Tax evaders are enemy of tax system : SC
Staff Reporter :
In the full text of a verdict, the apex court has observed that the tax evaders are enemy of the tax system. It further observed that some large companies and firms hire renowned accountants to take various scheme and leaving no stone unturned to avoid tax.
A five-member bench of the Appellate Division headed by Chief Justice Hasan Foez Siddique passed the observation in the verdict after hearing a total of 84 leave to appeal petitions filed by some renowned companies and firms.
Appeal petitions were filed against a High Court verdict that declared lawful the section 16 CCC of Income Tax Ordinance, 1984 that prescribes charging minimum tax on total transaction of the companies or firms.
In the observation the top court also said, “Tax evasion and avoidance erodes tax base and hampers revenue collection thereby bringing serious threat to the fiscal health of the country.
Again the evil consequences of tax avoidance affects our mass people directly because expenditure of the Government including the implementation or execution of the development project can be meet by the revenue which is earned through collection of tax.”
The apex court delivered its short verdict on December 14 in 2022, while the full text has been released on the SC website recently.
According to the verdict, some companies and firms filed return for the assessment year 2009-2010 based on audited accounts under Section 35(3) of the Ordinance, 1984. But the legislature suddenly incorporated Section 16 CCC in the Ordinance, 1984 through the Finance Act, 2011, imposing liability of paying minimum tax @ 0.50 percent on gross receipts for every company irrespective of its profit or loss in an assessment year from all sources.
In this circumstance, the companies and the firms filed separate writ petitions with the High Court challenging incorporation of Section 16 CCC of Income Tax Ordinance, 1984 through Finance Act, 2011, saying the Section is violation of fundamental rights enshrined in Articles 26, 27, 31, 40 and 42 of the Constitution.
