ISLAMABAD - The Supreme Court issued a written order in a suo moto case regarding deduction of high tax and other unreasonable charges by mobile companies in Pakistan and directed the federation and the provinces to submit written responses to the legal questions

The top court in its four-page written order raised a question whether this matter can be proceeded in exercise of the jurisdiction of this court under Article 184(3) of the Constitution.

The top court said that if the above-mentioned question is determined in affirmative then the response of governments should contain the scope of whether advance tax under section 236 can be levied/recovered from non-taxpayers under section 236 of the Income Tax Ordinance read with section 147 and section 2(66).

The top court further asked whether imposition of sales tax by the provinces can be resorted to with regard to the consumers under the different sales taxes regime of provinces.

Lastly, the top court asked whether Federal Excise Duty can be imposed on service provide by Cellular Mobile Operators.

The top court directed that the response of respective governments should be accompanied with the applicable legal provisions and the amounts of taxes that were recovered for the period from 30th June, 2017 till 30th June, 2018.

“The concise statements should be jointly signed by the Secretaries, Finance and Law and Advocate Generals of the Provinces. As regards the Federation such concise statement should be signed by the Secretaries, Revenue and Law, Advocate General, Islamabad and Attorney General for Pakistan, if they do not concur they can file separate concise statements.”

“In case the cellular mobile operators want to file responses to the questions noted above, they may do so.”

The matter pertains to the levy/imposition of advance income tax by the Federation, Federal Excise Duty by the Federation in the Islamabad Capital Territory, Sales Tax on Services by the Provinces and the imposition by the Cellular Mobile Operators, which have different nomenclatures for including 10 percent service charge and maintenance charges.

The representing cellular mobile operators stated that they stopped collecting levy/imposition/service charges/maintenance charges and do not intend to do so.

However, the attorney general raised the question as to whether this matter could be considered within the constitutional jurisdiction of this Court in exercise of powers under Article 184(3) of the Constitution as, according to him, it does not meet condition of it attending to Fundamental Rights enshrined in the Constitution.

The AGs of KP and Islamabad and Additional AGs of Punjab, Sindh and Balochistan supported the attorney general with regard to his contention as to jurisdiction of this Court under Article 184(3).

The attorney general further stated that levy/imposition of said taxes was done by an interim order dated 11th June, 2018 of this Court without holding the provisions in the Income Tax Ordinance, 2001 and the Sales Tax on Services Acts of the Provinces and as such it would be appropriate that the matter may be adjudicated at an early date.

The two-judge bench headed by Justice Qazi Faez Isa and comprising Justice Ijazul Ahsan noted that the referred interim order was passed by a three member Bench.

“Let this matter be heard by a three member Bench and the matter be referred to the Chief Justice of Pakistan for the constitution of such bench.”