through Hafeezullah Malik, Lahore HAFEEZULLAH MALIK & COMPANY vs PROVINCE OF PUNJAB through Secretary Finance

' The appellant is a custom agent duly licensed under section 207 of the Customs Act, 1969 and is aggrieved by the promulgation of Punjab Sales Tax Ordinance, 2000, which provides for levy of sales tax on services rendered or provided by the appellant in the Province of the Punjab and which further provides that the tax shall be charged and levied on the services in the same manner and at the same time as if it were sales tax leviable under sections 3, 3A or 3AA of the Sales Tax Act, 1990 and instructions which were issued for collection of the aforesaid tax since 1st July, 2001.

2. According to the appellant, .The Ordinance is beyond legislative competence of the Government of Punjab. The learned Single Judge while disposing of W.P. No, 17315 of 2001 inter alia made the following observations:-- "Both learned counsel referred to the provisions of Article 142 of the Constitution with the objection of supporting their respective contentions. Learned counsel for the respondents contended that the impugned levy should be considered in the context of the provisions of Item 49 of Part-I of the Federal Legislative List, which provides as under:-- 'Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed'.

' According to the respondents, since the sale and purchase of services was not included in Item 49 or in any other item of the Federal Legislative List, it necessarily meant that the power to tax the sale and purchase of services fell within the exclusive domain of the Provincial Legislature. This contention does appear to have merit because Item 49 is confined to sales and purchases of goods and not services.

' Item 44 refers to duties of excise and it has been held by the Honourable Supreme Court in the case titled Hirjina & Co. v. Islamic Republic of Pakistan and another (1993 SCM R 1342) that excise duties can be levied on services also. This circumstances, however, by itself does not mean that a tax on the sale of services cannot be levied by the Provincial Legislature.

' It is not disputed that the petitioner is selling his services to various importers and exporters. The sale of such services, as distinct from the sale of goods. Falls within the Provincial domain because it has not been specified in any of the items included in the .Federal Legislative List.

The Distinction between services and goods is obvious. Even the Central Excise Act refers to goods and services separately.

However, in the Federal Legislative List taxes in respect of sales are only mentioned in Item 49 of the Federal Legislative List and the same is confined to goods only.

' In view of the above discussion, it becomes apparent that the Provincial Government is constitutionally authorized to levy a tax on the sale of services notwithstanding the fact that Federal Government may levy an excise duty on such services by virtue of Item 44 of the Federal Legislative List. In this view of the matter, I find that the Punjab Sales Tax Ordinance, 2000 is not ultra vires the Constitution. As a consequence, this petition is dismissed. "

3. It may be pointed out that a Division Bench of this Court while disposing of I.C.A. No, 407 of 2001 inter alia came to the following findings:- "In view of the above, holding that the Punjab Sales Tax Ordinance, 2000 does not militate against' the Constitutional provisions, these Intra Court Appeals are dismissed and the order of the learned single Judge is maintained. However, there shall be no order as to costs."

4. The Punjab Sales Tax Ordinance, 2000 (Punjab Ordinance No, II of 2002) in its schedule reflects the services to which the Ordinance is made applicable and these are as follows:-

(a) Services provided or rendered by hotels;

(b) Services provided or rendered by marriage halls and lawns;

(c) Services provided or rendered by clubs; and

(d) Services provided or rendered by caterers.

(2) Advertisements on T.V. And Radio excluding Advertisement,---

(i) If sponsored by a Government Agency for health education;

(ii) if sponsored by Population Welfare Division relating to Sathi educational promotion campaign funded by USAID; and

(iii) public service message if telecast on television by World Wildlife Funds for Nature and UNICEF.

(3) Services provided or rendered by persons authorized to transact business on behalf of others:

(a) customs agents;

(b) ship chandlers; and

(c) stevedors.

(4) Courier Services.

(5) Services Provided or rendered for Personal care by beauty Parlours, beauty Clinics, Slimming Clinics.

(6) Services provided or rendered by Lanudries and dry cleaners".

5. The appellant is covered by the Schedule to the Ordinance which has already been held valid law. Under the circumstances, we do not wish to interfere in the findings of the learned Single Judge being impugned. Dismissed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.