A division bench of the Lahore High Court (LHC) on Thursday suspended decision against functioning of Punjab Revenue Authority (PRA) after it was informed that Punjab Assembly had approved it. The bench adjourned the further hearing to February 11 in an intra court appeal filed by the authority concerned. On January 26, Justice Syed Mansoor Ali Shah of the LHC had declared the authority as illegal.
Earlier, the counsel for the authority told the court that Punjab Assembly had approved the ordinance under which the Punjab Revenue Authority was made and it could collect taxes. He said that the decision of the court to declare the authority as illegal was tantamount to interfering into the state policy and should be set aside. The respondents' counsel contended that the authority was functioning illegal as it was not approved by the provincial legislative assembly. They submitted that the government passed an ordinance to give legal cover to the authority last year. However, it continued to function even after the ordinance lost it validity on January 22.
The counsels argued that they were shocked to receive a notice from PRA stating that the Punjab government has levied sales tax on your services and you are directed to get registered with the PRA, failing which fine of Rs 50,000 shall be imposed. They said notices issued to them for compulsory registration with the PRA were also unlawful.
The counsel also argued that in the Second Schedule of the Punjab Sales Tax Act, services provided by the travels agents and tour operators were made subject to tax at the rate of 16 percent, whereas neither the airline nor the Hajj and Umrah services had been made subject to the said tax. The petitioners' counsels stated the First and Second Schedule of PST Act as far as it related to the imposition of service tax on travel agents and tour operators and any subsequent action taken by the PRA are unconstitutional, illegal, coercive, discriminatory and without lawful authority.