ISLAMABAD - The Supreme Court on Thursday ruled that the prime minister can’t take decisions regarding ordinances, bills and financial matters on his own.

The court struck down the fiscal notifications enhancing levies and taxes issued by the Revenue Division secretary or the minister, declaring them ultra vires.

The cellular phone companies and textile goods importers had filed appeals against an Islamabad High Court decision which had upheld finance ministry’s withdrawal of certain tax exemptions and modifications of tax rates.

A three-judge SC bench on May 24 after hearing the arguments on appeals against the IHC verdict had reserved its judgment.

The 80-page verdict, authored by bench-head Justice Saqib Nisar, said that the federal government is a collective entity described as the cabinet, comprising prime minister and the federal ministers.

It said that neither a secretary, nor a minister and nor the prime minister are the federal government (in themselves); and if any of them exercises a statutory power pertaining to fiscal matters, which is exercisable by the federal government, it will be constitutionally invalid in the eyes of law.

Similarly, the budgetary expenditure, or discretionary governmental expenditure can only be authorised by the federal government i.e. cabinet and not by the prime minister on his own.

“Any Act or statutory instrument purporting to describe any entity or organisation other than the cabinet as the federal government is ultra vires and nullity in the eyes of law.”

The judgment said that the ordinance making power (also) can only be exercised after prior consideration by the cabinet. “An ordinance issued without the prior approval of the cabinet is not valid.

Similarly, no bill can be moved in the Parliament on behalf of the federal government without having been approved in advance by the cabinet,” the court said.

It ruled that the cabinet has to be given reasonable opportunity to consider, deliberate on and take decisions in relation to all proposed legislation, including the Finance Bill or Ordinance or Act. In this regard, actions taken by the prime minister on his own are not valid.

The Rules f Business, 1973 are binding on the government and a failure to follow them would lead to an order lacking any legal validity. However, declared Rule 16(2) of it, which apparently enables the prime minister to bypass the cabinet, is ultra vires.

The prime minister, federal ministers or secretaries are part of the government but not the government themselves which comprises the federal cabinet and the prime minister.

The cellular phones and textile goods importers’ counsels had argued that the government earlier had granted them certain exemptions from sales tax, but subsequently these exemptions were either withdrawn or tax rates modified vide notifications No.280(1)/2013 and 460(1)/2013, which were issued under the provisions of Sales Tax Act, 1990.

The importers had challenged the notifications before the Islamabad High Court praying that those were not in accordance with the Section 3 of the Sales Act. The high court, however, dismissed their petitions. The importers then filed appeals against the IHC verdict in the apex court, which set aside it.

The apex court judgment said that the function of the chief executive (PM) is to execute and implement the policy decisions taken by the cabinet i.e. the federal government. He executes policy decision and does not take them by himself.

The prime minister cannot take decisions by himself, or by supplanting or ignoring the cabinet because the power to take decisions is vested with the federal government and unilateral decisions taken by him would be a usurpation of power.

Any decisions taken by the prime minister on his own initiative lack the authority of law or the constitution. Any discretionary spending at the initiative of the prime minister alone is manifestly unconstitutional and contrary to law.

The verdict added that changes in budgetary expenditures, the government’s discretionary powers and decisions on financials cannot be taken by the prime minister alone. Therefore the government’s levy tax notification is null and void since it was not passed by the federal cabinet.

If the prime minister approves any such law without the federal cabinet’s approval, it will be deemed null and void and will have no legal value, it said.