Punjab declares revised agricultural tax notifications unlawful

ISLAMABAD: Punjab Assembly Speaker Malik Muhammad Ahmad Khan has declared recent government notifications revising agricultural income tax rates unlawful and ordered an immediate stop to their enforcement, assessment and collection.

The ruling was issued during the 41st session of the Punjab Assembly on a privilege motion moved by MPA Zulfiqar Ali Shah. In his decision, the speaker held that the notifications had no legal effect because they were not laid before the assembly in line with the legal procedure set out in the relevant law.

He directed the Excise and Taxation Department to suspend implementation of the revised rates at once. He also instructed the government to place the notifications before the house within 15 days and submit a detailed report explaining how the lapse occurred.

The matter has also been sent to the Committee on Law Reforms and Delegated Legislation, which has been asked to determine responsibility and present its findings within one month.

Notifications and legal objection

The issue relates to notifications issued on March 5, 2025, through which agricultural income tax rates were revised. A subsequent notification dated September 10, 2025 sought to apply those revised rates retrospectively from July 1, 2025.

According to the privilege motion, the notifications were not presented before the Punjab Assembly at the time of the 2025-26 budget, despite the requirement under Section 11(2) of the Punjab Agricultural Income Tax Act, 1997.

In his ruling, the speaker said the power to impose taxes rests with the legislature under the Constitution and that any authority delegated for this purpose must be exercised strictly in accordance with the law. He observed that if such notifications are not placed before the assembly, they become ineffective and lack lawful basis.

The speaker also described the omission as a breach of parliamentary privilege and stressed the need for legislative oversight in taxation matters. He referred to relevant judicial precedents, including decisions of superior courts, in support of the requirement that tax notifications be presented before the legislature.

Directions for future tax changes

Malik Muhammad Ahmad Khan further directed that any future changes in agricultural income tax rates must be brought before the assembly during the annual budget session if they are to be enforceable.

The ruling also stated that taxpayers affected by the notifications that have now been declared void may seek relief through appropriate legal forums in relation to any recoveries made under the revised rates.

The decision underscores the assembly’s position that tax-related measures must follow the legislative process laid down in law before they can take effect.