The SHC had granted a stay order against the imposition of the 0.5 percent Income Support Levy. It has also been learnt that the petitions are fixed for hearing on December 16 and SHC would hear the matter on day-to-day basis for deciding the case.
According to the SC order, a constitution petition filed before the High Court of Sindh had challenged the provisions of Income Support Levy Act, 2013 as being illegal and unlawful on a number of grounds and the SHC had allowed the interim relief that would allow the petitioner to file the returns of income manually without filing the Income Support Levy pro forma. It has been argued that through an interim order the provisions of law (statute) to which presumption of constitutionality is attached cannot be rendered ineffective and nugatory, directly or indirectly. Leave is granted, inter alia, to consider the above. In the meantime, operation of the impugned orders is suspended, the SC order added.
In the SHC, it was argued that the federal government does not have the authority to pass any legislation on the social welfare of the public at large. It was further argued that after the 18th Amendment the right to legislate about the social welfare issues has been devolved to provinces. If any such legislation is to be passed, it is within the domain of the provincial legislature.
The levy was challenged on grounds that it is discriminative in nature; as it is applicable and collectable from a taxpayer and ''''no'''' other person. Secondly, the levy is a fee and cannot be passed as a Money Bill through an Act of the Parliament. Thirdly, the levy tends to take away the already taxed property of the person, which can only be taken away by the state in case of emergency. The levy is a sort of double taxation as the accumulated wealth represents income already taxed or exempted. Furthermore, it was challenged in the SHC that the constitutional guarantees given to the persons to hold property have been taken away through the passage of Income Support Levy Act, 2013, which being a fundamental right cannot be taken away, but only in a state of emergency.
It was also argued that the levy is to be recovered from persons who are paying income tax and filing their tax returns. There is no way the FBR can recover levy from persons who are out of the tax net. This alone creates a discrimination and amounts to taxing further the persons who are already being taxed.