GURGSON DRY CLEANERS through Proprietor Muhammad Ishaq and 3

' This petition challenges the Punjab Sales Tax Ordinance, 2002 and Islamabad Capital Territory (Tax on Services) Ordinance, 2001 being unConstitutional. The matter pertaining to the Punjab Sales Tax Ordinance-II of 2000 has already been dealt with in Writ Petition No,2892 of 2001 filed by the petitioner.

2. Mr. Shaukat Aziz Siddiqui, learned counsel for the petitioners contends that since no tax on services is envisaged by the Federal and Concurrent Legislative list in the Constitution the said enactment is void, as according to him Federal Legislature has no lawful authority to make a law taxing services. He has further contended that the registration of the petitioners is being sought under the Sales Tax Act, 1990 and this is illegal inasmuch as the Constitution does not provide for imposition of Sales Tax on Services being provided by the petitioners.

3. Ch. Muhammad Tariq, learned D.A.-G. In his address stated that Article 142(d) of the Constitution vests a complete authority in Federal Legislature to make the said law. Mrs. Farhat Zafar, learned counsel appearing for Department states that the provisions of Sales Tax Act, 1990 have been made applicable under the said Ordinance only as procedural measures to recover the said tax scope whereof has been defined in section 3(1) of the Ordinance.

4. Islamabad Capital Territory (Tax on Services) Ordinance, 2001 has been promulgated by the President of the country in exercise of powers enabling him to promulgate the said law under the Provisional Constitution Ordinance No,1 1999 as amended from time to time. Section (1) provides the title of the law. According to section 1(2) the law extends to whole of Islamabad Capital Territory and section 1(3) provides that it shall come into force at once. I may note here that the Ordinance was published in Gazette of Pakistan Extraordinary, dated 18-8-2001. Section 2 contains interpretation clause providing that unless there is anything repugnant in the subject or context, the words and expression used but not defined shall have the same meaning as in the Sales Tax Act, 1990. I deem it proper to reproduce section 3 of the said Ordinance hereunder:--

(3) Scope of tax.---(1) Subject to the provisions of this Ordinance, there shall be charged, levied and paid a tax known as sales tax at the rate of fifteen per cent of the value of the taxable services rendered or provided in the Islamabad Capital Territory.

(2) The tax shall be charged and levied on the services specified in the Schedule to this Ordinance in the same manner and at the same time, as if it were a sales tax leviable under sections 3, 3A or 3AA, as the case may be, of the Sales Tax Act, 1990.

(3) All the Provisions of the Sales Tax Act, 1990 rules made and notification, orders and instructions issued thereunder shall, mutates mutandis, apply to the collection and payment of tax under this Ordinance insofar as they relate to:--

(a) manner, time and mode of payment,

(b) registration and de-registration;

(c) keeping of records and audit;

(d) enforcement and adjudication;

(e) all other allied and ancillary matters.

' As per Item No,6 of the Schedule referred to in section 3(2) services provided or rendered by Laundary and dry Cleaners are included in the services upon which the tax is to be charged levied and paid under section 3(1) of the said Ordinance within the limits of Islamabad Capital Territory.

5. Now coming to the said contentions of the learned counsel for the parties and the address of learned DAG. I have examined the Federal' Legislative list and the Concurrent List with reference to Article 70 of the Constitution and I do find that the legislation with reference to services or tax on services is not catered for in any of the said lists. However, to my mind, nothing turns on the same in favour of the petitioners as Article 142(d) of the Constitution confers exclusive powers upon the Federal Legislature to make laws with respect to matters not enumerated in either of the said lists for such areas in the Federation as are not included in any Province. Article 1 (2) of the Constitution definesthe Territory of Pakistan to be comprising of Provinces of Balochistan, N. W. F.P, Punjab and Sindh, Islamabad Capital Territory, FATA and such States and Territories as are or may be included in Pakistan, whether by accession or otherwise. Now the Islamabad Capital Territory, therefore, is a territory not included in any Province within the meaning of Article 142(d) of the Constitution. Thus two conditions imposed by the Constitution for exercise of exclusive powers vesting in the Federal Legislature to make laws i,e, non-enumeration of the matter in either of the said two lists and area not included in any Province, very much exists. The said first contention of the learned counsel, therefore, is without any force and is rejected.

6. So far as the said second contention is concerned, I find the same to be misconceived. A tax on sale has not been imposed within the meaning of Sales Tax Act, 1990. What has been made chargeable, leviable and payable is a tax on the value of taxation services specified in the Schedule to the said Ordinance. Simply by stating that the tax will be known as Sales Tax would not make it a tax on sale. On the other hand, it has been specifically provided that it will be fixed on the prescribed rate of the value of taxable services rendered or provided in the Federal Capital. The procedure, however, for charging, levying and payment of tax has been adopted with reference to the provisions of the Sales Tax Act, 1990. Therefore, the arguments with reference to concept of a sale, goods, taxable activities, taxable goods and taxable supply would be having no relevance while dealing with the said impugned Ordinance. What has been made taxable by the Federal Legislature in exercise of powers under Article 142(d) of the Constitution are the services rendered by the petitioners within the Federal Capital. The mere adoption of procedure in the said Sales Tax Act, 1990 would not in any manner be derogatory of the scope of tax defined in section 3(1) and section 3(2) of the said Ordinance.

7. The writ petition is accordingly dismissed without any order as to costs.