Law: Income Tax Ordinance, 1979

Section: 25,25(c),62

Law: Companies Profits (Workers Participation) Act, 1968

Section: 2(c)

Law: Income Tax Ordinance, 2001

Section: 23,133(1)

COMPANIES PROFITS (WORKERS PARTICIPATION) ACT, 1968-----Section 2(c)---Section 25 of the Income Tax Ordinance, 1979. Section 25(c) of Income Tax Ordinance, 1979 was not attracted as the transferred amount to WPPF was not a trading liability but a statutory liability and was granted an exemption by Companies Profits (Workers Participation) Act, 1968 which is a special law takes precedence over the Income Tax Ordinance, 1979 which is a general law.- The term trading liability has been used exactly four times in the entirety of the Ordinance and that too only in s. 25. The word trade quite literally means buying and selling of goods and services. The legal definition is more or less the same. When confronted with the question whether the transferred amount to the WPPF by the Respondent taxpayer fell within the definition of trading liability or was a statutory, learned counsel for the Petitioner could not controvert that the transferred amount could not be termed as arising out of a trade/trading rather the same is a statutory liability. To elaborate, the transferred amount to the WPPF was granted an exemption because a statute, in the present case, Companies Profits (Workers' Participation) Act, 1968, allowed for it. Hence, the amount in question was nothing but a statutory liability. Moreover, it is pertinent to state, with regards to the statute, which is a special law, this Court has opined in Gulistan Textile Mills Ltd. v. Soneri Bank (2018 CLD 203). that “...according to the principle of harmonious interpretation the special law would take precedence over the general law (generalia specialibus non derogant).” Even if for the sake of an argument, we were to give the Ordinance more weight over the special law, it would not help the Petitioner’s case because the transferred amount to the WPPF was not a trading liability and thus did not attract the provisions of s. 25(c) of the Ordinance. JUDGMENT: MR. JUSTICE IRFAN SAADAT KHAN:---.--- Brief facts of the lis before us are that M/s Riaz Bottlers, (now Lotte Akhtar Beverages), (“Respondent”) happens to be a private limited company, which derives its income from bottling carbonated soft drinks and non-carbonated…

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