Supreme Court Addresses Retroactive Legislation in Tax Case

Justice Mansoor Ali Shah of the Supreme Court of Pakistan has released a written ruling regarding a significant tax case, outlining the boundaries of parliamentary legislative authority as defined by the constitution.

In his comprehensive 41-page decision, Justice Shah stated that while Article 142 empowers Parliament and provincial assemblies to enact laws, any legislation with retroactive effects must adhere to constitutional limits.

The ruling emphasizes that the constitution forbids Parliament from revoking rights guaranteed under Articles 9 and 28. Furthermore, it clarifies that retroactive application of criminal laws is only permissible in cases of constitutional infringement.

Justice Shah underscored that Parliament does not have the authority to apply civil rights retroactively, as this could compromise the rights of individuals. Citizens typically act based on current laws, making the retroactive enforcement of new laws problematic.

The Supreme Court noted the need for judicial understanding that retroactive legislation could reopen resolved issues. When faced with multiple interpretations of a law, courts should favor the one that safeguards citizens’ rights. The ruling also clarified that retroactive application is only valid for laws that do not negate previously granted rights.

As a result, the Supreme Court annulled the Sindh High Court’s decision and partially granted the appeals of private companies involved in the case.