IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: MR. JUSTICE MIAN SAQIB NISAR 
 
 
 
MR. JUSTICE IQBAL HAMEEDUR RAHMAN 
 
 
 
MR. JUSTICE TARIQ PARVEZ 
 
CIVIL APPEALS NO.1084 TO 1098/2008, 1481 TO 1529/2009, 254 
AND 255/2011, 310/2012, 1235 TO 1270/2015 AND CIVIL 
PETITIONS NO. 2595 AND 2596/2009 
(Against the judgments dated 10.4.2008, 27.5.2009, 17.2.2009, 31.3.2010, 24.12.2014, 
19.11.2014, 27.5.2009 of the Lahore High Court, Lahore passed in PTR Nos.12, 13, 14, 
15 & 16/2004, ITA Nos. 242, 246 & 601/1999, 268 & 806/2000, 294, 295 & 296/1999, 
49/2000, 82/2002, PTR Nos.402/2003, 117/2000, 403 & 404/2003, 216 & 217/2005, 
59, 60, 153, 154, 155, 156, 187, 188, 246 & 588/2006, 589, 19, 20, 67, 86, 88, 87, 89, 
90, 234, 277, 278, 295, 401, 515, 516 & 621/2007, W.P.No.1654/2009, PTR 
No.7991/2002, W.P.Nos.8317, 10124 & 10125/2002, PTR Nos.91/2007, 103/2005, 
194, 195, 236 & 247/2006, 373, 417, 319, 400, 326 & 327/2007, ITA No.357/1998, 
PTR Nos.303/2014, 1947, 467, 468, 469, 470, 471, 152, 557, 558, 559, 560, 561, 372, 
242, 448, 446, 447, 376, 377, 378, 379 & 380/2012, 202, 324 & 203/2013, 381, 382, 
383, 384, 205, 213, 363, 364, 393 & 159/2012 and W.P.Nos.17139 & 17659/2008) 
 
C.A.1084/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. 
Khurshid Ahmad 
 
 
C.A.1085/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. 
Khurshid Ahmad 
 
 
C.A.1086/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. 
Khurshid Ahmad 
 
 
C.A.1087/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. 
Khurshid Ahmad 
 
 
C.A.1088/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. 
Khurshid Ahmad 
 
 
C.A.1089/2008: 
Commissioner of Income Tax Legal Division Tax Office 
Lahore Vs. M/s Punjab Oil Products (Pvt.) Ltd. Faisalabad 
 
 
C.A.1090/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. M/s 
Madni Ghee Mills (Pvt.) Ltd. 
 
 
C.A.1091/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. M/s 
Tuff Tiles (Pvt.) Ltd. 
 
 
C.A.1092/2008: 
Commissioner of Income Tax Legal Division Lahore Vs. M/s 
S. K. Spinning Mills (Pvt.) Ltd. 
 
 
C.A.1093/2008: 
Commissioner of Income Tax Lahore Vs. M/s Ravi Plastic 
Industry (Pvt.) Ltd. 
 
 
C.A.1094/2008: 
Commissioner of Income Tax (Legal Division) Sialkot Vs. M/s 
Dawn Sports (Pvt.) Ltd. 
 
 
C.A.1095/2008: 
Commissioner of Income Tax (Legal Division) Sialkot Vs. M/s 
Anwar Khawaja Industries (Pvt.) Ltd. 
 
 
C.A.1096/2008: 
Commissioner of Income Tax (Legal Division) Sialkot Vs. M/s 
Grays of Cambridge (Pvt.) Ltd. 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 2 :-
 
 
C.A.1097/2008: 
Commissioner of Income Tax (Legal Division) Lahore Vs. M/s 
Star Mughal Industries (Pvt.) Ltd. 
 
 
C.A.1098/2008: 
Commissioner of Income Tax (Legal Division) Lahore Vs. M/s 
Continental Banking Industries (Pvt.) Ltd. 
 
 
C.A.1481/2009: 
Commissioner of Income Tax Lahore Vs. M/s Crescent Sugar 
Mills & Distillery Ltd. Lahore 
 
 
C.A.1482/2009: 
Commissioner of Income Tax/Wealth Tax, Lahore Vs. M/s 
Transtel International (Pvt.) Ltd. 
 
 
C.A.1483/2009: 
Commissioner of Income Tax Lahore Vs. M/s Crescent Sugar 
Mills Ltd. 
 
 
C.A.1484/2009: 
Commissioner of Income Tax Lahore Vs. M/s Crescent Sugar 
Mills Ltd. 
 
 
C.A.1485/2009: 
Commissioner of Income Tax/Wealth Tax Lahore Vs. M/s 
Shazor Feed (Pvt.) Ltd. 
 
 
C.A.1486/2009: 
Commissioner of Income Tax/Wealth Tax Lahore Vs. M/s 
Shazor Feed (Pvt.) Ltd. 
 
 
C.A.1487/2009: 
Commissioner of Income Tax Lahore Vs. M/s Sutlaj Security 
Services (Pvt.) Ltd. 
 
 
C.A.1488/2009: 
Commissioner of Income Tax Lahore Vs. M/s Sutlaj Security 
Services (Pvt.) Ltd. 
 
 
C.A.1489/2009: 
Commissioner of Income Tax Lahore Vs. M/s Crescent Jute 
Products (Pvt.) Ltd. 
 
 
C.A.1490/2009: 
Commissioner of Income Tax Lahore Vs. M/s Crescent Jute 
Products (Pvt.) Ltd. 
 
 
C.A.1491/2009: 
Commissioner of Income Tax Lahore Vs. M/s Crescent Jute 
Products (Pvt.) Ltd. 
 
 
C.A.1492/2009: 
Commissioner of Income Tax/Wealth Tax Lahore Vs. M/s 
Crescent Jute Products (Pvt.) Ltd.  
 
 
C.A.1493/2009: 
Commissioner of Income Tax Lahore Vs. M/s Olympia Textile 
Mills Ltd. 
 
 
C.A.1494/2009: 
Commissioner of Income Tax/Wealth Tax Lahore Vs. M/s 
Olympia Textile Mills Ltd. 
 
 
C.A.1495/2009: 
Commissioner of Income Tax Lahore Vs. M/s Imran Spinning 
Mills Ltd. 
 
 
C.A.1496/2009: 
Commissioner of Income Tax/Wealth Tax Lahore Vs. M/s 
Hira Textile Mills Ltd. 
 
 
C.A.1497/2009: 
Commissioner of Income Tax Lahore Vs. M/s Hira Textile 
Mills Ltd. 
 
 
C.A.1498/2009: 
Commissioner of Income Tax/Wealth Tax Lahore Vs. M/s 
Suleman Spinning Mills Ltd. 
 
 
C.A.1499/2009: 
Commissioner of Income Tax/Wealth Tax Lahore Vs. M/s 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 3 :-
Suleman Spinning Mills Ltd. 
 
 
C.A.1500/2009: 
Commissioner of Income Tax Lahore Vs. Pak Kuwait Textile 
Mills Ltd. 
 
 
C.A.1501/2009: 
Commissioner of Income Tax Lahore Vs. Ramzan Buksh 
Textile Mills Ltd. 
 
 
C.A.1502/2009: 
Commissioner of Income Tax Lahore Vs. Ramzan Buksh 
Textile Mills Ltd. 
 
 
C.A.1503/2009: 
Commissioner of Income Tax Lahore Vs. Ramzan Buksh 
Textile Mills Ltd. 
 
 
C.A.1504/2009: 
Commissioner of Income Tax Lahore Vs. Aruj Textile Mills 
Ltd. 
 
 
C.A.1505/2009: 
Commissioner of Income Tax Lahore Vs. Aruj Textile Mills 
Ltd. 
 
 
C.A.1506/2009: 
Commissioner of Income Tax Lahore Vs. Aruj Textile Mills 
Ltd. 
 
 
C.A.1507/2009: 
Commissioner of Income Tax Lahore Vs. M/s Darson 
Securities (Pvt.) Ltd. 
 
 
C.A.1508/2009: 
Commissioner of Income Tax Lahore Vs. Ali Akbar Spinning 
Mills Ltd. etc. 
 
 
C.A.1509/2009: 
Commissioner of Income Tax Lahore Vs. Ali Akbar Spinning 
Mills Ltd. 
 
