LAHORE:
Punjab Assembly Speaker Malik Muhammad Ahmad Khan declared the government’s recent notifications revising agricultural income tax rates illegal and ordered immediate cessation of its implementation, assessment and collection.
The ruling came during the 41st session of the Punjab Assembly on a privilege motion moved by MPA Zulfiqar Ali Shah.
The Speaker maintained that the notifications lacked legal validity as they were not presented to the Assembly in accordance with legal requirements.
It directed the Excise and Taxation Department to suspend the implementation of the revised rates and directed the government to file relevant notifications before the House within 15 days, along with a detailed report explaining the lapse.
The matter has also been referred to the Law Reform and Delegated Legislation Commission to determine responsibilities and present conclusions within a month.
The issue arises from notifications issued on March 5, 2025, which revised agricultural income tax rates, followed by another notification on September 10, 2025, which sought retrospective application from July 1, 2025.
The mover of the motion argued that these were not presented before the Assembly at the time of Budget 2025-26, as required by Section 11(2) of the Punjab Agricultural Income Tax Act, 1997. In his ruling, the Speaker emphasized that taxing powers vest in the legislature under the Constitution and any delegated authority must strictly follow legal procedures.
It observed that failure to submit such notifications to the Assembly renders them ineffective and without legal basis.
The Speaker also called the omission a violation of parliamentary privilege and reiterated the importance of legislative oversight in tax matters.
He cited relevant judicial precedents, including higher court rulings, to support the requirement to file tax notices with the legislature.
Additionally, he ordered that all future changes to agricultural income tax rates must be brought before the Assembly during the annual budget session to be enforceable. The ruling clarified that taxpayers affected by the now void notices can seek relief through appropriate legal forums in respect of any recovery made under the revised rates.
