ISLAMABAD: The Supreme Court has ruled against the promulgation of excessive ordinances to run the government, observing that an ordinance could only be issued in “emergent matters”.

The observations were made on Thursday by a Supreme Court bench comprising Justice Qazi Faez Isa and Justice Aminud Din Khan. The apex court also elaborated the course of action for promulgating ordinances.

The Islamabad High Court (IHC) was informed in July last year that the Pakistan Tehreek-i-Insaf (PTI) government had issued at least 54 presidential ordinances during the three years since it came to power in July 2018. Some ordinances were issued to run even the routine business of the federal government.

According to the National Assembly’s website, seven ordinances were promulgated in the government’s first parliamentary year and 30 in the second year. More than 16 ordinances have already been promulgated in the third parliamentary year, which is ongoing.

“The president and provincial governors may promulgate ordinances, but their power to promulgate ordinances is circumscribed by the Constitution,” observed the Supreme Court bench while deciding 581 petitions against the imposition of income support levy.

The president may only promulgate an ordinance in respect of “any matter in the federal legislative list, when neither the Senate nor the National Assembly is in session,” and “can only do so when circumstances exist which render it necessary to take immediate action”, the court ruled.

“In the absence of even one of the stated preconditions, neither the president nor the governors can promulgate ordinances. Ordinances may only be promulgated in respect of emergent matters because this alone is what the Constitution permits,” it said.

“Each and every word of the Constitution, and the methodologies and procedures prescribed therein, must be strictly adhered to. When this is done it dissipates misgivings and mistrust, and steers away from pitfalls. This also avoids wastage of time, money and effort, as witnessed in this case. History is testament to the fact that whenever the Constitution is violated it disrespects the people for whom it was made,” it observed.

The bench subsequently dismissed the petitions submitted by the Federal Board of Revenue (FBR).

Earlier, the Sindh High Court (SHC) ruled in favour of taxpayers having net moveable assets worth more than one million rupees, contending that the imposition of a 0.5 per cent income support levy on the net value through the Income Support Levy Act 2013 was unconstitutional, as it did not have the characteristic of a tax and was discriminatory because it created unreasonable classification within the same class.

A second category of the taxpayers had challenged the notices and assessment orders passed in terms of Section 5 of the Act despite its repeal by the government in 2014.

Dr Shah Nawaz, counsel for the commissioner of FBR’s Inland Revenue wing, argued that the income support levy had all the characteristics of taxation and the nomenclature used to describe it was immaterial.

He submitted that since the Act constituted a money bill, as described in Article 73 (2) of the Constitution, it became law when it was passed by the National Assembly and received the presidential assent.

And since the Act subsisted from July 1, 2013, to June 30, 2014, the income support levy for this period was required to be paid by all those who were liable to pay it under the Act, he said.

The FBR counsel told the Supreme Court bench that the SHC had noted that the act could not have been introduced as a money bill and incorrectly held that the income support levy was not a tax, and then based on this incorrect assumption held that the act was unconstitutional.

Mr Nawaz said there were two categories of cases before the high court: first, those in which proceedings for the recovery had not been initiated, and, second, where this had been done. The high court in respect of the latter category held that since there was no saving clause in the repealing law, the proceedings which had been initiated died a natural death with the repeal of the act.

The responding taxpayers submitted that the act was enacted through the Finance Act of 2013 even though it did not have the ingredients of a money bill as mentioned in Article 73(2) of the Constitution.

Therefore, if it was to be made law then, it had to comply with the ordinary legislative procedure prescribed in Article 70 of the Constitution. However, by tabling the act as a money bill, or as a purported component of a money bill, the Senate of Pakistan was bypassed.

Ordinary legislation (which is not a money bill), must be sent to the Senate for voting, but this was not done, they said. Therefore, the act did not constitute law, and because it was not law it need not be complied with, they added.

Another contention of the respondents’ counsel was that the stated purpose of the act was to “provide financial assistance and other social protection and safety net measures to economically distressed persons and families”.

The Supreme Court noted, “Act itself did not state that the income support levy was or constituted a tax or taxation. Leaving semantics aside, an examination of the act makes it abundantly clear that it neither came within the definition of tax nor taxation. The act was social legislation with the declared objective of poverty alleviation. Though a worthwhile objective, it did not bring the act within the definition of a money bill.

“Since the act was not a money bill, it had to be passed by both houses [the National Assembly and the Senate], as provided by Article 70 of the Constitution.”

The act also suffered from other insurmountable constitutional shortcomings, the court highlighted.

The court order stated, “In the absence of any legislative mechanism to secure the amounts collected as income support levy for the stated objective of poverty alleviation, such amounts would be deposited and become part of the federal consolidated fund becoming indistinguishable from other monies therein. Monies which are set aside for particular purposes are referred to as expenditure charged upon the fund and these are mentioned in Article 81.

“The expenditure charged upon the fund includes the remuneration of the president, judges, chief election commissioner, chairman and deputy chairman of the Senate, speaker and deputy speaker of the National Assembly and the auditor-general of Pakistan and the administrative expenses of their respective offices.

“Act did not declare that the amounts recovered pursuant to the act were to be charged in any specific manner on the fund. Resultantly, the amounts raised by the income support levy would go into the fund and would have to be distributed pursuant to the mechanism provided in the Constitution. Consequently, the stated objective of poverty alleviation, for which the Act was purportedly enacted, could not be achieved.”

Published in Dawn, March 11th, 2022

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