LAHORE, March 12: PML-N President Shahbaz Sharif and Kulsoom Nawaz, wife of Nawaz Sharif, denied in the Lahore High Court having liability for the payment of additional wealth tax imposed by the authorities concerned.

While filing a reply to a petition of tax authorities on Wednesday, both the respondents, through their counsel Tariq Aziz, submitted that the petitioner’s order for the payment of additional wealth tax was unlawful and violative of section 31(3) of the Wealth Tax Act, 1963.

The tax authorities had alleged that Shahbaz and Begum Kulsoom had failed to pay their respective wealth tax demands on time, and were rightly penalized through additional tax demand. He also alleged that both the respondents did not make payment of their respective income tax demands for the assessment years 1994-95, 1995-96, 1996-97 and 1997-98 within the stipulated period. The tax was paid on August 30, 2002, when both the petitioners had become liable for the payment of additional tax, the officials claimed.

According to the petitioner, both the respondents had been issued show-cause notices for the payment of their respective wealth tax liabilities, but they did not respond. Subsequently, penalty for the payment of additional tax was imposed under the law, they added.

Denying the claim for additional wealth tax payment, Mr Sharif said he had paid the entire tax demand on August 30, 2002, for the assessment years 1997-98 and 1999-2000. He pointed out that the order, claiming payment of Rs3.2 million as additional tax for the four respective assessment years, was passed on September 30, 2002, when no tax was due from him.

Begum Kulsoom Nawaz took the similar plea in her reply, saying she had paid the tax demand prior to the service of additional tax notice. “The whole tax demand had been paid off prior to the issuance of the order for additional tax demand, therefore, the impugned order is not maintainable,” she claimed.

The respondents claimed that payment of entire tax demand on August 30, 2002, stood admitted by the petitioner and the additional wealth tax penalty was unlawful. “The impugned order is repugnant to Article 18 of the Constitution, and is confiscatory on its face since no demand of wealth tax stood outstanding on September 30, 2002” alleged the two Sharif family members.

They also claimed that the tax authorities had yet to decide their appeals against the orders for the payment of wealth tax for the last five years despite the fact that payment was made on August 30, 2002.

The respondents also argued that under section 31(3) of the Wealth Tax Act, 1963, the wealth tax officer, exercising his discretion, could treat an assesse as not being in default as long as his appeal against the tax demand was pending.

The court was requested to set aside the order for payment of additional wealth passed under section 31(B)(2) of the Wealth Tax Act, 1963. The proceedings will resume on the next hearing.