LAHORE - Lahore High Court yesterday declared Punjab Revenue Authority as illegal setting aside the government ordinance giving legal cover to this body.  In its judgment, the court has also pronounced the appointments of its chairman, members and administrative orders since its inception as void and unlawful. The judge observed that the authority was established in 2012 under an ordinance but it was not enacted by the Punjab Assembly.
The authority was collecting millions of rupees from the citizens by imposing tax even on services. However, the ordinance under which the authority was functioning lapsed after three months on January 22 and had no legal value.

Talking to The Nation, authority’s Additional Commissioner Salman Ali said that they would challenge the decision but still they have to decide about the forum. “Our legal team lost the case only on one point that the appointments of the members were not made properly in accordance with law”, he said.  The court passed the order on 225 petitions challenging the mandate of the authority, appointments of its chairman and members and the law under which it was working since 2012. The petitioners’ counsels Advocate Imtiaz Rasheed Siddique, Shehryar Safdar, Salman Mansoor Awan, Advocate Salman Zaheer Khan and many other lawyers appeared in the court.

The counsels argued that they were shocked to receive a notice from Punjab Revenue Authority stating that the Punjab government has levied sales tax on your services and you are directed to get registered with the PRA, failing which fine of Rs 50000 shall be imposed on them. The petitioners’ counsels pleaded that section- 3 of Punjab Sales Tax on Services Act 2012 was illegal and invalid and contrary to Articles 2A, 8, 9, 17, 18 and 25 of the constitution 1973. They said notices issued to them for compulsory registration with the PRA were also unlawful.

They further said the Punjab Sales Tax on Services Act, 2012 has been promulgated in the Province of Punjab with effect from July 1, 2012. The counsels also argued that in the Second Schedule of the PST Act, services provided by the travels agents and tour Operators were made subject to tax at the rate of 16%, whereas neither the airline nor the Hajj and Umrah services had been made subject to the said tax. The petitioners’ counsels stated the First and Second Schedule of PST Act as far as it related to the imposition of service tax on travel agents and tour operators and any subsequent action taken by the PRA are unconstitutional, illegal, coercive, discriminatory and without lawful authority, based on policy that is malafide in its spirit and was of no legal effect.

They maintained that imposition of tax shall dramatically deplete the travel agency business in the Province of Punjab as the said Tax was not levied elsewhere and the travelers could approach any other travel agent outside the province to purchase a travel ticket. They submitted that without ignoring the fact that the travel agents were already registered with the FBR and were paying 20 percent as Federal Excise Duty therefore, the need to register with the PRA shall elevate the administrative burden on the travel agents to file monthly return with the FBR and with the PRA at the same time.

They pointed out that  PST Act its first and second schedule as much as it related to the travel agents or tour operators might very kindly be declared as illegal, incompetent and without lawful authority and also being discriminatory and against the fundamental rights of the petitioners. They had also prayed to the court to declare the notices of PRA as well as its formation as illegal and against the law.