A Peshawar High Court bench has declared that industries operating in are not liable to any tax which wasn't there prior to the enactment of the 25th Amendment. Justice Roohul Amin Khan and Justice Nasir Mahfooz responded favorably to around 25 petitions filed by industrialists in the tribal districts, and were subsequently exempted from various taxes regarding their utility bills issued after the merger with Khyber Pakhtunkhwa. To avail tax immunity the petitioners were not required to obtain any tax exemption certificates provided under Section 159 of the Income Tax Ordinance.
Shumail Ahmed Butt, the lawyer representing the petitioners informed the court that for January 2019 the Tribal Areas Electric Supply Company (TESCO) had sent bills with unprecedented heavy and exorbitant taxes without legal justification. He further stated that the federal governments Economic Coordination Committee had approved tax exemptions and incentives for a period of five years to facilitate the local economy,from Jun 1, 2018, to Jun 30, 2023.
The court ruled, "Needless to mention that Section 235 of the Income Tax Ordinance, whereby advance tax may be collected on account of electricity consumption, has been made not applicable by the SRO No1213 to the merged areas. Likewise, vide SRO No1212, all types of sales tax recoverable under Sale Tax Act, 1990, have not been made applicable and the residents of the merged areas have been exempted from whole of the sales tax on supply made until June 30, 2023...Looking fairly at the preamble of the SROs and language used therein, one can arrive at an irresistible conclusion that the Federal Government, after merger of Fata into the settled area, had decided that tax laws shall be applied phase-wise to the defunct Fata within a transition period of five years.”
Shumail Ahmed Butt, the lawyer representing the petitioners informed the court that for January 2019 the Tribal Areas Electric Supply Company (TESCO) had sent bills with unprecedented heavy and exorbitant taxes without legal justification. He further stated that the federal governments Economic Coordination Committee had approved tax exemptions and incentives for a period of five years to facilitate the local economy,from Jun 1, 2018, to Jun 30, 2023.
The court ruled, "Needless to mention that Section 235 of the Income Tax Ordinance, whereby advance tax may be collected on account of electricity consumption, has been made not applicable by the SRO No1213 to the merged areas. Likewise, vide SRO No1212, all types of sales tax recoverable under Sale Tax Act, 1990, have not been made applicable and the residents of the merged areas have been exempted from whole of the sales tax on supply made until June 30, 2023...Looking fairly at the preamble of the SROs and language used therein, one can arrive at an irresistible conclusion that the Federal Government, after merger of Fata into the settled area, had decided that tax laws shall be applied phase-wise to the defunct Fata within a transition period of five years.”