 
C.A.1510/2009: 
Commissioner of Income Tax Lahore Vs. M/s Sargodha Mills 
Ltd. 
 
 
C.A.1511/2009: 
Commissioner of Income Tax Lahore Vs. Haseeb Waqas 
Sugar Mills Ltd. 
 
 
C.A.1512/2009: 
Commissioner of Income Tax Lahore Vs. M/s Arain Textile 
Mills Ltd. 
 
 
C.A.1513/2009: 
Commissioner of Income Tax Lahore Vs. M/s Arain Textile 
Mills Ltd. 
 
 
C.A.1514/2009: 
Commissioner of Income Tax Lahore Vs. M/s Crescent Ujala 
Ltd. 
 
 
C.A.1515/2009: 
Commissioner of Income Tax Lahore Vs. M/s Yahya Textile 
Mills Ltd. 
 
 
C.A.1516/2009: 
Commissioner of Income Tax Lahore Vs. M/s Azam Textile 
Mills Ltd. 
 
 
C.A.1517/2009: 
Commissioner of Income Tax Lahore Vs. M/s Taj Textile Mills 
Ltd. 
 
 
C.A.1518/2009: 
Commissioner of Income Tax Lahore Vs. M/s Fawad Textile 
Mills Ltd. 
 
 
C.A.1519/2009: 
Commissioner of Income Tax Lahore Vs. M/s Fawad Textile 
Mills Ltd. 
 
 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 4 :-
C.A.1520/2009: 
Commissioner of Income Tax Lahore Vs. M/s Kashmir Edible 
Oils Ltd. 
 
 
C.A.1521/2009: 
Commissioner of Income Tax Lahore Vs. M/s Himont 
Pharmaceutical (Pvt.) Ltd.  
 
 
C.A.1522/2009: 
Commissioner of Income Tax Lahore Vs. M/s Hilal Dyes (Pvt.) 
Ltd. 
 
 
C.A.1523/2009: 
Commissioner of Income Tax Lahore Vs. M/s Hilal Dyes (Pvt.) 
Ltd. 
 
 
C.A.1524/2009: 
Commissioner of Income Tax Lahore Vs. M/s Hira Textile 
Mills Ltd. 
 
 
C.A.1525/2009: 
Commissioner of Income Tax Lahore Vs. M/s Imran Spinning 
Mills Ltd. 
 
 
C.A.1526/2009: 
Commissioner of Income Tax Lahore Vs. M/s Arain Textile 
Mills Ltd. 
 
 
C.A.1527/2009: 
Commissioner of Income Tax Lahore Vs. M/s Margalla 
Textile Mills Ltd. 
 
 
C.A.1528/2009: 
Commissioner of Income Tax Lahore Vs. Haseeb Waqas 
Sugar Mills Ltd. 
 
 
C.A.1529/2009: 
Commissioner of Income Tax Lahore Vs. Haseeb Waqas 
Sugar Mills Ltd. 
 
 
C.A.254/2011: 
Commissioner of Income Tax Vs. M/s Crescent Sugar Mills 
 
 
C.A.255/2011: 
Commissioner of Income Tax Legal Taxpayer Unit Lahore Vs. 
M/s Crescent Sugar Mills, Lahore 
 
 
C.A.310/2012: 
Commissioner of Income Tax Vs. M/s Babar Flour Mills 
 
 
C.A.1235/2015: 
Commissioner Inland Revenue, Zone, Lahore Vs. Resham 
Textile Industries Limited, Lahore 
 
 
C.A.1236/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Imperial Electric Company (Pvt.) Ltd, National 
Tolwer, Egerton Road, Lahore 
 
 
C.A.1237/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Total Parco Pakistan Limited 
 
 
C.A.1238/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Total Parco Pakistan Limited 
 
 
C.A.1239/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Total Parco Pakistan Limited 
 
 
C.A.1240/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Total Parco Pakistan Limited 
 
 
C.A.1241/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Total Parco Pakistan Limited 
 
 
C.A.1242/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Taj Textile Mills Limited, Lahore 
 
 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 5 :-
C.A.1243/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Lahore Textile & General Mills Ltd, Monno House, 
3-Montgomery Road, Lahore 
 
 
C.A.1244/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Lahore Textile & General Mills Ltd. 
 
 
C.A.1245/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Lahore Textile & General Mills Ltd. 
 
 
C.A.1246/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Lahore Textile & General Mills Ltd, Monno House, 
3-Montgomery Road, Lahore 
 
 
C.A.1247/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Lahore Textile & General Mills Ltd., Lahore 
 
 
C.A.1248/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Crescent Sugar Mills Ltd., New Lahore Road, 
Nishatabad, Faisalabad 
 
 
C.A.1249/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. Lahore Textile & General Mills Ltd., Lahore 
 
 
C.A.1250/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s Anmol Textile Mills Limited, 83-A/H, Race 
View, Jail Road, Lahore NTN.1158022-4  
 
 
C.A.1251/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s Anmol Textile Mills Limited, 83-A/H, Race 
View, Jail Road, Lahore NTN.1158022-4 
 
 
C.A.1252/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s Anmol Textile Mills Limited, 83-A/H, Race 
View, Jail Road, Lahore NTN.1158022-4 
 
 
C.A.1253/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s ICC Textile Company (Pvt.) Limited, 242-A, 
Anand Road, Upper Mall, Lahore NTN.0658194  
 
 
C.A.1254/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s ICC Textile Company (Pvt.) Limited, 242-A, 
Anand Road, Upper Mall, Lahore NTN.0658194 
 
 
C.A.1255/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s ICC Textile Company (Pvt.) Limited, 242-A, 
Anand Road, Upper Mall, Lahore NTN.0658194 
 
 
C.A.1256/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s ICC Textile Company (Pvt.) Limited, 242-A, 
Anand Road, Upper Mall, Lahore NTN.0658194 
 
 
C.A.1257/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s ICC Textile Company (Pvt.) Limited, 242-A, 
Anand Road, Upper Mall, Lahore NTN.0658194 
 
 
C.A.1258/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s Pak Electron Limited, 17-Aziz Avenue, Canal 
Bank, Gulberg-V, Lahore 
 
 
C.A.1259/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s Hashir Textile Mills Limited, Main Market, 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 6 :-
Gulberg, Lahore  
 
 
C.A.1260/2015: 
Commissioner Inland Revenue, Zone-1, Regional Tax Office, 
Lahore Vs. M/s Pak Electron Limited, 17-Aziz Avenue, Canal 
Bank, Gulberg-V, Lahore 
 
 
C.A.1261/2015: 
Commissioner Inland Revenue, Zone-II, Large Taxpayers 
Unit, Tax House, Syed Mauj-e-Darya Road, Lahore Vs. M/s 
Kohinoor Mills Limited, 8-KM Manga Riwind Road, Lahore 
 
 
C.A.1262/2015: 
Commissioner Inland Revenue, Zone-II, Large Taxpayers 
Unit, Tax House, Syed Mauj-e-Darya Road, Lahore Vs. M/s 
Kohinoor Mills Limited, 8-KM Manga Riwind Road, Lahore 
 
 
C.A.1263/2015: 
Commissioner Inland Revenue, Zone-II, Large Taxpayers 
Unit, Tax House, Syed Mauj-e-Darya Road, Lahore Vs. M/s 
Kohinoor Mills Limited, 8-KM Manga Riwind Road, Lahore 
 
 
C.A.1264/2015: 
Commissioner Inland Revenue, Zone-II, Large Taxpayers 
Unit, Tax House, Syed Mauj-e-Darya Road, Lahore Vs. M/s 
Kohinoor Mills Limited, 8-KM Manga Riwind Road, Lahore 
 
 
C.A.1265/2015: 
Commissioner Inland Revenue Zone-I, Regional Tax Office, 
Faisalabad Vs. M/s Chen One Stores Limited c/o Chenab 
Ltd. Nishatabad Faisalabad 
 
 
C.A.1266/2015: 
Commissioner Inland Revenue Zone-I, Regional Tax Office, 
Faisalabad Vs. M/s Aizad Corporation (Pvt.) Ltd. Universal 
House, West Canal Road Farooqabad, Faisalabad 
 
 
C.A.1267/2015: 
Commissioner Inland Revenue Zone-I, Regional Tax Office, 
Faisalabad Vs. M/s Hamid Textile Mills Limited, 97-N, Model 
Town, Lahore 
 
 
C.A.1268/2015: 
Commissioner Inland Revenue Zone-I, Regional Tax Office, 
Faisalabad Vs. M/s Hamid Textile Mills Limited, 97-N, Model 
Town, Lahore 
 
 
C.A.1269/2015: 
Commissioner Inland Revenue Zone-I, Regional Tax Office, 
Faisalabad Vs. M/s Hamid Textile Mills Limited, 97-N, Model 
Town, Lahore 
 
 
C.A.1270/2015: 
Commissioner Inland Revenue, Zone-3, LTU, Tax House, 
Lahore Vs. M/s Total Parco Pakistan Limited, Lahore etc. 
 
