PLD 1989 KARACHI 15
Per Saeeduzzaman Siddiqui, J.
(a) Constitution of Pakistan (1973), Art.142-
r/w Wealth Tax Act (XV of 1963)-Preamble-S. 3-
Parliament has exclusive power to legislate in respect of all or any of the items specified in the Federal Legislative List. The Parliament is also entitled to legislate in respect of items enumerated in Concurrent Legislative List of the Constitution along side with the Provincial Assemblies. However, in respect of items not mentioned in either of the above two legislative lists of the Constitution only Provincial Assemblies are empowered to legislate. However, such legislative power in respect of items not specified in either of the two legislative lists of the Constitution is also exercisable by the Parliament, but only in respect of the areas which are not included in any of the Provinces. It is, therefore, quite clear, that where a question arises as to the competence of Parliament to promulgate any legislation (not covered by clause (d) of Article 142 of the Constitution), it is to be seen whether the subject-matter of legislation is covered by any entry either in Federal or the Concurrent Legislative List of the Constitution. [p. 19] A.
In the light of the above-noted meanings of the words ‘Capital, Value and Assets’, the expression ‘Capital value of the assets’ in our opinion means the total value expressable in terms of money of the properties of all kinds possessed by a person excluding his liabilities. We now turn attention to the meaning of word “Wealth” used in the preamble of the Act. “Wealth” is not defined in the Act but “net wealth” is defined therein as follows:-
“net wealth” means the amount by which the aggregate value computed in accordance with the provisions of this Act, of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than-[p. 20] C.
We have already pointed out above that on the basis of dictionary meaning of words ‘Capital Value’ and ‘Assets’ the expression ‘Capital Value’ of ‘Assets’ would mean the value expressed in terms of money of the properties of all kinds possessed by a person and it is in this sense that this expression is also commonly understood in commercial and business parlance. [p. 21] E.
Firstly, we are unable to find any material difference between the concept of taxation under section 3 of the Act and entry No.50 of the Federal Legislative List of Constitution on the above ground. The underlying object of aggregation of all the properties of an assessee for the purposes of levy of tax is common both in section 3 of the Act as well under entry No.50 of the Federal Legislative List of the Constitution. The fact that the authorities while providing for determination of tax liability of an assessee under the Act allowed reduction of all his outstanding liabilities from the aggregated value of his assets has no bearing on the character or nature of the tax. This feature of the Act only indicates a mechanism or a method provided under the Act for calculation the tax liability of an assessee under it which certainly cannot affect or change the character or nature of the tax. There is no justification for the above reasons to hold that the tax levied under section 3 of the Act on the ‘net wealth’ is in any manner different from the tax on the capital value of the assets as contemplated by entry No.50 of the Federal Legislative List of the Constitution which could be interpreted as placing any fetter on the power of legislature while providing for tax on the capital value of assets of a person, to allow deduction of liabilities outstanding against him from the value of his assets. [p. 22] F.
We are, therefore, unable to agree with the contention that because it was not incumbent on the parliament while legislating in respect of tax under entry No.50 of Federal Legislative List of Constitution to provide for deduction of debts in ascertaining the capital value of assets and that they did allow such deduction under the Act, therefore, the nature of tax levied under the Act should be held different from the concept of taxation under entry No.50 of Federal Legislative List of the Constitution. The effect of allowing deduction of debts in ascertaining the value of assets under the Act has been dealt with at length earlier in this order by us and need not be repeated here again. Suffice it to say that the fact that the legislature had allowed deduction of debts under the Act in ascertaining the capital value of assets could in no way change the nature of tax which is contemplated under entry No.50 of the Federal Legislative List of the Constitution.
[p. 25] H & I.
Advocate for the Petitioners:
Nasim Ahmad Khan.
Advocate for the Respondents:
Date of hearing: 4th October, 1988.