SC Revokes Stay Order Against Tax On Cellular Top-up

ISLAMABAD: The Supreme court on Wednesday declared that it has nothing to do with restraining cellular companies from deducting withholding tax and other charges on cellular top-up so pre-paid mobile phone consumers would have to pay all the taxes after the pronouncement of the court verdict in the matter from now.

However, nothing has been expressed in short order whether there would be a retrospective effect of the decision so apparently, the ball is in the court of Federal Board of Revenue and the cellular companies overtime period of tax imposition.

Since June 2018, the mobile phone consumers were exempted from paying any tax over the usage of cell phone in response to a stay order, issued by the former Chief Justice Mian Saqib Nisar in a suo motu case where directives were issued to cell phone companies to refrain from deduction of any tax from the consumers on charging of pre-paid card till final adjudication of the matter.

On Wednesday, Chief Justice Asif Saeed Khan Khosa announced a short order while heading a three-member bench of Justice Qazi Faez Isa and Justice Ijazul Ahsan plainly saying that apex court will not intervene in public revenue and tax collection propositions.

Meanwhile, appearing before the bench on behalf of the Punjab Revenue Authority (PRA) in the matter, Barrister Syed Ali Zafar argued that the Supreme Court had passed interim orders under which the sales tax charged on telecommunication services under the calling cards were suspended.

Barrister Zafar contended that his client alone could not recover a sum of more than Rs.27 Billion so far, adding that Article 184(3) jurisdiction could only be exercised if the matter is of public importance as well as enforcement of fundamental rights but in the matter in hand jurisdiction has been assumed by the top court on a note put up by the Human Rights Cell of the Court.

Barrister Zafar further argued that under Article 184(3) it was a requirement that before exercising this jurisdiction, the Supreme Court must apply its mind and come to the conclusion that prima facie there was a matter of public importance involving enforcement of fundamental rights.

Citing a number of the verdict in order to substantiate his arguments, Barrister Zafar said that imposition of any kind of tax or fee is exclusively prerogative of the sovereign power of the Parliament and provincial assemblies under the law of the land.

The counsel further argued that if a tax is challenged, then the appropriate procedure under the Constitution is that the case should first be filed by an aggrieved party under Article 199 of the Constitution before High Court saying after which the top court can examine the validity of tax laws while exercising its appellate jurisdiction in a matter.

As regards the imposition of sales tax on the services under the Punjab Sales Tax Act, 2012, he submitted that the tax was being levied in accordance with law and under the provisions of valid law and no one was aggrieved by it nor had it been challenged being contrary to any of the fundamental rights enshrined in the Constitution and, hence, the suo moto proceedings undertaken by the court should be disposed off.

After hearing the federation, the bench reserved verdict. Then the bench announced the judgment in the matter while disposing off the case, holding that the top court will not interfere in this revenue matter.

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