ISLAMABAD, Jan 8: The Supreme Court on Wednesday issued notice to the attorney-general to explain if the legislature had the powers to make enactments for nullifying its judgment.

A three-member bench, led by Chief Justice Shaikh Riaz Ahmad, after hearing Khalid Anwar, counsel for Fecto Belarus, and Abdul Hafeez Pirzada, counsel for the Central Board of Revenue, issued notice to the attorney-general. The petitioner had challenged the vires of two ordinances which were issued to nullify the Supreme Court’s judgment.

The case relates to the refund of Rs480 million sales tax to the company by the CBR, which was collected after withdrawing the exemption on the import of tractors under the Awami Tractor Scheme.

A Supreme Court bench, led by former chief justice Saiduzzaman Siddiqui, had rejected the company’s appeal. Another bench of the court, presided over by the Chief Justice Riaz Ahmad had reversed the judgment by accepting the review petition.

The court had directed the CBR to refund the tax. After calculating the impact of the judgment, the CBR concluded that it would have to pay Rs480 million to the company.

When the department did not comply with the judgment, a contempt of court petition was filed.

While the petition was pending, the government issued two ordinances to nullify the impact of the judgment.

The CBR contends that if the incidence of the sales tax is passed on to the consumer, its refund could not be claimed. The department, however, has deposited Rs480 million in the Supreme Court.

The bench comprised Justice Riaz Ahmad, Justice Iftikhar Mohammad Chaudhry and Justice Qazi Mohammad Farooq.

Khalid Anwar argued that the legislature had no power to make an enactment to reverse the Supreme Court judgment.

Justice Chaudhry observed that the Supreme Court only had the power to send somebody to jail for not complying with its judgment but it had no power to direct that a payment be made.

The court adjourned the hearing till Jan 22.