The Supreme Court (Practice and Procedure) Act, 2023, officially known as Act No. XVII of 2023, was enacted on April 21, 2023. This landmark legislation addresses various practices and procedures concerning the Supreme Court of Pakistan. Let’s break down the key aspects of this act in clear and concise terms.

1. Title and Commencement:

• The act is titled the “Supreme Court (Practice and Procedure) Act, 2023.”
• It came into force immediately upon enactment.

2. Constitution of Benches:

• The act establishes a Committee to constitute Benches for the Supreme Court.
• The Committee consists of the Chief Justice of Pakistan and the two most senior Judges.
• Decisions within the Committee are reached by a majority vote.
• The Committee’s first meeting aims to determine its procedure and rules.

3. Exercise of Original Jurisdiction:

• Matters invoking the original jurisdiction of the Supreme Court under clause (3) of Article 184 of the Constitution are initially placed before the Committee.
• If the Committee deems that a matter involves a question of public importance related to enforcing Fundamental Rights, it constitutes a Bench of at least three Judges for adjudication.

4. Interpretation of the Constitution:

• When interpreting constitutional provisions, a Bench comprising no less than five Judges of the Supreme Court is constituted by the Committee.

5. Appeal:

• An appeal may be filed within thirty days from an order issued by a Bench exercising jurisdiction under clause (3) of Article 184 of the Constitution.
• Appeals are directed to a larger Bench of the Supreme Court, and they must be scheduled for hearing within fourteen days.
• The right to appeal also applies to orders made under clause (3) of Article 184 before the commencement of this Act, provided they are filed within thirty days of the Act’s commencement.

6. Right to Appoint Counsel of Choice:

• For filing a review application under Article 188 of the Constitution, a party has the right to select its counsel. In this context, ‘counsel’ refers to an Advocate of the Supreme Court.

7. Application for Urgent Matters:

• Applications that assert urgency or request interim relief in a cause, appeal, or matter must be scheduled for a hearing within fourteen days from the date of filing.

8. Act’s Precedence:

• The provisions of this Act take precedence over any other existing laws, rules, regulations, or court judgments, including those of the Supreme Court and High Courts.

In summary, the Supreme Court (Practice and Procedure) Act, 2023, is a significant legal development in Pakistan, streamlining the procedures and practices of the Supreme Court and reinforcing the right to appeal and the appointment of counsel of choice. It empowers the Committee to effectively manage the Court’s operations and interpretations of the Constitution. Additionally, the Act emphasizes the prompt handling of urgent matters.

Key Amendments and Their Impact (Section 4B and Section 4C):

Super Tax for Rehabilitation of Temporarily Displaced Persons (Section 4B)

In an effort to support the rehabilitation of temporarily displaced persons, Pakistan has introduced a super tax. This tax, applicable from the year 2015 onwards, is levied at rates specified in Division IIA of Part I of the First Schedule. The affected income includes profits on debt, dividends, capital gains, brokerage, and commission, among others. For a detailed understanding, refer to Section 4B of the Income Tax Ordinance 2001.

Super Tax on High Earning Persons (Section 4C)

Another notable amendment is the introduction of a super tax targeting high-earning individuals. This tax, applicable from the tax year 2022 onwards, is imposed at rates specified in Division IIB of Part I of the First Schedule. The types of income subjected to this tax are similar to those in Section 4B, and it follows the payment and collection procedures detailed in Chapter X of the Ordinance. Please note that this section excludes banking companies for the tax year 2022. For further details, consult Section 4C of the Income Tax Ordinance 2001.

Understanding the Tax Credits (Section 4 – Subsection 3):

To provide relief and incentives to taxpayers, the Ordinance allows for various tax credits. These credits are applied in a specific order, starting with foreign tax credits, followed by tax credits under Part X of Chapter III, and finally, tax credits under sections 147 and 168. This systematic approach ensures that taxpayers receive the maximum benefit while complying with tax laws. Refer to Section 4, Subsection 3 for comprehensive details.

Conclusion:

As the income tax landscape in Pakistan evolves, it’s crucial for taxpayers and high earners to stay informed about these recent amendments. The Income Tax Ordinance 2001, as amended up to June 30, 2023, represents the latest changes in tax law. Understanding these changes is vital for ensuring compliance and managing financial responsibilities effectively.

In conclusion, these amendments, primarily outlined in Section 4B and Section 4C, aim to strike a balance between revenue collection and providing relief to specific groups, all while aligning with Pakistan’s economic and social goals. Stay updated and navigate these changes wisely for a more tax-efficient future.

References:

• Income Tax Ordinance, 2001 (Sections 4, 4B, and 4C)
• First Schedule of the Income Tax Ordinance, 2001

Mandatory Display of Tax Numbers and Licenses

As per Section 181C of the Income Tax Ordinance, 2001, it is now mandatory for all businesses to display their NTNs at every location of their business. Additionally, Section 181D of the same ordinance mandates that businesses, professions, or vocations obtain and prominently display a business license specified by the FBR. Failure to do so can result in fines and penalties.

Penalties for Non-Compliance

Businesses and individuals failing to display their NTN or business license will face a penalty of five thousand rupees, as stipulated under Section 181C of the Income Tax Ordinance, 2001. Furthermore, the Commissioner has the authority to impose varying fines depending on the circumstances. Taxpayers deriving income subject to tax under this ordinance may face a fine of twenty thousand rupees, while all other cases could incur a fine of five thousand rupees.

Cancellation of Business Licenses

The Commissioner also possesses the authority to cancel a business license under specific conditions, such as failure to report changes in particulars within thirty days of such changes or conviction of any offense under any federal tax law.

Enhancing Transparency and Compliance

These measures are part of the FBR’s ongoing efforts to enhance transparency and compliance within the business community and to ensure a fair and effective tax system. Compliance with these regulations is essential for business owners to avoid penalties and maintain legal compliance with tax laws.

For more information and guidance regarding the display of NTNs and business licenses, individuals and businesses are encouraged to contact the Federal Board of Revenue. Stay compliant and informed to avoid penalties under these new regulations.

Reference: Income Tax Ordinance of 2001, Sections 181C and 181D.