960407

Amendment in Ordinance

LHC stays 6-month IT

recovery from 4 banks,

Kohat Cement

RECORDER REPORT

LAHORE: The Lahore High Court Rawalpindi Bench has stayed the recovery of income tax for the period of January to June 1995 from four private scheduled banks and a private company under the amendment introduced in the Income Tax Ordinance, 1979, through Finance Act, 1995.

The Single Bench, comprising Justice Jafar Hussain Hashmi, issued orders of staying the recovery and sent the cases back to the Chief Justice of LHC to place it with other alike matters.

The Court also issued notice to Attorney General of Pakistan to assist the Court in this matter.

The Court has also issued notices to the Central Board of Revenue (CBR), Commissioner and Deputy Commissioner, Income Tax, Rawalpindi region, to file para-wise comments in the case.

Four private scheduled banks, namely Schon Bank Limited, Askari Commercial Bank Limited, Bank Commerce Al-Habib Limited, and Metropolitan Bank Limited and a private company Kohat Cement Company Limited had moved writ petitions challenging the amendment introduced in the Income Tax Ordinance, 1979, through Finance Bill, 1995.

Under the said amendment these companies were asked to adopt the fiscal year for their financial closure by filing their returns of 18-months from January 94 to June 95.

Counsel for the petitioners Mian Saqib Nisar, advocate, argued that the amendment was violative of Articles 2(A) and 4 of the Constitution and the change could not be imposed retrospectively. He argued that the instructions of the CBR in this regards were illegal, void and without any constitutional jurisdiction.

It was prayed that the new section included in the Income Tax Ordinance, 1979, through Finance Bill, 1995, may be declared ultra vires of the Constitution and the SRO No 4 issued by the CBR in this regards as illegal and void, too.

It was also prayed that the CBR may be restrained from charging any tax for the six-month period exceeding the settled income year of 12 months of the Finance year or the calendar year, as during the transition period of change-over of income year the benefit should ensure in favour of the petitioner.

It was further prayed that the petitioner may be allowed to retain the calendar year as had been done in the Insurance Companies' and rice exporters' cases.