 
C.P.2595/2009: 
Commissioner of Income Tax (Audit Division) RTO Faisalabad 
Vs. M/s Chen One Stores (Pvt.) Faisalabad & another 
 
 
C.P.2596/2009: 
Commissioner of Income Tax (Audit Division) RTO Faisalabad 
Vs. M/s Best Exports (Pvt.) Ltd. & another 
 
For the Appellant(s): 
Mr. Sarfraz Ahmed Cheema, ASC 
(in C.As.1485, 1486, 1489 to 1492, 1495, 1503, 1515 & 1525/2009) 
 
Mr. Ibrar Ahmed, ASC 
(in C.As.1235 to 1249, 1258, 1259 & 1270/15, 1488, 1507 & 1520/09) 
 
Mr. Muhammad Nawaz Waseer, ASC 
(in C.As.1250 to 1257/2015 & 1496 to 1499/2009) 
 
Mr. Muhammad Aamir Malik, ASC 
(in C.As.1501, 1502, 1493 to 1495 & 1527/2009 & 1084 & 1089/08) 
 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 7 :-
Dr. Ishtiaq Ahmed, Commissioner Inland Revenue 
Mr. Muhammad Iqbal Bhawana, Chief Legal, FBR 
Mr. Habib Qureshi, ASC 
 
 
For the Respondent(s): 
Mr. Salman Akram Raja, ASC 
(in C.A.1089/2008) 
 
Mr. M. Iqbal Hashmi, ASC 
(in C.As.1493, 1494/2009 & 1235/2015) 
 
Mr. M. Ajmal Khan, ASC 
(in C.As.1507, 1521 & 1527/2009) 
 
 
On Court’s call: 
Dr. Ikramul Haq, ASC 
 
 
Date of hearing: 
26.01.2016 & 27.01.2016 
 
* * * * * * * * * * 
 
JUDGMENT 
 
 
 
MIAN SAQIB NISAR, J:- These appeals, by leave of the 
Court, and petitions involve similar question(s) of law, hence are being 
disposed of together. The key questions involved herein are:- 
 
(i) 
whether the minimum tax payable under Section 80D 
of the Income Tax Ordinance, 1979 (Ordinance of 1979) is 
leviable on the aggregate of declared turnover from all 
sources including receipts covered by Sections 80C 
and 80CC of the Ordinance of 1979; 
 
(ii) 
whether the minimum tax payable under Section 113 
of the Income Tax Ordinance, 2001 (Ordinance of 2001), as it 
existed prior to its omission by the Finance Act, 2008, 
is leviable on the aggregate turnover from all sources 
including receipts covered by the Presumptive Tax 
Regime or upon which the tax payable/paid is a final 
discharge of tax liability (note:- the subsequent Section 113 re-
inserted vide Finance Act, 2009 has no bearing on the present matters as no tax 
year after re-insertion of the said section is involved thus all references to the 
‘Ordinance of 2001’ are to as it existed prior to the amendments brought by the 
Finance Act, 2008, unless stated otherwise); 
 
 
 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 8 :-
(iii) 
whether ‘services rendered’ pursuant to execution of a 
contract would fall within the Presumptive Tax Regime 
by virtue of Section 80C(2)(a)(i) of the Ordinance of 
1979, whereas Section 50(4)(a) deals with ‘services 
rendered’ and ‘execution of contracts’ as separate 
categories alongwith ‘supply of goods’; and 
 
(iv) 
whether cash purchase and/or purchase of raw 
material falls within the purview of ‘supply of goods’ as 
envisaged by Section 50(4)(a) of the Ordinance of 
1979? 
 
Out of the total of 105 cases (103 civil appeals and 2 civil petitions), 53 cases (Civil 
Appeals No.1481 to 1529/2009, 254 and 255/2011 and Civil Petitions No.2595 and 2596/2009) 
pertain to question No.(i); 36 cases (Civil Appeals No.1235 to 1270/2015) relate to 
question No.(ii); 5 cases (Civil Appeals No.1084/L to 1088/L/2008) pertain to  
question No.(iii); and 10 cases (Civil Appeals No.1089 to 1098/2008) pertain to 
question No.(iv). During the analysis portion of this opinion, questions 
No.(i) and (ii) shall be dealt with together as they are interlinked.  
2. 
 
For the sake of convenience and brevity, one case for each of 
the categories shall be taken to be the lead case for the purposes of 
explaining the factual background. With respect to question No.(i), the 
brief facts of Civil Appeal No.1482/2009 are that the Deputy 
Commissioner of Income Tax assessed the total income and determined 
the tax payable by the respondent-company under Section 80D without 
taking into consideration Section 80C. The assessment order was 
challenged by the respondent which (appeal) was accepted by the 
Commissioner of Income/Wealth Tax (Appeal) holding that income even 
though liable to tax under Section 80C should be taken into 
consideration by the Income Tax Officer while calculating the turnover 
for the purposes of Section 80D. Aggrieved, the appellants approached 
the Income Tax Appellate Tribunal which vide order dated 18.11.1999 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 9 :-
dismissed the appeal. Thereafter the appellants challenged such order 
before the learned High Court in an Income Tax Appeal which was 
dismissed vide order dated 27.5.2009 for the same reasons as 
enunciated in the judgment reported as Commissioner of Income 
Tax/Wealth Tax Companies Zone, Faisalabad Vs. Messrs Masood 
Textile Mills Ltd., Faisalabad (2009 PTD 1707) after which they 
approached this Court.  
For the purposes of question No.(ii) the facts of Civil Appeal 
No.1235/2015, are that the respondent-company filed its Income Tax 
Return for the Tax Year 2006 which was treated to be an assessment in 
terms of Section 120 of the Ordinance of 2001. The amended assessment 
order passed under Section 122 of the said Ordinance and the 
subsequent order dated 23.10.2012 passed by the Commissioner of 
Inland Revenue, Appeals were successfully challenged by the respondent 
before the Appellate Tribunal Inland Revenue which vide order dated 
15.9.2014 held that the minimum tax under Section 113 of the 
Ordinance of 2001 was to be calculated and charged on the basis of the 
aggregate turnover from all sources, including export receipts. Aggrieved, 
the appellants filed a reference petition under Section 133 of the said 
Ordinance before the Lahore High Court which upheld the decision of the 
Appellate Tribunal Inland Revenue vide order dated 24.12.2014 and 
decided it in the same terms as the judgment reported as Commissioner 
Inland Revenue Vs. Imperial Electric Company (Pvt.) Ltd. (2015 PTD 
884). The order dated 24.12.2014 has been impugned before this Court. 
In respect of question No.(iii), the concise facts of Civil Appeal 
No.1084/L/2008 are that the respondent was a sanitation contractor of 
the Capital Development Authority, Islamabad (CDA) who filed a return 
under Section 55 of the Ordinance of 1979 which though initially 
assessed under Section 59A, was subsequently revised and an order was 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 10 :-
passed by the Additional Commissioner under Section 66A to the effect 
that the payments received by the respondent from CDA were to be 
governed by the Presumptive Tax Regime of Section 80C which would be 
full and final discharge of tax liability. The order was successfully 
challenged by the respondent before the Income Tax Appellate Tribunal, 
subsequently the appellant filed applications under Section 136(1) of the 
said Ordinance before the Income Tax Appellate Tribunal which 
(applications) were dismissed. Thereafter, the appellant’s tax reference 
before the learned High Court was also dismissed while holding, inter 
alia, that income derived from ‘services rendered’ was not subject to the 
Presumptive Tax Regime of Section 80C which stands specifically 
excluded from such section, hence the instant appeal.  
Finally with regard to question No.(iv), the facts of Civil Appeal 
No.1089/2008 are that the respondent was deriving income from the 
manufacturing and sale of vegetable oil and ghee items. The Assessing 
Officer found the respondent to be in default under Section 52 of the 
Ordinance of 1979 on the basis that the respondent failed to deduct tax 
under Section 50(4) on account of certain purchases. The respondent’s 
appeal before the Commissioner Income Tax (Appeals) was accepted after 
which the appellant’s appeal before the Income Tax Appellate Tribunal 
and their reference before the  learned High Court were both dismissed 
primarily on the ground that on-the-spot cash purchases did not fall 
within the term ‘supply of goods’ as used in Section 50(4)(a) of the said 
Ordinance, thus the respondent was not in default in terms of Section 
52, thus the appellants approached this Court.   
3. 
 
