Exemption from TAX

Citation Name : 2019 SCMR 865 SUPREME-COURT
Side Appellant : LIAQUAT NATIONAL HOSPITAL
Side Opponent : PROVINCE OF SINDH
Fiscal statute---Exemption from TAX ---Burden of proof---One who claimed exemption (from payment of TAX ) must establish that he fell within the four corners of such exemption.

Citation Name : 2019 SCMR 865 SUPREME-COURT
Side Appellant : LIAQUAT NATIONAL HOSPITAL
Side Opponent : PROVINCE OF SINDH
S. 4(f)---Sindh Urban Immovable Property TAX Rules, 1958, Rr. 23 & 24---Societies Registration Act (XXI of 1860), Preamble---Liaquat National Hospital/Institute of Postgraduate Medical Studies and Health Sciences ('the subject hospital')---Property TAX , payment of---Charitable institution---Charitable purposes---Exemption from payment of property TAX ---Subject hospital by virtue of its registration under the Societies Registration Act, 1860 ipso facto did not become entitled to exemption from payment of property TAX visualized by S. 4(f) of the Sindh Urban Immovable Property TAX Act, 1958 ('the Act')---Exemption from payment of property TAX was available to a charitable institution if on the basis of an application moved in such regard, the competent officer of the Department came to the conclusion that its assets were used exclusively for charitable purposes---Building of the subject hospital was not used exclusively for charitable purposes---Counsel for the subject hospital admitted that the hospital charged fee for the services provided to patients who could pay for the same, but provided subsidies and rebates to the needy patients as well as some charitable healthcare services---At best, the subject hospital was providing services to paying patients (non-charitable) and non-paying/partly paying patients (possibly charitable)---In view of such circumstances the immovable property of the subject hospital was not used exclusively for charitable purposes---Fact that the profits of the subject hospital were not distributed amongst the members did not by itself establish that it was a charitable organization bringing it within the ambit of S. 4(f) of the Act read with Rr. 23 & 24 of the Sindh Urban Immovable Property TAX Rules, 1958 ('the Rules')---Audited accounts of the subject hospital as well as the analysis of such accounts undertaken by the TAX department for the years 1982 to 2002, clearly established that only paltry amounts had been spent on public charity by way of discounts, rebates and concessions in fee presumably to the poor and needy patients; that the subject hospital extensively engaged in commercial activities and spent a very low portion of its funds on public charity while charging high fees for providing healthcare and diagnostic services---Subject hospital was not entitled to the benefit of exemption from payment of property TAX as visualized in S. 4(f) of the Act read with Rr. 23 & 24 of the Rules---Appeal was dismissed accordingly.

Citation Name : 2019 SCMR 574 SUPREME-COURT
Side Appellant : SAMI PHARMACEUTICALS (PVT.) LTD.
Side Opponent : FEDERATION OF PAKISTAN
S. 19---Sales TAX Act (VII of 1990) S. 13(2)(a)---Principle enunciated by the Supreme Court in the case of Al-Samrez Corporation v. Federation of Pakistan (1986 SCMR 1917)---Scope---Effective rate of duty---Scope---Principle enunciated in Al-Samrez case provided that if an importer altered his position in reliance on an exemption notification (e.g., by entering into a contract or opening a letter of credit), he then acquired a vested right in the exemption to which he remained entitled even if the exemption itself stood withdrawn by the time the goods arrived in Pakistan.