Law:

Section:

(a) Income Tax Ordinance (XXXI of 1979)--S. 50 (5) (1) (b) [as amended by Finance Ordinance (I of 1995)]----Customs Act (IV of 1969), S. 3----Constitution of Pakistan (1973), Art. 185 (3)---­Deduction of income-tax at source---- Leave to appeal was granted by Supreme Court to consider the contention of the importer that the rate of 4 % as advance income-tax was applicable from 1-7-1995 while the Bill of Entry on the basis of which the tax was payable was filed before 30-6-1995 and, thus, the new rate of 4 % could not be applied; that a vested right had accrued to the importer and that the full amount of 2% which was payable prior to 1-7-1995, when the Finance Ordinance, 1995 came into force had been paid in full in advance and that the entire liability of the importer for the income year ending 30-6-1995 had already been crystallized prior to the promulgation of Finance Ordinance, 1995 and accordingly no additional liability could be imposed thereon----Contention of the Authorities was that as the importer had not completed the documents required for assessment of duty and had not even paid the instalments as required by the rules, there could not be final determination of the customs duty, which was the basis for requiring advance income tax. (b) Income Tax Ordinance (XXXI of 1979)--- ----S. 50 (5) (a) (b) [as amended by Finance Ordinance (I of 1995)]---Customs Act (IV of 1969), S. 3----Deduction of income-tax at source----Procedure----If the importers had deposited before 1-7-1995 advance tax Q 2% as calculated in terms of S. 59 (5) (a) of the Income Tax Ordinance, 1979 which was the prevailing rate on the date of such deposit, then liability for the advance income-tax stood discharged completely and the subsequent amendment in the rate which was effective from 1-7-1995 did not apply to them----Mere fact that whole of the customs duty was not paid by the importer before 30-6-1995 because they had availed of the benefit of payment of customs duty in instalments under the rules could not change their liability in respect of advance income-tax under the Income Tax Ordinance, 1979 which they paid in full before 30-6-1995. The liability for payment of advance…

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