Dr. Ikramul Haq
The double aspect doctrine deals not with what the “matter” is, but what it “comes within”. The doctrine of double aspect operates on the premise that a single subject may legitimately attract both federal and provincial legislative competence; for instance, while the generation and transmission of electricity fall within the federal domain, considerations of public health and safety arising therefrom remain within provincial jurisdiction—Attock Cement Pakistan Ltd v Province of Balochistan and another, Civil Petition No. 315 of 2024, Federal Constitutional Court of Pakistan
Under our constitutional fabric, the Federation and the Provinces do not function in isolation but advance in harmonious cadence, bound together in pursuit of prosperity, economic vitality, and national security as envisioned by the constitutional compact. Cooperative federalism, as our constitutional philosophy, rejects isolation; it demands that state institutions be interwoven strands of a single fabric, collectively striving toward a unified constitutional destiny—Pakistan College of Law v University of the Punjab, W.P No. 45178 of 2017, Lahore High Court
“271. Surcharge on certain duties and taxes for purposes of the Union.—Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles except the goods and services tax under article 246A, by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India”—Article 271, Indian Constitution
One of the most revealing silences in Pakistan’s constitutional framework is the absence of any provision comparable to Article 271 of the Constitution of India. This Article, reproduced above, empowers the Indian Parliament to “increase any of the duties or taxes” referred to in Articles 269 and 270 “except the goods and services tax under Article 246A”, by a surcharge for the exclusive use of the Union. The Constitution of Islamic Republic of Pakistan [“the Constitution”] contains no such authority as contains in Article 271 of the Constitution of India. Our constitutional jurisprudence has repeatedly confirmed that this omission is deliberate and legally consequential.
It is strange that even in the presence of the above incontrovertible constitutional position, the Federal Board of Revenue (FBR) in a review petition [(2023) 128 Tax 291 (S.C. Pak)], involving section 4B of the Income Tax Ordinance, 2001 pleaded, “Parliament has the authority….to levy Income Tax or Super Tax in special circumstances for the generation of extra funds, which in this case is for the rehabilitation of temporarily displaced persons…”
The Parliament in Pakistan has no authority to levy ‘tax’, which is general exaction without any specific purpose, for its exclusive use. Any imposition (nomenclature is of no significance) for specific purpose cannot be termed as tax—it must be levied by both Houses of Parliament [Senate & National Assembly] and cannot be part of the Money Bill. It is categorically held by Supreme Court in Durrani Ceremics case [(2014) 110 Tax 145 (S.C. Pak)] and Workers Welfare Funds case [(2016) 114 Tax 385 (S.C. Pak)]. The Supreme Court dismissed the FBR’s stance, patently against the Constitution, both at the time of refusing leave to appeal and later in review petition cited above.
Article 271 and the Indian Fiscal Model
Article 271 of Indian Constitution is a constitutional survival of the colonial fiscal architecture of the Government of India Act, 1935. It explicitly authorizes Parliament to levy a surcharge whose proceeds accrue solely to the Union. Indian courts have consistently upheld this power—not because it is implicit, but because it is textually sanctioned. Pakistan made a different constitutional choice.
1973 Constitution: A Conscious Break from Fiscal Centralism
The framers of the 1973 Constitution, particularly in the aftermath of 1971, rejected the notion of a fiscally dominant centre. Article 160 constitutionalized the National Finance Commission (NFC), converting revenue sharing from an administrative arrangement into a binding federal obligation.
The Supreme Court has recognised this shift as structural. In Sindh High Court Bar Association v Federation of Pakistan (PLD 2009 SC 879), the Court held that provincial autonomy is a substantive constitutional value, not a symbolic one (paras 255–257), and that fiscal arrangements are an integral component of the federal structure (para 260).
The absence of any Article-271-type provision in our Constitution must therefore be read as a constitutional negation of exclusive federal taxation, not a legislative oversight.
Federation Is Not the Federal Government Alone
The Supreme Court has repeatedly clarified that the “Federation” under the Constitution is a composite constitutional entity, comprising both the Centre and the Provinces.
In Mustafa Impex, Karachi v Federation of Pakistan (PLD 2016 SC 808), the Court laid down principles of enduring relevance to fiscal federalism. It held that financial authority flows strictly from the Constitution (para 28), that such authority is distributed rather than concentrated (paras 33–34), and that no organ of the State may appropriate financial power beyond what the Constitution expressly confers (para 37).
