The decision of the Supreme Court of Pakistan that non-declaration of London flat by Imran Khan, Chairman Pakistan Tahreek-e-Insaf (PTI), in his wealth tax and income tax returns in Pakistan and subsequent disclosure through an amnesty scheme saved him from disqualification under Article 62(1)(f) of the Constitution of Pakistan has elicited criticism. Critics say that availing of the amnesty scheme was confession of dishonesty. Tax benefit derived was fine, but illegibility under section 99(1)(f) of Representation of Peoples Act, 1976 (ROPA) and Article 62(1)(f) of the Constitution of Pakistan was established. They say that beneficiary of any amnesty (it includes Section 5 of Protection of Economic Reforms Act, 1992) cannot hold ‘public office’ (this expression includes all legislators). The issue before Supreme Court in Constitutional Petition 35 of 2016 [Muhammad Hanif Abbasi v Imran Khan Niazi] was declaration of assets by Imran Khan held through an offshore company, Niazi Services Limited (NSL) — a Jersey-based limited liability company formed on 10.5.1983. Petitioner submitted: “Under the Wealth Tax Act, 1963 repealed on 1.7.2003 (‘the Act, 1963’) the respondent was bound to declare NSL and the assets owned by it. He referred to Sections 4 [particularly sub-section (1)(a)(iii) and (5)] and 14 of the Act, 1963 and the Wealth Tax Forms (old and current)’. It is an admitted fact that Imran Khan, availing Tax Amnesty Scheme of 2000, issued under section 59D of the repealed Income Tax Ordinance, 1979, paid tax of Rs. 240,000 for undeclared Flat No.2, 165 Draycott Avenue, London (purchased for UK £ 117,000 in 1983 and sold in April 2003 at a net amount of £690,307). According to Imran Khan, since the amnesty scheme conferred privileges and rights, disclosure under it was complete with respect to income earned and the asset acquired — entitling him to complete immunity from all tax consequences on account of past non-disclosure. The declaration of asset by him made in the year 2000 also reflected in statements of assets and liabilities filed before the Election Commission of Pakistan (ECP) along with his nomination papers filed for the 2002 general elections. In Para 59 of its judgement, Supreme Court noted as under: “Coming back to the factum of non-declaration of the London flat and NSL, the learned counsel for the respondent informed that the respondent began filing his income tax returns in Pakistan in 1981. It is an admitted fact that he neither disclosed NSL nor the London flat in such income tax returns. It is the Respondent’s case that he did not disclose NSL as an asset in his tax returns for the reason that it is a juristic person of which he was not a shareholder, director or owner. He also did not disclose the London flat upon legal advice that since it was purchased with foreign income, there was no requirement to make its declaration in his income or wealth tax returns. The fact is that the respondent purchased the London flat in 1983, two years after he became an income tax filer in Pakistan in 1981. Even if foreign earnings as non-resident were the source of funding for the London flat, yet it was an asset which he was bound to disclose in his wealth tax return under the Wealth Tax Act, 1963 after he became a filer in 1981. Therefore, the respondent was a defaulter in relation at least to his duty under the Wealth Tax Act, 1963. This situation continued until 1.3.2000, when the Central Board of Revenue (CBR) announced a Tax Amnesty Scheme 2000 (the Amnesty Scheme). The judgement in the case of Imran Khan holds that a tax defaulter can pass the test of Article 62(1)(f) of the constitution and section 99(1)(f) of ROPA if he avails amnesty before filing of nomination papers The above paragraph confirms that there was default of non-payment of tax under Wealth Tax Act, 1963 by Imran Khan for 17 years and he availed tax amnesty scheme to cover it. The Supreme Court concluded: “As the sale of the London flat had been finalised before 30.06.2003, therefore for the purpose of the respondent’s annual statement of assets and liabilities under Section 42A ROPA made as of 30.6.2003 the London flat had ceased to be his asset”. Critics say that the issue was not that of declaration of asset after its sale (which was undoubtedly not to be made), but the implication of availing tax amnesty for tax evasion for 17 years vis-à-vis Article 62(1)(f). Can such a person still pass the test of being ‘sagacious, righteous and non-profligate and honest and ameen’? The court answered the question in affirmative: “Declaration of the London flat in the Amnesty Scheme in 2000 followed by its disclosure in the respondent’s wealth statement as of 30.06.2002 filed under section 58 of the ordinance, 1979 and reporting the same in the statement of assets and liabilities annexed by the respondent with his nomination forms in the general election of 2002, he cannot be faulted for concealment or misdeclaration under the taxation laws of the country or the ROPA”. The judgement in the case of Imran Khan holds that a tax defaulter can pass the test of Article 62(1)(f) of the constitution and section 99(1)(f) of ROPA if he avails amnesty before filing of nomination papers. In Muhammad Siddique Baloch vs Jehangir Khan Tareen [PLD 2016 Supreme Court 97], it was held by Supreme Court that a person who was untruthful or dishonest or profligate “has no place in discharging the noble task of law making and administering the affairs of State in government office”. In the case of Imran Khan, a different ratio emerges that tax avoidance and/or evasion becomes legitimate after availing amnesty and makes a person eligible to contest election and hold public office. In established democracies, avoiding/evading tax and/or availing tax amnesty disentitles a person to take part in politics, what to speak of representing people. Judgement in the case of Imran Khan holds otherwise. It is good news for tax-lax public representatives and future candidates as a new amnesty for foreign assets/incomes is on the card. This was publicly announced by recently appointed Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Miftah Ismail. They may avail it to avoid disqualification in 2018 elections. It is reported that in the proposed scheme, ‘confidentiality’ will also be ensured. In other words, the voters will not even know who availed it. This can happen only in Pakistan — it is open mockery of constitution and the rule of law. The writer, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email: ikram@huzaimaikram.com; Twitter: @drikramulhaq Published in Daily Times, December 31st 2017.