It is learnt that the Rules issued by the Punjab Revenue Authority have been challenged before the Lahore High Court in a Constitutional petition on the ground that the Punjab Revenue Authority has not been lawfully constituted for the reason that as per Section 3 of the Punjab Revenue Authority Act, 2012 (Act) the Authority shall consist of Chairman and not less than four members. This basic fact of non-constitution has been challenged on the ground that Section 76 of the Punjab Sales Tax on Services Act, 2012 (PSTS Act) clearly states that the Punjab Revenue Authority created under Section 3 of the Act shall frame the Rules; whereas in the absence of the Authority all the rules have been issued by the Chairman in his personal capacity as the Chairman as the other four members have not been appointed.
The petitioners have challenged the Punjab Sales Tax on Services Rules, 2012 in general and specifically the Rules on Withholding and Franchise Fee. The Lahore High Court has in the petitions issued Notices to the Punjab Revenue Authority to explain the issues raised including establishment of Authority and in the meantime allowed the petitioners interim relief against the issuance of notices for recovery of sales tax on services on franchise fee and sales tax on advertisement, sources added.