The Lahore High Court directs FBR to submit reply to collection of advance tax from marriage halls and others and barred it from taking coercive action against the defaulters of advance tax.
Justice Shahid Jamil Khan passed the order on petition moved by number of marriage halls’ owners against recent amendment to Section 236 of the Income Tax Ordinance 2001 under Finance Act 2018.
Justice Khan surprised over collection of fixed amount of advanced tax on every single function either it is small or big.
The council of petitioner contended before the bench, saying that the Constitution has guaranteed right to do lawful business and no such law could be made that would infringe the this right of free trade and business in the country. The lawyer cited several judgments of the apex court wherein fundamental rights were protected, arguing that any law which infringed the fundamental right would be considered void.
The counsel also argued that under Section 236 D of the income tax ordinance, every citizen was required to pay advance tax at the rate of five per cent of the bill for running a business of marriage halls.
He further argued that the amendment in the law was made to introduce a proviso according to which advance tax shall be payable in urban areas at the rate of Rs 20,000 per function. However, according to newly amended law, the owner of a marriage hall was required to pay Rs 20,000 even if his bill was lower.
The counsel said that the advance tax could be payable legally on percentage basis and its amount could not be fixed.
He prayed to the court to declare the new amendment in Finance Act as illegal and unlawful and restrain the FBR authorities from harassing those running small and large scale businesses in the country.
After hearing initial arguments of the petitioners’ counsels, Justice Khan sought detailed reply from FBR and restrained it from taking action against the defaulters of the advance tax. The court adjourned further hearing until August 28.