Dr. 
Ishtiaq 
Ahmed, 
Commissioner 
Inland 
Revenue, 
appearing on behalf of the appellants/petitioners argued against the 
impugned judgments. With respect to questions No.(i) and (ii), he 
submitted that the phrases ‘turnover from all sources’ and ‘aggregate of 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 11 :-
declared turnover’ provided in Section 80D encompass income from all 
sources. He bifurcated the tax law regimes into the Presumptive Tax 
Regime and the Normal Tax Regime. The crux of his argument was that 
tax under the Presumptive Tax Regime is a final discharge of the tax 
liability of the taxpayer and thus should not be included for the purposes 
of calculation of ‘turnover’ in terms of Section 80D of the Ordinance of 
1979. To bolster the above submission, he drew our attention to the fact 
that a statement under Section 143B is to be filed regarding income 
chargeable inter alia under Sections 80C and 80CC, i.e. the Presumptive 
Tax Regime, as opposed to a return under Section 55 which is for the 
Normal Tax Regime. He also made reference to Sections 168 and 169 of 
the Ordinance of 2001 to support his arguments. He referred to and read 
out extensively the relevant provisions of the Ordinance of 1979 and 
quoted numerous practical examples as illustrations of tax calculation. 
4. 
 
On the other hand, the crux of the submissions of the 
learned counsel for the respondents was that the income taxable under 
Sections 80C and 80CC should not be excluded from ‘turnover’ under 
Section 80D which (word) has been specifically defined in the explanation 
to Section 80D(2) to mean gross receipts derived from the sale of goods, 
or from rendering, giving or supplying services or benefits or from 
execution of contract; and that there is nothing in Section 80D which 
allows for tax on income under Sections 80C and 80CC to be adjusted or 
for such income to be excluded from the ‘aggregate of declared turnover’, 
so far as it falls within the definition of ‘turnover’. 
 
Learned amicus curiae, Dr. Ikramul Haq, provided written 
submissions upon the Court’s request and his arguments shall reflect in 
the course of this opinion. However, it may be briefly mentioned at this 
stage that he argued to the same effect as the respondents with respect 
to the interpretation of Sections 80C, 80CC and 80D. He further 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 12 :-
submitted that it was not the intention of the Legislature to include sales 
made to walk-in customers within the purview of ‘supply of goods’ as 
contemplated by Section 50(4)(a) of the Ordinance of 1979, as evidenced 
by Section 153(1)(a) of the Ordinance of 2001. 
5. 
 
Heard. We intend to address questions No.(i) and (ii) (together) 
first. Under tax law, there are various taxation methods, including the 
two involved in the instant matters, i.e. presumptive and minimum tax. 
The nature, scope and raison d’être of the said two types of tax find apt 
and elaborate mention in the judgment reported as Messrs Elahi Cotton 
Mills Ltd and others Vs. Federation of Pakistan through Secretary 
M/o Finance, Islamabad and 6 others (PLD 1997 SC 582) a relevant 
extract from which is reproduced herein below, in order to appreciate the 
analysis in the later part of this opinion:- 
 
 
 
“34. ……………In our view, sections 80-C and 80-CC 
of the Ordinance fall within the category of 
presumptive tax as under the same the persons 
covered by them pay a pre-determined amount of 
presumptive tax in full and final discharge of their 
liability in respect of the transactions on which 
the above tax is levied. Whereas section 80-D of 
the Ordinance is founded on the theory of 
minimum tax which has been elaborately dealt with 
in the treatises, the relevant portions of which have 
been quoted in extenso hereinabove. 
 
40. Adverting to the impugned newly-added section 80-
D, it may be stated that we have already pointed out 
hereinabove that sections 80-C and 80-CC cannot be 
equated with section 80-D as the same is founded on 
different basis. It may again be observed that section 
80-D is based on the theory of minimum tax. It 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 13 :-
envisages that every individual should pay a minimum 
tax towards the cost of the Government………………” 
(Emphasis added) 
 
The above quoted passage makes it clear that the taxes under Section 
80D on the one hand and Sections 80C and 80CC on the other are 
distinct from each other. In order to answer questions No.(i) and (ii), the 
meaning and scope of the term ‘turnover’ needs to be examined. 
‘Turnover’ as mentioned in the provisions of Section 80D of the 
Ordinance of 1979 and Section 113 of the Ordinance of 2001 has not 
been defined in the definition clause of the Ordinances. However, in the 
Ordinance of 1979, ‘turnover’ has been assigned a meaning in the 
explanation to Section 80D itself. Section 80D of the Ordinance of 1979 
reads as follows:- 
 
“80D. Minimum tax on income of certain persons. (1) 
Notwithstanding anything contained in this Ordinance or 
any other law for the time being in force, where no tax is 
payable or paid by a company or a registered firm, an 
individual, an association of persons, an unregistered 
firm or a Hindu undivided family which, not being a 
company, does not qualify for assessment under the self 
assessment scheme under sub-section (1) of section 59 
resident in Pakistan or the tax payable or paid is less 
than one-half per cent of the amount representing its 
turnover from all sources, the aggregate of the 
declared turnover shall be deemed to be the income of 
the said company or a registered firm, an individual, an 
association of persons, an unregistered firm or a Hindu 
undivided family which, not being a company, does not 
qualify for assessment under the self assessment scheme 
under sub-section (1) of section 59 and tax thereon shall 
be charged in the manner specified in sub-section (2). 
 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 14 :-
Explanation.- For the removal of doubt, it is declared 
that the expression "where no tax is payable or paid" 
and "or the tax payable or paid" apply to all cases where 
tax is not payable or paid for any reason whatsoever 
including any loss of income, profits or gains or set off of 
loss of earlier years, exemption from tax, credits or 
rebates in tax, and allowances and deductions (including 
depreciation) admissible under any provision of this 
Ordinance or any other law for the time being in force. 
 
(2) The company or a registered firm, an individual, an 
association of persons, an unregistered firm or a Hindu 
undivided family which, not being a company, does not 
qualify for assessment under the self assessment scheme 
under sub-section (1) of section 59 referred to in sub-
section (1) shall pay as income tax- 
 
(a)  
an amount, where no tax is payable or paid equal 
to one-half per cent of the said turnover; and 
 
(b)  
an amount, where the tax payable or paid is less 
than one-half per cent of the said turnover, equal 
to the difference between the tax payable or paid 
and the amount calculated in accordance with 
clause (a). 
 
Explanation: For the removal of doubt it is declared 
that "turnover" means the gross receipts, exclusive 
of trade discount shown on invoices or bills, 
derived from the sale of goods or from rendering, 
giving or supplying services or benefits or from 
execution of contracts. 
 
