The Punjab Assembly on Monday declared notifications issued by the provincial government to revise agricultural income tax rates “illegal, unconstitutional and void ab initio,” nullifying all collections made thus far.
Delivering the ruling, Speaker Malik Muhammad Ahmad Khan said the Punjab government violated mandatory legal and constitutional requirements by failing to present rate-altering notifications before the assembly when it presented the FY26 budget.
The ruling was delivered on a privilege motion moved on Sept. 15, 2025, by MPA Zulfiqar Ali Shah, who had challenged the legality of the notifications issued on March 5, 2025, and Sept. 10, 2025. Citing Articles 77 and 127 of the Constitution, the speaker noted taxation powers rest exclusively with the legislature and cannot be exercised by the executive without strict compliance with statutory conditions. Section 11(2) of the Punjab Agricultural Income Tax Act, 1997 requires all changes to tax rates to be placed before the Assembly during the budget session, he added.
The ruling also cited several judicial precedents, including World Call Telecom Ltd. vs Government of the Punjab (2023) and Engineer Iqbal Zafar Jhagra vs. Federation of Pakistan (2013), stressing failure to lay such notifications before the assembly rendered them legally non-existent.
It said the notifications were now “treated as never having had legal existence,” adding any tax assessments, demands, or collections made under the revised rates lacked lawful authority. This, potentially, allows affected taxpayers to seek relief and refunds through courts.
Declaring the government’s move a breach of parliamentary privilege, the speaker asserted that bypassing legislative oversight on taxation amounted to an unconstitutional usurpation of authority. He directed the Board of Revenue to halt all enforcement actions under the revised rates and ordered the government to submit, within 15 days, the notifications, a compliance explanation, and any legal opinions relied upon.
The ruling also referred the matter to the Law Reforms and Delegated Legislation Committee to investigate the lapse, assess fiscal implications, fix responsibility and propose safeguards within one month.