Law:

Section:

Zakat and Ushr Ordinance (XVIII of 1980)--- ----Ss. 1(2), 2(xxiii) & 3(1)---Pakistan Insurance Corporation ("Corporation")---Exempt from charge and collection of Zakat---Joint reading of S.1(2) with exemption of the Federal Government under S.2(xxiii)(a) of the Zakat and Ushr Ordinance, 1980 provided that the Corporation stood exempted from the charge and collection of Zakat. Section 1(2) of the Zakat and Ushr Ordinance, 1980 ("the Ordinance") stated that a company or other association of persons or body of individuals that had the majority of its shares owned by or its beneficial ownership held by Muslim citizens of Pakistan, was liable to the charge and collection of Zakat under the provisions of the Ordinance. Section 3(1) of the Ordinance made Zakat chargeable upon a 'Sahib-e-Nisab' who was a person owning or possessing assets not less than value equaling nisab. Under section 2(xxiii)(a) of the Ordinance, the Federal Government was excluded from the status of 'Sahib-e-Nisab'. Definition of 'Sahib-e-Nisab' under section 3(1) of the Ordinance specified only one qualification of a 'Sahib-e-Nisab' whereas section 1(2) of the Ordinance enumerated certain other attributes of a person that completed the definition of 'Sahib-e-Nisab': which were that the person must be a Muslim citizen of Pakistan or in the case of an artificial juristic person when it had its majority equity owned by Muslim citizens of Pakistan. Majority equity ownership of the Pakistan Insurance Corporation ("Corporation") laid with the Federal Government and not with Muslim citizen of Pakistan. Federal Government was excluded from the status of 'Sahib-e-Nisab' under section 2(xxiii)(a) of the Ordinance. Majority ownership of the Corporation neither rested with Muslim citizens of Pakistan nor with a person qualifying as 'Sahib-e-Nisab'. Corporation, therefore, failed the test laid down in section 1(2) of the Ordinance. Hence Corporation stood exempted from the charge and collection of Zakat. Bank of Punjab v. Administrator General, Central Zakat PLD 1994 Lah. 207 ref. JUDGMENT UMAR ATA BANDIAL, J.- The judgment under appeal dated 28.05.2004 passed by a learned Division Bench of the High Court…

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