ISLAMABAD: As the new government too had a taste of judicial activism, its first budget was stalled at least for a day in the National Assembly on Friday after the Supreme Court struck down application of a British-era law to charge an increased rate of the general sales tax (GST) before the finance bill was passed.

While Finance Minister Ishaq Dar and a couple of other ministers of Prime Minister Nawaz Sharif’s 15-day-old government assured both houses of parliament that a three-judge bench’s ruling earlier in the day would be honoured, Mr Dar said the higher GST rate could still be charged if the National Assembly passed a resolution to that effect along with the budget for fiscal 2013-14.

With government weighing the implications of the ruling, the finance minister, with opposition’s agreement, put off until Saturday morning his speech to wind up a general debate in the National Assembly, where suggestions came from both sides of aisle to assert parliament’s supremacy by finding a way out by mutual agreement rather than solutions coming from elsewhere.

The ruling by the court on an issue it took up on its own initiative came as the first judicial embarrassment to the new government of Pakistan Muslim League-N (PML-N), which had been welcoming similar so-called suo motu hearings in recent years while functionaries of the previous coalition government led by the Pakistan People’s Party (PPP) were at the receiving end.

While the PPP-led opposition reacted to the government’s budget woes with some restraint, despite the first token walkout by the combined opposition in the present National Assembly to protest at what opposition leader Khursheed Ahmed Shah called wrong done by an unconstitutional tax collection, former speaker Fehmida Mirza of PPP called for making it a “national budget” that could be passed unanimously by incorporating opposition proposals.

Besides the budget controversy during two sittings of the house, the day was also marked by the opposition Muttahida Qaumi Movement (MQM) announcing a complete boycott of the remainder of the National Assembly session after a sentimental speech by one of its 23 lawmakers, Abdul Rashid Godil, to protest against the shooting to death of an MQM member of the Sindh provincial assembly, Sajid Qureshi, and the provincial lawmaker’s son in Karachi earlier in the day.

The house waited in vain during its first sitting for the finance minister to deliver its winding up speech or brief it about government plans to readjust revenue and deficit targets as a result of the court ruling despite repeated urgings by Speaker Sardar Ayaz Sadiq to call him.

And while Mr Dar seemed to be busy in a simultaneous sitting of the opposition-dominated Senate, which finalised its non-binding recommendations for the budget, Defence Production Minister Rana Tanveer Hussain and Law and Justice Minister Zahid Hamid assured the lower house that the court verdict would be honoured and responded to repeated opposition queries mainly coming from Pakistan Tehreek-i-Insaf (PTI) vice-chairman Shah Mahmood Qureshi, PPP’s former water and power minister Naveed Qamar and Awami Muslim League leader Sheikh Rashid Ahmed.

On coming to the house in the second sitting, an apparently restive finance minister repeated the assurances given earlier by his two cabinet colleagues to implement the Supreme Court ruling but said the collections earlier made before the passage of the budget on the force of Provisional Collection of Taxes Act of 1931 and held illegal by the court, could be regularised by a house resolution as he said was the practice in the United States and Britain.

He said while his winding up speech on Saturday could indicate any Senate recommendations the government could incorporate in the budget, it would be for the house to decide the fate of those recommendations, one of which demands withdrawal of the GST rate increase to 17 per cent from 16 per cent.

It was during the wait for the finance minister that Ms Fehmida Mirza came with an impressive critique of the budget as possibly the last major opposition speech on the budget, which was received with cheers from both the opposition and treasury benches.

She acknowledged the finance minister’s problem in giving a budget on June 12 — only a week after Prime Minister Nawaz Sharif took office on June 5 — and called for adopting a realistic approach, making it not only the government’s budget but a “national budget” deserving to be passed unanimously.

She assured the government of the PPP’s cooperation in what it would consider right steps even at the risk of being taunted as a “friendly opposition” and said she had no objection to taking loans from the IMF though she disliked their conditions.

Ms Mirza avoided making any political attack on the new government but objected to what she called some “dangerous” and “sinister administrative measures” proposed in the budget, like giving judicial powers to grade 17 officials.

She came up with a substantial list of suggestions including forming a parliamentary oversight body for the Federal Bureau of Revenue, restoring subsidies on gas, fertilisers as well as other agricultural incentives, reviving industrial production, raising grants to each of the poor beneficiaries of the Benazir Income Support to Rs2,000 per month from the proposed Rs1,200, continuing the 75 per cent tax rebate for teachers and researchers and strengthening disaster management in her home district of Badin in Sindh province. While condemning acts of terror, as happened earlier in the day in Karachi and Peshawar, Ms Mirza proposed that “we move forward” in line with a resolution passed by the previous house providing for what was called a “three-D” policy — dialogue, development and deterrence.

The speaker assured lawmakers that copies of Senate recommendations on the budget would be delivered to them later on Friday night before adjourning the house until 10.30am on Saturday.