This pronouncement directly negates any claim that Parliament enjoys an inherent or residual power to levy taxes for its exclusive fiscal use.
NFC Award: Not a Discretion but a Constitutional Command
Attempts to ring-fence federal revenues outside the NFC framework have consistently failed judicial scrutiny.
In WAPDA v Federation of Pakistan (PLD 2012 SC 773), the Supreme Court held unambiguously that the NFC Award is a constitutional obligation (para 60) and that the financial arrangements between the Federation and the Provinces are constitutionally entrenched and enforceable (para 61).
This reasoning forecloses any legislative attempt to bypass the NFC Award through ordinary fiscal statutes, whether by direct exclusion or indirect fiscal engineering.
Labels Do Not Defeat Constitutional Substance
A recurring tactic in fiscal legislation has been to avoid the word “tax” by employing labels such as cess, charge, or surcharge. Pakistani courts have consistently rejected such semantic evasions.
In Pakistan Tobacco Company Ltd v Federation of Pakistan (2019 SCMR 473), the Supreme Court reaffirmed that the substance of a levy prevails over its nomenclature (para 17) and that any levy possessing the characteristics of a tax must satisfy all constitutional requirements applicable to taxation, regardless of its label (para 18).
Earlier, in Elahi Cotton Mills Ltd v Federation of Pakistan (PLD 1997 SC 582), the Court had already clarified that although the taxing power of Parliament is wide, it is not unlimited, and remains subject to the constitutional scheme and structural limitations (paras 16–17).
Fiscal Balance Cannot Be Disturbed by Ordinary Legislation
The Supreme Court has also cautioned against fiscal measures that upset the constitutional equilibrium between the Federation and the Provinces.
In Durrani Ceramics v Federation of Pakistan (2014 SCMR 1630), the Court held that fiscal legislation must conform to the constitutional distribution of powers (para 29) and that Parliament cannot, through ordinary financial statutes, disturb the constitutional balance inherent in federalism (para 30).
This principle strikes at the heart of any attempt to introduce an Article-271-style surcharge regime in Pakistan without a constitutional amendment.
Why Indian Precedents Not Relevant
Pakistani courts have consistently warned against uncritical reliance on Indian constitutional precedents. Comparative jurisprudence is persuasive only where constitutional texts are analogous.
Indian judgments upholding Union surcharges rest entirely on Article 271. Pakistan’s Constitution contains no such provision. Where the constitutional text diverges, comparative reliance collapses.
Conclusion: Fiscal Federalism Is Constitutional Command
The explicit language of Constitution and Supreme Court’s jurisprudence, read as a whole, yields a clear constitutional conclusion:
- Parliament has no inherent fiscal sovereignty beyond the Constitution (Mustafa Impex, paras 28, 37)
- Provincial participation in federal revenues is constitutionally protected (Sindh High Court Bar Association, paras 255–260)
- The NFC Award cannot be bypassed by ordinary legislation (WAPDA, paras 60–61)
- Fiscal labels cannot defeat constitutional substance (Pakistan Tobacco, paras 17–18)
- Exclusive federal taxation would disturb the constitutional balance (Durrani Ceramics, paras 29–30)
In Pakistan, therefore:
No tax can be levied by the National Assembly for the exclusive use of the Federal Government unless the Constitution itself is amended. Article 271 of Indian Constitution expressly permits it. Its absence in Pakistan is equally communicative. Cooperative fiscal federalism (a separate article on it will be presented soon) in Pakistan is not a matter of policy convenience—it is a constitutional command.
References
- Mustafa Impex, Karachi v Federation of Pakistan, PLD 2016 SC 808 (paras 28, 33–34, 37).
- Sindh High Court Bar Association v Federation of Pakistan, PLD 2009 SC 879 (paras 255–260).
- WAPDA v Federation of Pakistan, PLD 2012 SC 773 (paras 60–61).
- Pakistan Tobacco Company Ltd v Federation of Pakistan, 2019 SCMR 473 (paras 17–18).
- Durrani Ceramics v Federation of Pakistan, 2014 SCMR 1630 (paras 29–30).
- Elahi Cotton Mills Ltd v Federation of Pakistan, PLD 1997 SC 582 (paras 16–17).
- Constitution of Pakistan, 1973, Articles 141–142, 153–154, 160.
- Constitution of India, 1950, Article 271.
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Dr. Ikramul Haq, Advocate Supreme Court, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.