In a key legal development, the Supreme Court of Pakistan has suspended the Peshawar High Court’s (PHC) verdict that had nullified the application of the Sales Tax Amendment Act in the former FATA (Federally Administered Tribal Areas) and PATA (Provincially Administered Tribal Areas). The Act is now temporarily reinstated following the top court’s ruling.
A five-member constitutional bench headed by Justice Aminuddin Khan issued the order while hearing appeals filed by the Ghee and Steel Mills Association. The bench accepted the argument that the PHC had exceeded its jurisdiction and granted an interim stay, effectively restoring the sales tax law in the previously exempted tribal areas.
Previously, the Peshawar High Court had struck down the implementation of the Sales Tax Amendment Act in ex-FATA and PATA, declaring it unconstitutional. However, the Supreme Court has now reversed that order, at least temporarily, and issued notices to all concerned parties for further proceedings.
Advocate Hafiz Ehsaan, representing the Ghee and Steel Mills Association, argued that the High Court cannot act as a substitute for the Parliament. He maintained that the PHC had overstepped its authority by granting relief beyond the scope of the original petition. “This case involves billions in tax revenues. The court cannot issue orders for customs clearance without legal backing,” he said.
The Supreme Court has not set a specific date for the next hearing, leaving the matter pending for an indefinite period. However, the temporary restoration of the Act allows the Federal Board of Revenue (FBR) to continue collecting sales tax from businesses operating in the ex-FATA and PATA regions, subject to final adjudication.
This decision is expected to have a significant economic impact, especially on industries that have long benefitted from tax exemptions in these areas.