Law: Punjab Finance Act, 1977

Section: 3&SecondSched

Law: Constitution of Pakistan, 1973

Section: 163,FourthSched

(a) Punjab Finance Act (XV of 1977)---S.3---Constitution of Pakistan (1973), Art. 163 & Fourth Sched.---Federal Legislative List, Part I, Item 47---Provincial taxes in respect of professions etc. ---Provinces are granted limited power of taxation subject to the condition that tax imposed should not exceed the limit fixed by the Federation---Tax on professions, trades, callings and employments cannot legally be said to be an income-tax, although in reality it may be. As is evident from the perusal of Article 163, Constitution of Pakistan (1973), the tax by which Provincial Assembly is permitted by said Article is, in fact, an income-tax within the meaning of Item 47 of the Federal Legislative List, Part I of the Fourth Schedule to the Constitution but by Article 163, the Parliament would have exclusive powers to make laws with respect to it. The Constitution-makers thought it fit to grant limited power of taxation in this respect to the Provinces but subject to the condition that the tax imposed should not exceed the limit fixed by the Federation. It is to be seen that the provincial tax virtually amounts to double taxation as the assessee is also paying the general tax imposed by the Federation. Although it is true that tax on professions, trades, callings or employments virtually amounts to tax on income but such a tax could be levied as the tax on income falls within the domain of the Federal Legislative List. As already pointed out, Article 163 of the Constitution itself raises a presumption that tax on professions, trades, callings and employments shall not be considered to be a tax on income in view of this deeming fiction. It cannot legally be said that the tax on professions, trades, callings and employments is an income-tax, although in reality it may be. B.K. Bhander v. Dhaman Gaon Municipality AIR 1966 SC 249 ref. Tribal Textile Mills Ltd, Lahore v. Province of Punjab through Chief Secretary to Government of Punjab, Lahore and another PLD 1979 Lah. 206 distinguished. (b) Punjab Finance Act (XV of 1977)----S.3 & Second Sched., Entry 1---Professions Tax Limitation Act (XX of 1941), S.2---Constitution of Pakistan (1973); Arts. 163 &…

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