Authorities cannot impose a tax on petroleum products without parliament’s approval, Chief Justice Iftikhar Muhammad Chaudhry said on Friday.
A three-member SC bench, headed by Chief Justice Iftikhar Muhammad Chaudhry and comprising Justice Ejaz Ahmed Chaudhry and Justice Gulzar Ahmed, was hearing a suo moto case into to the recent hike in prices of petroleum products.
The federal budget has proposed a one percent increase in the general sales tax.
During the course of the hearing, the chief justice said a tax could not be imposed on petroleum products without parliament’s approval of the finance bill. He said the finance minister had presented the budget before the National Assembly and had just given a proposal for an increase in the sales tax.
Appearing on notice, Attorney General Munir A Malik submitted that nothing could be done without the approval of parliament.
He also read out the Provisional Collection Taxes Act 1931 and contended that the recent increase in the sales tax was made under the act, adding that it was meant for controlling hoarding.
The chief justice, however, said hoarding itself was a crime, adding that both the federal and provincial governments had failed to control it.
Salman Akram Raja, counsel for the Oil and Gas Regulatory Authority (OGRA), produced before the court the declaration and notification pertaining to the recent hike in petroleum prices.
The Federal Board of Revenue also presented a copy of the finance bill to the court.
“Prima facie, whatever was done was totally illegal and nothing could be done without proper legislation,” the chief justice said, adding that this had put an extra burden on the masses.
Later, the court directed the attorney general to seek instructions from the authorities concerned on the issue and assist the court on the next date of hearing.
Further proceedings were adjourned until June 18.