25/05/2025
A HIGH COURT DECISION IS NOT BINDING ON OTHER HIGH COURTS
A SUPREME COURT DECISION IS BINDING ON ALL SUBORDINATE COURTS BUT NOT ON SUPREME COURT
Appellate Authority: Supreme Court of Pakistan (SC)
Appellants: The Additional Collector (Adjudication)
Section: 3A of the FED Act, 2005
Detailed judgment was issued on June 12, 2024.
Background: An appeal was filed against the SHC’s judgment dated Feb. 22, 2013, which declared Section 3A of the FED Act, 2005 void ab-initio. Section 3A was introduced by the Finance Act, 2007 and omitted by the Finance Act, 2011. It allowed the Federal Government to issue a SRO 655 of 2007 specifying goods for special excise duty, effective from July 1, 2007. The SC had previously addressed the controversy in a judgment dated October 18, 2011, but two counter-appeals were resolved in the latest judgment. The SC overruled the SHC judgment.
Decision of the Court:
First Ruling of the Court: BINDING PRECEDENT
The SC had confirmed the validity of a Notification related to Section 3A, making it binding on other courts. Consequently, the SHC should not have ruled on a matter that had already been settled by the SC. The LHC’s decision, upheld by the SC earlier, was final and binding, rendering the SHC’s contrary ruling unsustainable.
Without altering the final outcome of the judgment, the Chief Justice of the Supreme Court did not agree about the binding nature of Lahore High Court judgment on the Sindh High Court, and held that a judgment is only binding on a subordinate court.
Second Ruling of the Court: LEGISLATIVE DELEGATION
Section 3A of the FED Act, 2005, intended to levy a 'special excise duty' on all goods produced, manufactured, and imported into Pakistan. The Federal Government was empowered to select specific goods for this duty and could set conditions and restrictions through official notifications. The collection of this duty was at the discretion of the Federal Government, but the rate and guidelines were set by the legislature. The delegation of power to the Federal Government was limited to ancillary functions, with clear standards and principles provided by the legislature.
07th OF 2024 KTBA ONE PAGER
CASE LAW UPDATE
(August 16, 2024)
Third Ruling of the Court: JUDICIAL DEFERENCE (RESPECT) FOR LAW
This Court holds that laws should be upheld rather than invalidated and courts should favor their constitutionality. Legislating is the exclusive prerogative of the legislature, presumed to act validly and constitutionally. Courts cannot rewrite laws or the Constitution and should not lightly strike down laws. They must reconcile statutes with the Constitution, invalidating them only when absolutely necessary. Laws cannot be struck down on ethical or philosophical grounds, and no malice can be attributed to the legislature. Courts must support representative governance and apply strict criteria in judicial reviews.
Fourth Ruling of the Court: ALL POWERS EXCEPT THE POWER TO MAKE LAW, CAN BE DELEGATED
It is established that essential legislative functions cannot be delegated beyond reasonable limits, as this would violate the Constitution. The legislature, created by the Constitution, does not have absolute legislative power and must operate within the powers granted to it. It sets legislative policies and principles for the guidance of delegated authorities. While the fundamental legislative responsibility cannot be delegated, certain constraints apply to delegation. The Majlis-e-Shoora (Parliament) must fulfill primary constitutional functions, while it may delegate ancillary and administrative tasks to other agencies or authorities.
Fifth Ruling of the Court: NO PRESUMPTION ALLOWED
Upon reviewing the High Court's reasoning for striking down Section 3A of the Act of 2005, it is clear that the decision was based on presumptions regarding the potential abuse of power by the Federal Government. This approach contradicts established principles regarding the striking down of legislative acts. The legislature did not relinquish its essential functions; rather, it delegated incidental and ancillary functions to the Federal Government. Consequently, the doctrine of impermissible excessive delegation of legislative authority was not applicable, and Section 3A should not have been invalidated.