(3) ……………………………………………………………” 
(Emphasis supplied) 
 
 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 15 :-
What is the worth of an explanation to a section in a statute and how is it 
to be interpreted? An explanation is appended to a section of an 
enactment to stipulate the meaning of a word, term, or phrase, and 
becomes part and parcel of the enactment. Its function is to clear the 
ambiguity and explain the meanings of the words used in the section to 
which it is appended.1 It is an intrinsic aid available to the reader to 
understand and appreciate the statute and particularly the section to 
which such explanation has been affixed. A plain reading of the meaning 
assigned to ‘turnover’ in the explanation to Section 80D of the Ordinance 
of 1979 clearly indicates that it (turnover) means gross receipts derived 
from: (i) the sale of goods; or (ii) rendering, giving or supplying services or 
benefits; or (iii) execution of contracts, and nothing more. That the 
meaning assigned to ‘turnover’ is comprehensive and does not include 
anything beyond what has been specified therein is bolstered by the fact 
that the explanation begins with the phrase “For the removal of doubt it is 
declared…” rendering the explanation a declaratory provision, and it is 
well-established that the very purpose of declaratory provisions or 
declaratory statutes is to remove doubts which exist, or may exist, in the 
meaning or effect of a provision or statute, as the case may be. Thus the 
phrases ‘turnover from all sources’ and ‘aggregate of declared turnover’ in 
Section 80D are to be necessarily read in conjunction with the 
explanation to Section 80D(2) of the Ordinance of 1979 for the purposes 
of determination of minimum tax liability. 
We find it relevant at this juncture to refer to the judgment 
reported as Nazir Hussain Shah Vs. The State (PLD 1965 SC 139) 
wherein, dilating upon the explanation appended to Section 6(5) of the 
Pakistan Criminal Law (Amendment) Act (XL of 1958), a five member 
                                                
1 Naveed Textile Mills Ltd. Vs. Assistant Collector (Appraising) Custom House, Karachi and others (PLD 
1984 SC 92), Chief Administrator of Auqaf, Punjab, Lahore Vs. Koura alias Karam Ilahi and another (PLD 
1991 SC 596). 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 16 :-
bench of this Court held that it was not open to the Court to read into 
the said section a limitation which was not there by reference to 
extraneous circumstances. In similar vein, we are of the view that the 
word ‘turnover’ specifically defined in Section 80D cannot be interpreted 
in a way so as to widen or enlarge the scope of the said section by 
interpreting ‘turnover’ to include income from all sources as has been 
argued by the appellants/petitioners. 
6. 
 
Now adverting to the meaning of ‘turnover’ in Section 113 of 
the Ordinance of 2001, which (meaning) has neither been provided in the 
definition clause of the said Ordinance or by way of explanation to the 
said section, instead a separate and exclusive sub-section, i.e. (3) of 
Section 113 has been dedicated to it, which (section) reads as under:- 
  
“113. Minimum tax on the income of certain persons.- 
(1) This section shall apply to a resident company where, 
for any reason whatsoever, including the sustaining of a 
loss, the setting off of a loss of an earlier year, exemption 
from tax, the application of credits or rebates, or the 
claiming 
of 
allowances 
or 
deductions 
(including 
depreciation and amortisation deductions) allowed under 
this Ordinance or any other law for the time being in 
force, no tax is payable or paid by the person for a tax 
year or the tax payable or paid by the person for a tax 
year is less than one-half per cent of the amount 
representing the person’s turnover from all sources for 
that year. 
 
(2) Where this section applies– 
 
(a) 
the aggregate of the person’s turnover for the 
tax year shall be treated as the income of the 
person for the year chargeable to tax; 
 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 17 :-
(b)
 
……………………………………………………
………. 
 
(c)
 
……………………………………………………
……….  
 
Provided 
that…………………………………………… 
 
(3) In this section, “turnover” means– 
 
(a) 
the gross receipts, exclusive of sales tax and 
Federal excise duty or any trade discounts 
shown on invoices or bills, derived from the 
sale of goods; 
 
(b) 
the gross fees for the rendering of services or 
giving benefits, including commissions; 
 
(c) 
the gross receipts from the execution of 
contracts; and 
 
(d) 
the company’s share of the amounts stated 
above of any association of persons of which 
the company is a member.” 
(Emphasis supplied) 
 
Where the legislature defines, in the same statute, the meaning of a word 
used therein, such definition most authoritatively expresses its intent 
which definition and construction is binding on the courts.2 When a 
word has been defined to mean such and such, the definition is prima 
facie restrictive and exhaustive.3 Upon a plain reading of the definition of 
‘turnover’ provided in Section 113(3) of the Ordinance of 2001 it is 
manifest that it (turnover) means: (i) gross receipts derived from the sale of 
goods; (ii) gross fees for the rendering of services or giving benefits, 
                                                
2 Interpretation of Statutes (11th Ed.) by N. S. Bindra. 
3 Vanguard Fire & General Insurance Co. Ltd., Madras Vs. Fraser & Ross (AIR 1960 SC 971). 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 18 :-
including commissions; (iii) gross receipts from the execution of 
contracts; and (iv) the company’s share of the amounts stated above of 
any association of persons of which the company is a member. The 
meaning in the said sub-section has been assigned to the word ‘turnover’ 
used in Section 113 and therefore the phrase ‘turnover from all sources’ 
in sub-section (1) is to be read in conjunction with such definition which 
is exhaustive in nature and nothing further can be added thereto, thus 
the argument of the appellants/petitioners’ that ‘turnover’ covers all 
sources under various heads of income is not tenable in law. 
7. 
 
In light of the above discussion, the aggregate of the declared 
turnover as defined in Section 80D of the Ordinance of 1979 from the 
sale of goods, rendering, giving or supplying of services or benefits or 
execution of contracts has to be taken into account for determining the 
minimum tax liability of 0.5% of the turnover. If no tax, for whatever 
reason, is payable/paid, then the amount worked out at the rate of 0.5% 
of the turnover will be the minimum tax payable. If the tax payable/paid 
is less than 0.5% of the turnover, then the minimum tax payable will be 
the difference/balance between the tax payable/paid and 0.5% of the 
turnover. A similar analysis will apply to Section 113 of the Ordinance of 
2001, where the aggregate of the taxpayer’s turnover from the sale of 
goods, rendering of services or giving of benefits including commissions 
and the execution of contracts has to be taken into account in order to 
determine the minimum liability of 0.5% of the turnover for each tax year 
(or 1% of the turnover for each tax year, depending on the tax year involved; as Section 113 was 
subsequently amended vide Finance Act, 2013 and the percentage of minimum liability 
prescribed therein was increased to 1%).  
8. 
 
We now move on to consider the argument of the 
appellants/petitioners that tax payable/paid upon income under the 
Presumptive Tax Regime is a final discharge of tax liability and thus such 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 19 :-
income is liable to be excluded from the aggregate turnover under 
Sections 80D and 113 of the Ordinance of 1979 and 2001 respectively 
(collectively referred to as the Ordinances). As mentioned in the earlier portion of 
this opinion, ‘turnover’ has been clearly and comprehensively defined 
in the explanations to Section 80D(2) and Section 113(3) ibid. It is well 
settled that a strict and literal approach is to be adopted while 
interpreting fiscal or taxing statutes, and that the Court cannot read into 
or impute something when the provisions of a taxing statute are clear. 
These principle(s) have been reiterated by this Court in a number of 
judgments reported as Pearl Continental Hotel and another Vs. 
Government of N.W.F.P. and others (PLD 2010 SC 1004), Star Textile 
Ltd. and 5 others Vs. Government of Sindh through Secretary Excise 
and Taxation Department, Sindh Secretariat, Karachi and 3 others 
(2002 SCMR 356), Aslam Industries Ltd., Khanpur Vs. Pakistan 
Edible Corporation of Pakistan and others (1993 SCMR 683), Messrs 
Mehran Associates Limited Vs. The Commissioner of Income-Tax, 
Karachi (1993 SCMR 274), A & B Food Industries Limited Vs. 
Commissioner of Income-Tax/Sales, Karachi (1992 SCMR 663), 
Collector of Customs (Preventative) and 2 others Vs. Muhammad 
Mahfooz (PLD 1991 SC 630) and Messrs Hirjina & Co. (Pakistan) Ltd., 
Karachi Vs. Commissioner of Sales Tax Central, Karachi (1971 PTD 
200). A five member bench of this Court in Hirjina & Co. (supra) while 
interpreting the definition of ‘Provincial Excise Duty’ held:- 
 
