IHC decides to establish special bench to hear NFC case

ISLAMABAD (Dunya News) – Islamabad High Court (IHC) on Tuesday has decided to establish a special bench for the hearing of National Finance Commission (NFC) formation case. 

According to details, Justice Mian Gull Hassan has suggested to constitute a two-member bench for further case proceedings. The file of the matter has been forwarded to Chief Justice of Pakistan (CJP) Gulzar Ahmed for approval.

President constitutes 10th NFC

On May 12, 2020, President Dr Arif Alvi had constituted the 10th NFC, with effect from April 23, 2020, to work out a resource distribution mechanism between the federation and the provinces.

According to a notification issued by the NFC Secretariat, Finance Division, on Tuesday, the president had authorized Advisor to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh, in the absence of Federal Minister for Finance, to chair the meetings of the commission, which was constituted under Article 160(1) of the Constitution of the Islamic Republic of Pakistan.

The 10-member commission comprises federal finance secretary as the official expert, four provincial finance ministers, and four technical members of the provinces, including Tariq Bajwa, Dr. Asad Sayeed, Musharraf Rasool Cyan, and Javed Jabbar.

According to the terms of reference of the commission, it would devise a formula for distribution between the federation and the provinces of the net proceeds of different taxes, including taxes on income, sales and purchase of goods and export duties.

PML-N challenges formation of commission in IHC

On May 19, 2020, opposition party Pakistan Muslim League Nawaz (PML-N) leader Khurram Dastgir had challenged the formation of the commission in the IHC.

The petition named Secretary to the President, Secretary Cabinet, Finance Division, Secretary Law and Finance Advisor Abdul Hafeez Shaikh as parties in the matter.

The plea stated that the responsibility of equitable distribution of financial resources between the federation and provinces lies with the NFC. According to the Finance Division notification, the President of Pakistan constituted an 11-member commission on April 23.

The claimant said that it is necessary to consult with the governors before including a finance adviser and a finance secretary but the notification did not mention any consultation with any provincial governor. The members cannot be appointed in violation of the procedure laid down in Article 160 of the Constitution, the petition added.

The finance adviser was given the authority to chair meetings in the absence of the finance minister but according to the law, NFC’s actions would be unconstitutional and without effect in this situation.

IHC seeks Federal Govt’s reply in NFC formation case

IHC had sought response from the federal government on a petition filed by Pakistan Muslim League-Nawaz (PML-N) against the formation of the 10th NFC.

The court held that in light of the facts, if the application gets rejected, the applicant would be slapped with an exemplary fine.

Mohsin Shah Nawaz Ranjha, counsel for PML-N leader Khurram Dastgir, said that Sindh Chief Minister had also raised objections on the formation of NFC.