PM **t above the cabinet, declares SC
 

Says PM can’t take decisions on financial matters, SROs without cabinet’s approval; ** bill can be presented in parliament without cabinet’s approval



ISLAMABAD: The Supreme Court on Thursday ruled that the prime minister is **t above the cabinet and he can**t take decisions on financial matters and make statutory regulatory orders (SROs) without the federal cabinet’s scrutiny and approval.

A three-member bench of the apex court, headed by Justice Mian Saqib Nisar, struck down the impugned **tifications for withdrawing exemption of sales tax to the companies, importing cellular phones and textile goods.

“The impugned **tifications are declared ultra vires and are struck down,” the court an**unced in its judgment with the ruling that fiscal **tifications enhancing the levy of tax issued by the secretary, Revenue Division, or the minister, are ultra vires.

The court accepted the appeals filed by the petitioners, the companies importing cellular phones and textile goods, against the judgment of Islamabad High Court (IHC). The court clarified that in passing, it has in the past consistently held that greater latitude is allowed in relation to beneficial **tifications and that principle still applies.

The counsels of cellular phones and textile goods importers’ argued that the federal government earlier had granted them certain exemptions from sales tax, but subsequently these exemptions were either withdrawn or tax rates modified vide **tifications **.280(1)/2013 and 460(1)/2013, which were issued under the provisions of Sales Tax Act, 1990.

The importers had challenged the **tifications before the IHC that those were **t in accordance with Section 3 of the Sales Act. The high court, however, dismissed their petitions. The importers had filed appeals against the IHC verdict in the apex court. The court on Thursday set it aside.

The judgment authored by Justice Mian Saqib Nisar ruled that the prime minister can**t take decisions by himself, or by supplanting or ig**ring the cabinet because the power to take decisions is vested with the federal government i.e. the cabinet, and leader of the House and unilateral decisions taken by him would be a usurpation of power.

The court observed that the ordinance making power can only be exercised after a prior consideration by the cabinet, adding that any ordinance issued without the prior approval of the cabinet is **t valid.

Similarly, ** bill can be moved in Parliament on behalf of the federal government without having been approved in advance by the cabinet, says the judgment. It ruled that the cabinet has to be given a reasonable opportunity to consider, deliberate on and take decisions in relation to all proposed legislation, including the Finance Bill or Ordinance or Act. Actions by the prime minister on his own, in this regard, are **t valid and are declared ultra vires.

“Once again, it would be **ted that the power has been conferred **t on the prime minister but the federal government i.e. the cabinet. Similarly, Article 85 confers power, **t even on the federal government, but on the National Assembly to make a grant in advance for a period **t exceeding four months pending completion of the budgetary procedure laid down in Article 82 and Article 86 confers a similar power on the federal government but only during the period when the National Assembly stands dissolved. Clause (3) of Article 82 explicitly states that ** demand for a grant shall be made except on the recommendation, **t of the prime minister, but of the federal government i.e. the cabinet,” the court observed.

What are the powers of the prime minister in relation to such matters?, the court ruled that they are set out in Article 83 and are confined to a mere authentication of the grants made by signing a schedule setting them out.

The court held that these provisions are clearly articulated and must **t be violated in any circumstances. The judgment recalled that this court has already dealt with the question of the constitutionality of discretionary spending by the prime minister in the case reported as action against distribution of development funds by ex-prime minister Raja Pervaiz Ashraf (PLD 2014 SC 131). The court while citing paragraph 52 of the said judgment ruled that the National Assembly, while giving assent to a grant which is to be utilised by the executive at its discretion, has to follow the procedure provided in articles 80 to 84 of the Constitution as well as the Rules of Procedure, 2007.

However, such discretionary grant can**t be spent at the absolute discretion of the executive and the discretion has to be exercised in a structured manner.

The Constitution does **t permit the use/allocation of funds to MNAs/MPAs/**tables at the sole discretion of the prime minister or the chief minister. If there is any practice of allocation of funds to the MNAs/MPAs/**tables at the sole discretion of the prime minister/chief minister, the same is illegal and unconstitutional. The government is bound to establish procedure/criteria for governing allocation of such funds for this purpose.

Though funds can be provided for development schemes by way of supplementary grant but for that purpose procedure provided in Articles 80 to 84 of the Constitution and the rules/instructions **ted hereinabove has to be followed strictly.

The court further ruled that the said judgment had also ruled that funds can be allocated by way of re-appropriation but the procedure provided in the Constitution and the rules has to be followed in its true perspective. Similarly, it said, ** bulk grant can be made in the budget without giving detailed estimates under each grant divided into items and that every item has to be specified;

Likewise, the amounts as approved in the budget passed by the National Assembly have to be utilised for the purpose specified in the budget statement. Any re-appropriation of funds or their utilisation for some other purpose, though within the permissible limits of the budget, are **t justified. In such circumstances, the supplementary budget statement has to be placed before the Parliament following the procedure provided in articles 80 to 84 of the Constitution

The court ruled that any discretionary spending at the initiative of the prime minister alone is manifestly unconstitutional and contrary to law. This illegality will continue until such time when, at the very least, the procedure set out in paragraph 66 above is adopted and followed. Failure to do so would mean that the prime minister would remain personally responsible.

The court while summarising the conclusion of the judgment held that he Rules of Business, 1973 are binding on the government and a failure to follow them would lead to an order lacking any legal validity. It held that the federal government is the collective entity described as the cabinet constituting the prime minister and federal ministers.

Neither a secretary, **r a minister and **r the prime minister is the federal government and the exercise, or purported exercise, of a statutory power exercisable by the federal government by any of them, especially, in relation to fiscal matters, is constitutionally invalid and a nullity in the eyes of the law, says the judgment.

Similarly, budgetary expenditure, or discretionary governmental expenditure can only be authorised by the federal government i.e. the cabinet, and **t the prime minister on his own, the judgment ruled, adding that any Act, or statutory instrument (e.g. the telecommunication (re-organisation) Act, 1996) purporting to describe any entity or organisation other than the cabinet as the federal government is ultra vires and a nullity.

The ordinance making power can only be exercised after a prior consideration by the cabinet. An ordinance issued without the prior approval of the cabinet is **t valid. Similarly, ** bill can be moved in the Parliament on behalf of the federal government without having been approved in advance by the cabinet. The cabinet has to be given a reasonable opportunity to consider, deliberate on and take decisions in relation to all proposed legislation, including the Finance Bill or Ordinance or Act. Actions by the prime minister on his own, in this regard, are **t valid and are declared ultra vires.

The court expressed appreciation for the valuable assistance provided by the learned counsel who appeared in this matter.



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