“Apart from this, we are unable to read the earlier 
definition in the manner suggested by the Department. It 
was said in the course of argument that notwithstanding 
the amendment it must be assumed that the previous 
definition of ‘sale price’ included Provincial Excise 
Duty. The previous definition however, does not 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 20 :-
expressly say so. We may here observe that 
interpreting the taxing statute the Courts must 
look to the words of the statute and interpret it in 
the light of what is clearly expressed. It cannot 
imply anything which is not expressed, it cannot 
import provisions in the statute so as to support 
assumed deficiency. On the other hand the fact that the 
Legislature made an express provision for including the 
excise duty indicates that the unamended definition of 
the ‘sale price’ did not include the provincial excise 
duty.” 
(Emphasis supplied) 
 
At the cost of repetition, Section 80D of the Ordinance of 1979 includes 
within its ambit receipts, exclusive of trade discount shown on invoices 
or bills, derived from the sale of goods or from rendering, giving or 
supplying services or benefits or from execution of contracts, whether or 
not such receipts fall under the Presumptive Tax Regime or Normal Tax 
Regime. In similar vein, Section 113 of the Ordinance of 2001 includes 
within its ambit receipts, exclusive of sales tax and Federal excise duty or 
any trade discounts shown on invoices or bills, derived from the sale of 
goods, rendering of services or giving of benefits including commissions, 
or from the execution of contracts, whether or not such receipts fall 
under the Presumptive Tax Regime or Normal Tax Regime. There is 
nothing in the wording of Sections 80D and 113 of the respective 
Ordinances to suggest that for the purposes of calculating the turnover 
for the said sections receipts of income subject to the Presumptive Tax 
Regime are excluded. Furthermore, Section 153(1)(c) of the Ordinance of 
2001 provides that receipts from the execution of contracts would be 
subject to presumptive tax which would be final, and at the same time 
Section 113(3)(c) of the said Ordinance clearly includes gross receipts 
from the execution of contracts within ‘turnover’ for the purposes of 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 21 :-
determination of minimum tax under Section 113. Thus it certainly 
cannot be said that receipts of income subject to presumptive tax would 
automatically fall outside the scope of Section 113 (for the tax years up to 2009, 
prior to re-insertion of Section 113 by the Finance Act, 2009). 
9. 
 
In furtherance of the above analysis, there was nothing to 
prevent the Legislature from expressly providing that such receipts (under 
the Presumptive Tax Regime) would be excluded while calculating the aggregate 
turnover under the said sections. This interpretation is augmented by 
the fact that the new Section 113 of the Ordinance of 2001, as re-
inserted by the Finance Act, 2009 (new Section 113)4, specifically excluded 
from its domain the amounts subjected to the Presumptive Tax Regime, 
which (section) reads as below:- 
 
“113. Minimum tax on the income of certain persons.- 
(1) This section shall apply to a resident company where, 
for any reason whatsoever allowed under this Ordinance, 
including any other law or for the time being in force– 
 
(a) loss for the year; 
(b) the setting off of a loss of an earlier year; 
(c) exemption from tax; 
(d) the application of credits or rebates; or 
(e) the claiming of allowances or deductions (including 
depreciation and amortization deductions) no tax is 
payable or paid by the person for a tax year or the tax 
payable or paid by the person for a tax year is less 
than one-half per cent of the amount representing the 
person’s turnover from all sources for that year: 
 
Provided 
that…………………………………………… 
 
(2) Where this section applies: 
                                                
4 The new Section 113 reproduced in this opinion is as it was originally re-inserted by the Finance Act, 
2009. 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 22 :-
 
(a)   …………………………………………………………… 
 
(b) 
…………………………………………………………… 
 
(c) 
…………………………………………………………… 
 
Provided that…………………………………………… 
 
(3) “turnover” means,- 
 
(a) the gross receipts, exclusive of Sales Tax and 
Federal Excise duty or any trade discounts shown 
on invoices, or bills, derived from the sale of goods, 
and also excluding any amount taken as 
deemed income and is assessed as final 
discharge of the tax liability for which tax is 
already paid or payable; 
 
(b) the gross fees for the rendering of services for giving 
benefits including commissions; except covered by 
final discharge of tax liability for which tax is 
separately paid or payable; 
 
(c) the gross receipts from the execution of contracts; 
except covered by final discharge of tax 
liability for which tax is separately paid or 
payable; and 
 
(d) the company’s share of the amounts stated above of 
any association of persons of which the company is 
a member.” 
(Emphasis supplied) 
 
The underlined portions in the new Section 113(3) show the additions 
made to the said sub-section specifically excluding from its purview the 
amounts treated as deemed income and assessed as final discharge of 
tax liability for which tax is paid/payable, i.e. those falling under the 
Presumptive Tax Regime. These additional phrases inserted into the new 
Section 113 (underlined above) are missing from the earlier Sections 80D and 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 23 :-
113 of the respective Ordinances which patently suggests that the 
minimum tax payable under Section 80D is leviable on the aggregate of 
declared turnover from all sources including receipts covered by Sections 
80C and 80CC of the Ordinance of 1979, and that the minimum tax 
payable under Section 113 is leviable on the aggregate turnover from all 
sources including receipts and tax under the Presumptive Tax Regime of 
the Ordinance of 2001. The above analysis also draws support from the 
insertion of the explanation to the new Section 113(1) of the Ordinance of 
2001 by the Finance Act, 2012 which reads as follows:- 
 
“Explanation.- For the purpose of this sub-section, the 
expression “tax payable or paid” does not include tax 
already paid or payable in respect of deemed income 
which is assessed as final discharge of the tax liability 
under section 169 or under any other provision of this 
Ordinance.” 
 
The absence of this explanation from the old Section 113 (prior to its omission 
by the Finance Act, 2008) clearly suggests that the Legislature did not intend 
that tax already paid/payable in respect of deemed income which was 
assessed as final discharge of the tax liability under section 169 or under 
any other provision of the Ordinance of 2001 would be excluded from the 
purview of ‘tax payable or paid’, because the Legislature did not expressly 
provide so and as mentioned above, fiscal statutes are generally to be 
interpreted strictly, without imputing anything that is not manifest from 
the express wording of such statute. 
Thus in light of the ratio decidendi of Hirjina & Co. (supra) it is clear 
that the exclusion of amounts treated as deemed income and assessed as 
or covered by final discharge of tax liability for which tax is separately 
paid/payable from the term ‘turnover’ cannot be implied in the 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 24 :-
provisions of Sections 80D and 113 of the respective Ordinances, as the 
same has not been so expressed. The appellants/petitioners’ argument 
that failure to exclude amounts which are covered by final discharge of 
tax liability from the ‘turnover’ results in numerous taxpayers essentially 
crossing the threshold provided in the said sections thereby rendering 
them not liable to payment of minimum tax as envisaged by the said 
sections, and thus depriving the appellants/petitioners of well-deserved 
revenue, is not a justification to read into the provisions of Sections 80D 
and 113 something which is not there “so as to support assumed deficiency”5, 
as there can be no equitable construction of taxing statutes.6 
10. 
 
With regard to the appellants/petitioners’ reference to the 
statement under Section 143B of the Ordinance of 1979, suffice it to say 
that mere filing of a statement under the said section (as opposed to a return 
under Section 55 which is for the Normal Tax Regime) for income falling under the 
Presumptive Tax Regime (i.e. Sections 80C, 80CC etc.) is not a reason to bring 
them out of the definition of ‘turnover’ when the law, i.e. the explanation 
to Section 80D(2), expressly provides otherwise. The same applies to the 
corresponding provisions of the Ordinance of 2001, in that mere filing of 
a statement under Section 115(4) of the Ordinance of 2001, which (section) 
is pari materia to Section 143B of the Ordinance of 1979, does not mean 
that the income contained in such statement would automatically fall 
outside the scope of ‘turnover’ provided by Section 113. If such income 
falling under the Presumptive Tax Regimes of both the Ordinances was to 
be excluded from the ambit of ‘turnover’ as provided in Sections 80D and 
113 of the respective Ordinances, the Legislature would have explicitly 
mentioned it, as it had done by excluding amounts/receipts which are 
                                                
5 Hirjina & Co. (supra) and Bindra (supra note 2).  
6 Understanding Statutes (2008 Ed.) by S. M. Zafar; see also the case of Star Textile Ltd. And 5 others Vs. 
Government of Sindh through Secretary Excise and Taxation Department, Sindh Secretariat, Karachi and 3 
others (2002 SCMR 356). 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 25 :-
final discharge of tax liability in the new Section 113 re-inserted into the 
Ordinance of 2001 by the Finance Act, 2009.  
11. 
 
