Law: Income Tax Ordinance, 1979

Section: 2(c)(i),16,16(2)(a)(iii)

Law: Constitution of Pakistan, 1973

Section: 189,201

(a) Interpretation of statues---.--- ---.----Hardship or inconvenience caused to a citizen by a provision of law was not a ground to be considered by the Courts in interpreting and determining the legality of a provision of a statute; and if a subject fell within the ambit of statute, then irrespective of hardships which such subject/person may face, the provision of the statute was to be given effect and a citizen could not be absolved from his liability on sympathetic or humanitarian grounds. (b) Income Tax Ordinance (XXXI of 1979)---.--- ---.----Ss. 16 & 2 (c)(i)---.---FBR Circular No. 15 of 1997 dated 06.11.1997---.---"Salary" liable to be taxed under the Income Tax Ordinance, 1979---.---Amounts received by retiring employees under a voluntary separation scheme/golden handshake, as "salary" under the Income Tax Ordinance, 1979---.---Petitioners, inter alia, sought reimbursement of the income tax deductions made on amounts derived from their availing of golden handshake schemes from the State Bank of Pakistan---.---Validity---.---By virtue of golden handshake / voluntary separation scheme, the terms and conditions of retiring employees were modified which resulted in termination of their employment, and once it was decided that such payments made to retiring employees were "salaries" as defined in S.16 of the Income Tax Ordinance, 1979, the natural consequence of the same was that such payments would be liable to be taxed---.---Language used in Ss.16(2)(a)(iii) & 2(c)(i) of the Income Tax Ordinance, 1979, even in absence of words "payments" or "profits received on retirement or termination on account of voluntary separation", without any doubt brought such payments within ambit of definition of salary in the Income Tax Ordinance, 1979 , chargeable to tax. (c) Constitution of Pakistan---.--- ---.----Art.189---.---Decision of Supreme Court binding on other courts---.---High Court could not revisit, explicate or expound the law on an issue decided by the Supreme Court, which had a binding effect on the High Court. Malik Muhammad Inam and others v. Federation of Pakistan 2006 SCMR 1670 foll. Hussain Badshah and another v. Akhtar Zaman and others 2006…