Messrs PAKISTAN TELECOMMUNICATION COMPANY LTD. through General
This constitutional petition was filed by Messrs Pakistan Telecommunication Company Ltd., a company incorporated under the Companies Ordinance, 1984, assailing the imposition of professional tax by the respondents under section 3 of the Punjab Finance Act, 1977. The core legal question was whether a province has the legislative competence to impose a professional tax on a corporation, given the division of legislative powers under the Constitution. The Lahore High Court held that the petitioner, being a body corporate and a corporation, falls exclusively within the domain of the Federation under Item No. 48 of Part I of the Federal Legislative List, which empowers only the Federation to levy taxes on corporations. Consequently, the Court ruled that the levy of professional tax by the province or a local authority on a corporation is unconstitutionally impermissible. The petition was accordingly allowed.
- Whether a province has the legislative competence to impose a professional tax on a corporation?
- Does the power to levy taxes on corporations fall exclusively within the Federal Legislative List?
- Is the imposition of professional tax by a provincial authority on a body corporate constitutionally permissible?
- Section 3, Punjab Finance Act 1977
- Companies Ordinance 1984
' The petitioner is a company incorporated under the Companies Ordinance, 1984. It has assailed the imposition of professional tax on it by virtue of section 3 of the Punjab Finance Act, 1977 by the respondents. The first contention of learned counsel for the petitioner is that a tax on corporations can only be imposed and levied by the Federation. To support this contention he has referred to Item No,48 of Part I of the Federal Legislative List which reads as under: "Taxes on corporations".
' This contention does appear to be well-founded. The petitioner being a body corporate is a corporation and, as such, it follows that a tax on it cannot be levied by the province because the Federation, by virtue of the aforesaid entry in the Federal Legislative List, has the exclusive power to do so.
2. The learned Law Officer has not been able to advance any argument in response to the submission made by learned counsel for the petitioner.
3. I have already held in number of cases that the levy of a professional tax by a province or by a local authority on a corporation such as the petitioner, is not Constitutionally permissible. This petition is, therefore, also allowed.
Cited by 4 cases
- NEW CHAUDHRY FIBER through Sale Proprietor vs EXCISE AND TAXATION 2015 PLD Lahore 369
- Messrs SHAMIM & CO vs TEHSIL MUNICIPAL ADMINISTRATION, MULTAN CITY 2004 YLR 366
- Messrs CRESCENT JUTE PRODUCTS LTD. through Director vs GOVERNMENT OF THE PUNJAB, AGRICULTUE DEPARTMENT through Secretary, 2004 PLD Lahore 686
- M/s. CRESCENT JUTE PRODUCTS LIMITED, LAHORE through its DIRECTOR vs 2005 PLJ Lahore 490