The appellants/petitioners have relied upon Section 168(3) of 
the Ordinance of 2001 to contend that income subject to the Presumptive 
Tax Regime falls outside the scope of Section 113 of the said Ordinance. 
Section 168(3) opens with the phrase “no tax credit shall be allowed for any tax 
collected or deducted that is a final tax…”; suffice it to say that tax credit has 
no role whatsoever to play in determining the minimum tax liability with 
respect to the term ‘turnover’ as defined in Section 113 of the Ordinance 
of 2001. We fail to understand how Section 168(3) supra can be 
construed to mean that the receipts of income falling under the 
Presumptive Tax Regime are to be excluded from the purview of 
‘turnover’ for the purposes of determination of minimum tax under 
Section 113.  
12. 
 
In light of the foregoing, we are of the view that given the 
definition of ‘turnover’ provided in Sections 80D and 113 of the 
Ordinances, the minimum tax payable is leviable on the aggregate of 
turnover from all sources including receipts covered by Sections 80C and 
80CC of the Ordinance of 1979, and by the Presumptive Tax Regime 
under the Ordinance of 2001, respectively. We do not find any infirmity 
in the impugned judgments relating to this issue calling for interference 
by this Court, and therefore, these appeals and petitions are accordingly 
dismissed.  
13. 
 
Now adverting to question No.(iii), the relevant provisions 
(parts) of Sections 50(4) and 80C of the Ordinance of 1979 read as 
follows:- 
 
“50. Deduction of tax at source.- (4) Notwithstanding 
anything contained in this Ordinance,- 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 26 :-
 
(a)  any person responsible for making any payment in 
full or in part (including a payment by way of an 
advance) to any person, being resident, (hereinafter 
referred to respectively as "payer" and "recipient"), 
on account of the supply of goods or for service 
rendered to, or the execution of a contract with 
the Government, or a local authority, or a company 
or a registered firm, or any foreign contractor or 
consultant or consortium shall, deduct advance tax, 
at the time of making such payment, at the rate 
specified in the First Schedule............ 
 
80C. 
Tax on income of certain contractors and 
importers.- (1) Notwithstanding anything contained in 
this Ordinance or any other law for the time being in 
force, where any amount referred to in sub-section (2) is 
received by or accrues or arises or is deemed to accrue 
or arise to any person, the whole of such amount shall be 
deemed to be income of the said person and tax thereon 
shall be charged at the rates specified in the First 
Schedule. 
 
(2) The amount referred to in sub-section (1) shall be the 
following namely:- 
 
 
(a)  Where the person is a resident,- 
 
(i)  the amount representing payments on which tax 
is deductible under sub-section (4) of section 50, 
other than payments on account of services 
rendered;” 
(Emphasis supplied) 
 
A plain reading of Section 50(4)(a) of the Ordinance of 1979 clearly 
provides for deduction of tax at source in three situations: (i) supply of 
goods; (ii) for service rendered; and (iii) execution of a contract. 
Whereas Section 80C(2)(a)(i) provides that the income of a person for the 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 27 :-
purposes of tax under the said section, shall include payments on which 
tax is deductible under Section 50(4) excluding payments on account of 
services rendered. Logic suggests that all services rendered would 
necessarily be pursuant to execution of a contract, i.e. as long as there is 
a meeting of the minds or consensus ad idem. Thus to say (as is the 
appellants’ stance) that though services are being rendered, since it is 
pursuant to execution of a contract, it would not fall within the exception 
contained in Section 80C(2)(a)(i) and instead the income derived from 
such execution of contract would be liable to be charged with 
presumptive tax under Section 80C would, in our opinion, render the 
exception in Section 80C(2)(a)(i) completely superfluous and redundant. 
Such intention cannot be attributed to the Legislature and neither can 
we, while following the salutary and well-established principles of 
statutory interpretation, construe the said section in such a way. In fact, 
the very selection of words, i.e. ‘supply of goods’, ‘service rendered’ and 
‘execution of contract’ suggests that the wide phraseology of ‘execution of 
contract’ pertains to residual contracts, other than those (contracts) 
involving 
supply 
of 
goods 
and/or 
rendering 
of 
services. 
This 
interpretation is strengthened by clause (i) of Section E of Part I of the 
First Schedule to the Ordinance of 1979 which reads follows: 
 
“E.  
Rate for collection of income tax under sub-section 
(4) of section 50,-  
 
(i)  
Where the payment is made to a resident assessee 
holding a National Tax Number, on account of- 
 
(a)  
execution of contracts, other than those 
mentioned in sub-clauses (b), (c) and (d) …  
 
 
(i) 
where the value of the contract  
five per cent of  
 
 
Does not exceed thirty million 
such income. 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 28 :-
 
 
rupees, 
 
 
(ii)  
Where the value of contract  
six per cent of 
 
 
 
exceeds thirty million rupees,  
such income. 
 
  
 
(b)  
supply of rice, cotton,   
 
one and one- 
cotton seed or edible oils;  
 
half per 
 
 
 
 
 
 
 
cent of the 
 
 
 
 
 
 
 
amount of 
  
 
 
 
 
 
 
 
payment. 
  
  
 
(c)  
supply of goods other than  
 
three and one 
  
 
 
those referred to in sub-  
 
half per cent of 
 
 
 
paragraph (b); and   
 
the amount of 
 
 
 
 
 
 
 
 
payment. 
 
(d)  
services rendered.   
 
five per cent of 
 
 
 
 
 
the amount of  
 
 
 
 
 
 
payment.”  
(Emphasis supplied) 
 
We would like to point out here that a schedule to a statute can be used 
as an intrinsic aid to interpret its (statute’s) provisions, which (schedule) is as 
much a part of the statute, and is as much an enactment as any other 
part.7 Thus the above extract of the said schedule also indicates that 
services rendered necessarily flow from execution of a contract, but 
execution of a contract would not necessarily result in rendering of 
services. In other words, where services are being rendered, prior 
execution of a contract would not per se attract the presumptive tax 
under Section 80C, rather it would be excluded by virtue of the exception 
in Section 80C(2)(a)(i). Thus there can be no question of taxing the same 
under the Presumptive Tax Regime. Hence, we are inclined to answer 
question No.(iii) in the negative, thereby affirming the view point of the 
learned High Court in the impugned judgments in this regard. 
                                                
7 Zafar (supra note 6). 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 29 :-
14. 
 
Finally, with respect to question No.(iv), in which the issue 
relates to the meaning and connotation of the word ‘supply’, and whether 
or not it encompasses on-the-spot cash purchases. The learned High 
Court in the impugned judgments in this regard has held that ‘supply of 
goods’ as used in the said Ordinance does not include on-the-spot cash 
purchases which fall within ‘sale’ as opposed to ‘supply’, the latter being 
associated with a continuing relationship existing over a certain period of 
time. In order to resolve the fourth proposition, the term ‘supply of goods’ 
as provided for in Section 50(4)(a) needs elucidation. Since the said term 
has not been specifically defined in the Ordinance of 1979, as per the 
settled canons of statutory interpretation, the ordinary and natural 
meaning of the phrase needs to be examined. However, ‘supply of goods’ 
also qualifies as a technical term as it is part of a statute falling within 
the special technical subject of taxation which is associated with 
business, economics and accounts, therefore its contextual parlance and 
phraseology needs to be examined. Before embarking upon such 
examination, we would like to expound certain rules of statutory 
interpretation in this regard. First, where an enactment uses a term 
which has both an ordinary and a technical meaning, the question as to 
which meaning the term is intended to have is determined by the 
context. If the context is technical, the presumption is that the technical 
meaning of the term is intended to be used; otherwise the ordinary 
meaning is taken as meant.8 Secondly, words used in a statute relating 
to a particular trade, business or transaction are to be construed as 
having the meaning which everybody conversant with that trade, 
business or transaction knows and understands.9 This is particularly so 
in construing the meaning of words in taxing statutes, as has been held 
                                                
8 Statutory Interpretation (4th Ed.) by F. Bennion. 
9 Messrs Asbestos Cement Industries Ltd Vs. Lahore Municipal Corporation and others (1994 SCMR 262). 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 30 :-
by the Indian Supreme Court,10 which (view) we have no hesitation in 
subscribing to:- 
 
“…in determining the meaning or connotation of words 
and expressions describing an article in a tariff 
Schedule, one principle which is fairly well-settled is that 
those words and expressions should be construed in the 
sense in which they are understood in the trade by the 
dealer and the consumer. The reason is that it is they 
who are concerned with it, and, it is the sense in which 
they understand it which constitutes the definitive index 
of the legislative intention.”  
 
