ISLAMABAD: Chairman FBR Ansar Javed on Friday told the Supreme Court that no notification to implement new taxes or sanctioning price increases had been issued by the board. He further explained that price increase had been implemented following a declaration issued by the finance ministry. Javed had appeared before a bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry.
The bench was hearing a suo motu notice of the increase in prices of petroleum products ordered on the basis of announcements made by Finance Minister Ishaq Dar in his budget speech.
Expressing its reservations on the increase ordered in the general sales tax which has resulted in a price-hike of consumer goods and petroleum products without the approval of the finance bill by Parliament, the Supreme Court had summoned officials in the Federal Board of Revenue.
During the hearing, the chief justice questioned as to how the increase in GST proposed in the finance bill could be implemented without its adoption by Parliament.
Chief Justice Iftikhar added that the court had reservations on the collection of the increased GST and that the additional tax collected in this respect should be returned to the public.
The court moreover directed the authorities to produce the notification for implementing the increased GST.
Responding to which, the government’s top law officer and Attorney General Munir A. Malik said he did not have a copy of the document.
Following which, the bench issued summons for FBR officials along with the notification authorising the implementation of the proposed increase in GST.
Soon after the summons, Javed appeared before the bench and said no notification had been issued by the board and that the price increase had been implemented following a declaration issued by the finance ministry.
Moreover, Attorney General Malik said the tax act of 1931 allowed the government to collect taxes prior to the budget’s formal approval.
Responding to which, the chief justice said that 1931 act was a violation of Article 77 of the Constitution which says that “no tax shall be levied for the purposes of the Federation except by or under the authority of Act of Parliament”.
He further asked that even if the government withdrew the tax, who would return the money to the people who had already paid additionally.
Subsequently, the hearing was adjourned to Tuesday.