Law: Sindh Sales Tax on Services Act, 2011

Section: 2(5),2(6),2(7),2(79),3

Law: Customs Act, 1969

Section: 9

Law: Income Tax Ordinance, 2001

Section: 49(1),49(2)

Law: Constitution of Pakistan, 1973

Section: 49(4),199,165(1),165A,165A(1),142(a),143 ,151(1),151(2),97and98anditem22ofPartI

THIS JUDGMENT DELIVERED BY: QAZI FAEZ ISA, JUSTICE:---.--- The High Court of Sindh at Karachi allowed a petition filed by the Civil Aviation Authority ("CAA") under Article 199 of the Constitution of the Islamic Republic of Pakistan ("the Constitution"). The CAA, which was established under the Pakistan Civil Aviation Authority Ordinance, 1982 ("the CAA Ordinance"), had filed the said petition challenging the imposition of sales tax on services levied upon it under the Sindh Sales Tax on Services Act, 2011 (hereinafter "the Act") and the Sindh Sales Tax on Services Rules, 2011 (hereinafter "the Rules"). 2. The learned Division Bench of the High Court allowed the petition filed by CAA and declared that CAA was, "not liable to pay the tax under the Sindh Sales Tax on Services Act, 2011", consequently, all demands made, proceedings initiated, orders passed or notices issued to CAA under the Act and the Rules were quashed and set aside. Since this case required the interpretation of the Constitution notices under Order XXVII-A of the Code of Civil Procedure were issued to the Attorney General for Pakistan and the Advocate General of Sindh. 3. The learned senior counsel Mr. Farooq H. Naek represents Sindh Revenue Board ("the Board") constituted under section 3 of the Sindh Revenue Board Act, 2011. The learned Mr. Khalid Javed Khan represents the Government of Sindh, and the learned Additional Advocate General, Sindh Mr. Sabtain Mehmood, represents the Advocate General of his province. We were informed that the learned counsel were granted requisite permission to represent the Government of Sindh; the complicated and technical nature of the dispute involving the interpretation of the Constitution would justify such engagement. 4. The learned Mr. Farooq Naek took us through the various provisions of the Act, the Rules, the CAA Ordinance and the Constitution. He stated that only the Federal Government is exempt from taxation under Article 165(1) of the Constitution and this exemption would not extend to CAA as it is a statutory body set up under the CAA Ordinance. By referring to item 49 of Part I of the Federal Legislative List (the Fourth Schedule to the…