The Supreme Court will announce on Friday (today) its judgement on the raise in the General Sales Tax (GST) rate by one percent without approval from Parliament. The Supreme Court had taken a suo motu notice on the implementation of GST increase a day after Finance Minister Ishaq Dar presented the budget 2013-14 in parliament. It queried the government's authority to impose the increment without prior approval from Parliament.
A three-judge bench of Chief Justice Iftikhar Muhammad Chaudhry reserved its judgement in the matter on Thursday, saying the court would announce its short order in the case on June 21 (today). During the course of proceedings, the Chief Justice said the court had nothing to do with the imposition of a tax but had concerns on the procedural mechanism employed to implement GST increase from 16 to 17 percent. He repeatedly stated that parliament would play no role if interim procedure to implement the GST was allowed in the current matter.
The Chief Justice observed that Provisional Collection of Taxes Act 1931 could be declared null and void. Attorney General for Pakistan (AGP) Munir A Malik prayed the bench if the court announced verdict against the Act then its implementation should be subject to prospective effect rather than retrospective effect. He further pleaded that he realised the lacunae in the legislation of the said Act, but at the same time he cited Peshawar High Court verdict regarding the validity of the Act, saying the High Court had upheld it on the touchstone of Article 48 of the 1962 Constitution.
Salman Akram Raja, the counsel for Oil and Gas Regularity Authority (Ogra), told the bench that under Article 63 (A) no treasury member could oppose the proposed recommendations of the Finance Bill 2013 due to which the proposed increase of the GST from 16 to 17 percent was passed on to petroleum product prices.
Raja submitted that the SNGPL charged 16 percent from the CNG station owners for the supply of natural gas whereas 9 percent tax was charged for the compression of gas, adding that all the amount was deposited in the national kitty. The bench observed that the one percent increase in GST rate resulted in price hike as edibles prices surged to 15 percent.
Appearing on behalf of Iqbal Zafar Jhagra in the matter, Ikram Chaudhry prayed to the bench to declare the Provisional Collection of Taxes Act 1931 ultra vires to the Constitution. He urged the bench to direct Ogra to devise a strategy to recover the amount, which registered or unregistered petrol pumps charged from the consumers under the pretext of proposed GST raise, saying all such amount should be deposited to the Baitul Maal for the welfare of people. He further argued that just through one 'Declaration' billions of rupees were taken out from the pockets of Pakistanis. Later, the bench reserved its judgement in the matter.