In ordinary parlance, ‘supply’ means to “make (something needed) available to 
someone; provide with something needed; the act of supplying”,11 “to provide or furnish 
(something believed to be necessary)”12 and “to provide something that is wanted or 
needed, often in large quantities and over a long period of time”13, whereas ‘sale’ 
has been defined as “the act or practice of selling; the exchange of anything for a 
specified amount of money”14 and “the exchange of a commodity for money; the 
process of selling something”.15 Applying the contextual approach to meaning, 
‘supply’ is associated with a ‘supplier’ and ‘sale’ with ‘seller/vendor’. A 
supplier is one who supplies goods (or services) to another, the latter often 
is not the end-consumer. The consumer is directly associated with the 
seller/vendor who sells/vends goods to customers. In the supply chain, 
the supplier more often than not appears somewhere in the beginning or 
middle, whereas the seller/vendor is often the last person involved and is 
therefore at the end of the supply chain who obtains goods from a 
supplier and sells/vends them to consumers/clients. Every supply 
                                                
10 Indian Aluminium Cables Ltd. Vs. Union of India and others (AIR 1985 SC 1201). 
11 Concise Oxford English Dictionary (11th Ed.). 
12 Chambers 21st Century Dictionary (1999 Ed.). 
13 Cambridge Dictionaries Online. 
14 Chambers (supra note 12). 
15 Oxford (supra note 11). 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 31 :-
involves a sale (as there is provision of goods in exchange for consideration), however 
every 
sale 
does 
not 
necessarily 
involve 
supply, 
for 
e.g. 
a 
shopkeeper/seller/vendor selling goods at his shop to walk-in customers 
cannot be described as the equivalent of ‘supplying’. Thus in technical 
terms, ‘supply’ as understood in its proper milieu would not encompass 
on-the-spot cash purchases. 
15. 
 
The above interpretation is supported by the fact that the 
term ‘supply of goods’ was dispensed with in Section 153(1)(a) of the 
Ordinance of 2001 which is pari materia to Section 50(4) of the 
Ordinance of 1979, and instead the phrase ‘sale of goods’ was used. The 
relevant provisions of Section 153 read as follows:- 
 
“153. Payment for goods, services and contracts.– (1) 
Every prescribed person making a payment in full or 
part including a payment by way of advance to a 
resident person or – 
 
(a) for the sale of goods; 
(b) for the rendering of or providing of services; 
(c) on the execution of a contract, including contract 
signed by a sportsperson but not including a 
contract for the sale of goods or the rendering of or 
providing services, 
 
shall, at the time of making the payment, deduct tax from 
the gross amount payable (including sales tax, if any) at 
the rate specified in Division III of Part III of the First 
Schedule. 
(Emphasis added) 
 
The departure in the wording of Section 153(1) from that of Section 50(4) 
is significant, as established above, the words ‘sale’ and ‘supply’ are 
neither synonymous nor interchangeable. This divergence speaks 
volumes to the intent of the Legislature, which was that sales by 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 32 :-
sellers/vendors to their walk-in customers or on-the-spot cash 
purchases were not to be included within the purview of ‘supply of 
goods’, thereby subjecting such walk-in/on-the-spot cash purchases to 
the withholding provisions. This intention is also manifest from a bare 
reading of Section 50(4)(a) of the Ordinance of 1979 (reproduced in the earlier 
part of this opinion) which can in no way be said to be designed to levy such a 
tax on consumers for payments made on the spot or window purchases. 
However, an explanation was inserted into Section 50(4)(a) of the 
Ordinance of 1979 through the Finance Act, 1998 which reads as 
under:- 
 
“Explanation.- For the purposes of clause (a) the 
expression “supply of goods” includes both cash and 
credit purchases of goods by the payer, whether under a 
contract or not, on credit or in cash;” 
 
The Peshawar High Court in Al-Khair Gadoon Ltd Vs. Commissioner of 
Income-Tax [2004 PTD 2467] and the High Court of Sindh in 
Commissioner of Income-Tax, Karachi Vs. Messrs Nazir Ahmed and 
Sons (Pvt.) Ltd., Karachi (2004 PTD 921) have interpreted the 
explanation to Section 50(4)(a) to determine whether or not it (explanation) 
would have retrospective effect. However, the controversy involved in 
those cases was not related to sales to walk-in customers or on-the-spot 
cash purchases, nevertheless their ratio may effectively mean that any 
purchase, be it on-the-spot, would fall within the purview of ‘supply of 
goods’. As established above, ‘supply’ necessarily includes a purchase, 
and in our opinion, the said explanation was included to clarify that 
such purchase would not only be those made in cash, but also by way of 
credit payment. As highlighted in the earlier part of this opinion, an 
explanation cannot be read so as to extend the scope of the provision to 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 33 :-
which it is appended, thus we are not inclined to extend ‘supply of goods’ 
in Section 50(4) to include ‘sale of goods’ by sellers/vendors at their 
retail outlets to walk-in customers merely by virtue of the use of the 
word ‘purchase’ in the said explanation. In this respect, we find it 
expedient to reproduce an extract from a judgment of the Lahore High 
Court reported as Commissioner of Income Tax/Wealth Tax Vs. 
Messrs Ellcot Spinning Mills Ltd. (2008 PTD 1401) which reads as 
follows:- 
 
“For all practical purpose it is the definition of ‘supply 
of goods’ which would decide or clinch the issue. The 
term supply has not been defined in Income Tax 
Ordinance at all. However, it has already been 
considered as a part of sale but every sale is not a 
supply. Supply presupposes the existence of a regular 
arrangement based upon some permanence involving 
order identification and determination of the items, its 
quality and the considerations. It can obviously be cash 
as well as a credit and this did not require any further 
explanation as has been added in section 50(4) above. 
The fear of the respondents and the claim of the 
department that the explanation after proviso in 
subsection (a) of section 50(4) which defines supply of 
goods has not brought anything new, is baseless. The 
explanation in fact has confused the situation as it says 
that the purchase of goods by the payer whether under a 
contract or not, on credit or in cash shall be a part of the 
supply. However, the same does not add anything new 
except that it can be either under a contract or not under 
a contract. The draftsman is totally ignorant that once a 
transaction is done the existence of a contract is obvious. 
However, the term supply even after the above 
explanation would not cover a window purchase of 
casual sale purchase transactions like of daily goods in 
open market.” 
Civil Appeals No.1084 to 1098/2008 etc. 
-: 34 :-
The judgment reported as Messrs Bilz (Pvt.) Ltd Vs. Deputy 
Commissioner of Income-Tax, Multan and another (2002 PTD 1) 
relied upon by the appellants has no relevance to the precise question of 
law at hand, thus needs no further discussion.  
In light of the above, question No.(iv) is answered in the negative, 
in that, on-the-spot cash purchases do not fall within the purview of 
‘supply of goods’ as envisaged by Section 50(4)(a) of the Ordinance of 
1979. In light of the above discussion, the appeals of the department in 
this regard are dismissed and the impugned judgment(s) of the learned 
High Court are sustained. 
16. 
 
To recapitulate, in light of the above, all the appeals (excluding 
Civil Appeal No.310/2012) and petitions are dismissed. As far as Civil Appeal 
No.310/2012 is concerned, the same involves the question regarding 
lease and buyback, and since the related matters were dismissed as 
withdrawn by the department vide order dated 27.1.2016, therefore we 
have refrained from commenting on the merits of the said case which is 
accordingly dismissed. Before valediction, we would like to express our 
gratitude towards the invaluable assistance rendered by the learned 
amicus curiae, Dr. Ikramul Haq. 
 
 
 
JUDGE 
 
 
 
 
JUDGE 
 
 
 
 
JUDGE 
Announced in open Court 
on 5.4.2016 at Islamabad 
Approved For Reporting 
Ghulam Raza/*