Pakistan: PML-N govt faces first ‘embarrassment’ at SC

Daily times

The Supreme Court on Friday questioned the recent hike in the prices of petroleum products through implementation of the hiked general sales tax without the approval of parliament. Although the court did not issue a stay order over the hike in petroleum prices but it observed that parliament had not yet approved the finance bill, therefore, it was not possible to implement the tax on petroleum products. The court also directed attorney general of Pakistan to seek instructions from the authorities concerned on the issue and assist it on June 18. The court warned that it may suspend FBR’s notification regarding one percent increase in sales tax without parliament’s approval. A three-member bench of the apex court headed by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry heard a suo motu case pertaining to recent hike in petroleum prices. The newly elected government has proposed one percent increase in sales tax in the budget. The chief justice took suo motu notice of the issue on a note of the court registrar and issued notices to attorney general and other concerned and also sought a copy of the notification from the authorities concerned. The chief justice further stated that the government has the powers to implement the tax but at the same time it does not have the authority to start collecting GST before the approval of finance bill. The bench observed that the bill was yet to be approved by parliament and observed that the people were suffering from this increase. While addressing the attorney general, Justice Iftikhar stated that the budget been neither been approved nor signed by the president then on what grounds has the government started collecting increased sales tax. The chief justice further said that the finance minister, while presenting the budget before the National Assembly, had just proposed one percent increase in sales tax. Appearing on notice, Attorney General Munir A Malik submitted that nothing could be done without the approval of parliament and as such the tax can also not be imposed without its approval. The attorney general also read out the Provisional Collection Taxes Act 1931 and contended that the recent increase in the sales tax was made under the said Act, adding that it was meant for controlling hoarding. However, the chief justice said that hoarding itself is a crime and both the federal and provincials government failed to control it. Attorney General Malik contended that the previous government had done the same. The chief justice however, said that whatever had been done was illegal and the authorities should recover the amount. “Why you are sucking the blood of the people, it seems that the Federal Board of Revenue (FBR) is not aware of the parliamentary system,” the chief justice remarked, adding that prices of daily-use items have shot up abruptly across the country. During the hearing, Salman Akram Raja, counsel for Oil and Gas Regulatory Authority (OGRA), produced before the court the declaration and notification pertaining to the recent hike in petroleum prices, while a copy of the finance bill was also presented before the court by the FBR. The chief justice told the counsel for OGRA that increase in sales tax could not be made without amending the relevant Act. He further said that tax can be collected only in accordance with law. “Prima facie, whatever was done was totally illegal,” he remarked, adding that by doing so an extra burden was placed on the shoulders of the masses. Meanwhile, Justice Ejaz Ahmed Chaudhry observed that people hoard goods when prices come down and later sell them on higher prices. He further said that it is difficult to reduce prices once they have been raised. The OGRA counsel contended that the authority has issued a notification regarding increase in CNG and kerosene oil prices and imposed sales tax on CNG. The hearing of the case has been adjourned until June 18.