NAFEES DRY CLEANERS, WAHDAT ROAD, LAHORE VS GOVERNMENT OF PUNJAB
2001 P T D 2018
[Lahore High Court)
Before Malik Muhammad Qayyum, J
Messrs NAFEES DRY CLEANERS, WAHADAT ROAD, LAHORE
Versus
THE GOVERNMENT OF PUNJAB through Secretary Law and
Parliamentary Affairs Department, Lahore and another
Writ Petitions Nos.23053, 23048, 23049, 23052, 23054, 23055, 23056, 23057, 24420 of 2000 and 1636 of 2001, heard on 21/03/2001.
(a) Punjab Sales Tax Ordinance (II of 2000)‑‑‑
‑‑‑‑S.3‑‑‑Constitution of Pakistan (1973), Fourth Sehed., Items, Nos.49, 59, Arts.25, 142 & 199‑‑‑Constitutional petition‑‑‑Levy of sales tax on the services rendered by the dry cleaners‑‑‑Pleas of discrimination on the ground that no such tax had been levied on any other services and that sales tax could only be levied by the Federal Government in view of Entry No.49, Fourth Sched. to the Constitution read with Art‑142, thereof ‑‑‑Validity‑‑ Held, taxes levied on services rendered by any person were not covered by Entry No.49 of the Fourth Sched. to the Constitution‑‑‑Article 142 of the Constitution provided that if a matter was not covered by any entry in the Fourth Sched. to the Constitution, the same shall be the domain of the Provincial Government to legislate on the subject‑‑‑Article 25, Constitution of Pakistan prohibited discrimination within a class of persons but did not prohibit the classification as such‑‑‑Principles.
On the face of it, taxes levied on services rendered by any person were not covered by item No.49 of Fourth Schedule to Constitution of Pakistan (1973) Income Tax Ordinance. Item No.49 of the Constitution did not deal with the taxes on services rendered at all. Item No.59 of the Schedule also could not be relied upon by the assessee as it could not be said that the levy of sales tax on services was matter of incidental or ancillary to any matter enumerated in the Fourth Schedule of the Constitution.
According to Article 142 of the Constitution if a matter was not covered by any entry in the Fourth Schedule, it shall be the domain of the
Provincial Legislature to, legislate on that subject. That being so the contention that as the Federal Government was empowered to levy tax on the sales and purchases of goods imported, exported, produced, manufactured or consumed, it could also levy tax on services rendered could not be accepted.
Article 25 of the Constitution prohibited discrimination within a class of persons but did not prohibit the classification as such. The dry cleaners were a class apart and they could not claim that if the sales tax was not being levied on the services rendered by some other category of persons they were being discriminated against.
Section 3 of the Punjab Sales Tax Act only trade the procedure prescribed by the Sales, Tax Act, 1990 applicable for the purposes o1 assessment and recovery of the sales tax. This is a procedural provision arc did not in any way militate against law.
(b) Constitution of Pakistan (1973)‑‑‑
---- Art.25‑‑‑Equality before law‑‑‑Discrimination‑‑‑Article 25, Constitution of Pakistan prohibited discrimination within a class but did not prohibit the classification as such.
(c) Punjab Sales Tax Act (II of 2000)‑‑‑
‑‑‑‑S.3‑‑‑Sales Tax Act (VII of 1990), Preamble‑‑‑Provision of S.3, Punjab Sales Tax Act, 2000 only made the procedure prescribed by the Sales Tax Act, 1990 applicable for the purposes of assessment and recovery of sales tax‑‑‑Provision of S.3, Punjab Sales Tax Act, 2000 being a procedural provision, did not in any way militate against law.
M. S. Babar and M. M. Akram for Petitioner. Ch. Muhammad Ashraf, Asstt. A.‑G. for Respondent No. 1. Khan Muhammad Virk for Respondent No.2.
Date of hearing: 21st March, 2001.
JUDGMENT
This judgment shall dispose of Writ Petitions Nos.23053/2000, ]636/2001, 23048/2000, 23049, 23052/2000, 23054/2000, 23055/2000, 23056/2000, 23057/2000 and 24420/2000, in all of which levy of Sales Tax on the services rendered by the petitioner as Dry Cleaners, by the Punjab Sales Tax Ordinance, 2000, has been questioned on the touchstone of the Constitution.
2. According to the learned counsel for the petitioner the Sales Tax can only be levied by the Federal Government in view of Entry No.49 of the Fourth Schedule to the Constitution read with Article 142 thereof.
3. On the other hand, Mr. Khan Muhammad Virk, Advocate/Legal Advisor of the Sales Tax Department as also Ch. Muhammad Ashraf, learned Assistant Advocate‑General, have submitted that levy of the Sales Tax is not covered by Item No.49 of the Constitution, which deals with the taxes on the sales and purchases of goods imported exported, produced, manufactured or consumed and does not cover the services rendered by a person and, as such, it is open to the Provincial Legislature to impose the Sales Tax on the services rendered by any one.
4. In reply learned counsel for the petitioner has urged that the petitioners are being discriminated against in violation of Article 25 of the Constitution as no such tax has been levied on any other services. In the last it was argued that the respondents have acted without, any lawful authority in making the recovery in manner contrary to the procedure prescribed by the Sales Tax Ordinance, 2000.
5. None of the contentions raised by the learned counsel for the petitioner have any force. Item No.49 of the Constitution reads as under:‑‑‑
"Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed."
On the face of it these taxes levy on services rendered by any person are not covered by this provision. It will be appreciated that Item No.4y or the Constitution does not deal with the taxes on services rendered at all. Item No.59 of the Schedule also cannot be relied upon by the petitioner, as it cannot be said that the levy of Sales Tax on services is matter of incidental or ancillary to any matter enumerated in the 4th Schedule of the Constitution;
6. According to Article 142 of the Constitution if a matter is not covered by any entry in the 4th Schedule, it shall be the domain of the Provincial Legislature to legislate on that subject. That being so I am not able to accept the contention raised by the learned counsel for the petitioner that as the Federal Government is empowered to levy tax on the sales and purchases of goods imported, exported, produced, manufactured or consumed, it can also levy tax on services rendered. It is not out of place to mention that the excise duty which was leviable on the Dry Cleaners, has since been withdrawn.
7. So far as the argument that the petitioner has been discriminated against in violation of Article 25 of the Constitution, suffice it is to say that Article 25 of the Constitution prohibits discrimination within a class. of persons but does not prohibit the classification as such. The Dry Cleaners are a class apart and they cannot claim that if the Sales Tax is not being levied on the services rendered by some other category of persons they are being discriminated against. The last contention of the learned counsel for the petitioner is again not well‑founded. Section 3 of the Punjab Sales Tax Act only made the procedure prescribed by the Sales Tax Act, 1990 applicable for the purposes of assessment and recovery of the Sales Tax. This is a procedural provision and does not in any way militate against law.
In view of the above, these petitions have no force and are dismissed without any order as to costs.
M.B.A./N‑74/LPetitions dismissed.