Law: Income Tax Ordinance, 2001

Section: 2(63),4B,63(2)

Law: Constitution of Pakistan, 1973

Section: 199

THIS JUDGMENT DELIVERED BY: ATHAR MINALLAH, JUSTICE:---.--- (1). Through this judgment I intend to decide the instant petition and the petitions listed in Annexure-A attached hereto. 2. The facts, in brief, are that all these petitions have been filed by juridical persons, inter alia, engaged in the business of exploration and production of petroleum products. The petitioners have executed their respective agreements/contracts with the Federal Government. The petitioner Companies have challenged the vires of section 4B of the Income Tax Ordinance, 2001 (hereinafter referred to as the "Ordinance of 2001"). Section 4B of the Ordinance of 2001 was inserted through Finance Act of 2015 and it was later amended vide Finance Act, 2016. 3. The learned Counsels for the petitioner Companies have argued that; Section 4B is not a levy of tax rather it is in the nature of levy of fee and therefore, its insertion through a Money Bill was without lawful authority and jurisdiction; Reliance has been placed on the case titled: "Worker's Welfare Funds Vs. East Pakistan Chrome Tannery (Pvt.) Ltd" [PLD 2017 SC 28]; since levy of super tax through insertion of section 4B of the Ordinance of 2001 is in the nature of fee, therefore, it could not have been levied through a Money Bill; the judgment rendered and the law expounded by the apex Court is binding; the tax envisaged under section 4B is exclusively for the purposes of "rehabilitation of temporarily displaced persons" and therefore, it is to be classified as fee and not tax; it is obvious from the title of section 4B that even the legislature while inserting the said provision did not treat it as a tax; the department also does not treat it as a tax; reliance has been placed on an unreported judgment of the Appellate Tribunal Inland Revenue, dated 08.01.2018; section 100 of the Ordinance of 2001 is confined to production of oil and natural gas, and exploration and extraction of other mineral deposits; special provisions have been specifically inserted in the Ordinance of 2001; the mechanism for computing the tax payable by the companies engaged in the business of production of oil and natural gas, and exploration and extraction…

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