Law:

Section:

Pay-As-You-Earn Scheme Act (XXXI of 1973)-------S. 4---Pay-As-You-Earn Scheme, 1973, R.4---Constitution of Pakistan (1973), Art.199---Constitutional petition---Provision of R. 4, Pay-As-You ­Earn Scheme; 1973 was ultra vires of the Pay-As-You-Earn Scheme Act, 1973---Reasons. From a reading of section 4(2)(b) of the Pay-As-You-Earn Scheme Act, 1973 two things which significantly emerge are that in the event of default the State Bank of Pakistan shall levy a penalty not exceeding 27 percent. per annum and the other is that the words used in section 4(2)(b) are "shall be liable to pay" and not shall pay. The use of words "shall be liable to pay" calls for a determination by the. State Bank of Pakistan that the establishment has committed some violation of the Act for reasons in its control and then proceed to decide whether or not any penalty is liable to be paid, if so, at what rate. Rule 4 of the Pay-As-You-Earn Scheme, 1973 was ultra vires of the main Act and had, therefore, no legal effect. The amount imposed was ordered to be refunded to the establishment. Shamroz Khan and others v. Muhammad Amin and another PLD 1978 SC 89 ref. JUDGMENT This judgment shall dispose of W.Ps. Nos.285/98 and 21641/2000 in both of which common question of law is involved. 2. This petition under Article 199 of Constitution of Islamic Republic of Pakistan, 1973 calls in question a Notification No.IND/P-III/3(1)72, Vol.II issued by the Government of Pakistan, Ministry of Industries on 20-2-1973 whereby the Rules under the Pay-As-You-Earn Scheme Act, 1973 have been framed. 3. The dispute only relates to Rule 4 thereof which reads as under:-- "If in any financial year, any industrial unit or enterprise is not in a position to meet any of its liabilities specified in clause 7 of the Scheme from within fifty percent. of the earnings specified in that clause, or from within such higher percentage of the said earnings as may have been allowed under the said clause, the. Federal Government may allow payment, at the official rate of exchange, of the amount of foreign exchange required to meet the liabilities,…

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