’ Banks, who claim to be Prime Dealer License Holder in respect of investments to be made in Federal Government Securities, have expressed their grievance against an amendment introduced through Finance Act, 2022 in Rule 6-C (6-A) of the VIIth Schedule of the Income Tax Ordinance, 2001, whereby, according to learned counsel for the petitioners, the rates prescribed for the purpose of taxable income attributable to the Federal Government Securities through Finance Act, 2021, which was made applicable for the tax year 2022, have been enhanced for the tax year 2022, which amounts to taxing past and close transaction, as according to learned counsel for the petitioners, the petitioners have already made investment during fiscal year 2021 i.e. 01.01.2021 to 31.12.2021 keeping in view the amendment made in the Finance Act, 2021, wherein, the rates were required to be applied for tax year 2022. It has been contended by the learned counsel that though the Federal Government has the authority to enhance the rate of taxes through Finance Act keeping in view the Constitutional mandate, however, once a taxpayer is given an option to apply for obtaining the license as Primary Dealer and to make investment in the Federal Government Securities while referring to a particular rate of tax to be applied on such securities, the Government cannot subsequently enhance the rates to be applied retrospectively for the same tax year i.e. tax year 2022. In support of his contention, learned counsel for the petitioners has placed reliance on the cases of ANWAR YAHYA v. FEDERATION OF PAKISTAN (2017 PTD 1069) and AL-TECH ENGINEERS AND MANUFACTURERS v. FEDERATION OF PAKISTAN (2017 SCMR 673).

Contentions raised require consideration. Let pre-admission notice be issued to the respondents, as well as Attorney General for Pakistan under Order XXVII-A, C.P.C., to be served through first three modes, for 05.10.2022, when parawise comments, if any, shall be filed with advance copy to the leaned counsel for the petitioners.

However, at this juncture, learned counsel for the petitioners submits that since the petitioners are required to submit their tax returns for the tax year 2022, whereas, the last date of its submission is 30.09.2022, therefore, requests that as an interim measure, petitioners may be allowed to furnish their returns on the basis of tax rates as given in the Finance Act, 2021 in terms of Rule 6-C (6-A) of the VIIth Schedule of the Income Tax Ordinance, 2001 prior to the amendment introduced through Finance Act, 2022. This request of the learned counsel for the petitioners will be examined on the next date of hearing, however, till then, if the petitioners submit their returns of income tax for the tax year 2022 without making payment of the differential amount pursuant to the amendment in terms of Rule 6-C (6-A) through Finance Act, 2022 the respondents cannot take any adverse action against the petitioners.

J U D G E

*Farhan/PS*