n the wake of pronouncement on December 9, 2016 of five-member bench of Supreme Court (SC) that fresh proceedings before a new bench in Panama case against the Prime Minister would commence in January 2017, there was mood of jubilation in the camp of ruling party and atmosphere of gloom in the ranks and file of Tehreek-e-Insaf (PTI). The ninth hearings in the case proved unfruitful for all. The self-assumed claims of “victory” by PTI and Pakistan Muslim League-Nawaz [PML(N)] proved short lived. Both sides failed to realise that battles of words in media are different from actual case proceedings in courts where one has to establish one’s case relying on law and evidence. The dilettante approach by PTI in arguing the case and deliberate act of legal team of PML(N) to withhold the relevant documents left the five-member bench of SC with no choice but to adjourn the matter as decision on the basis of inconclusive evidence was not possible. A new bench will now be formed after winter vacations to hear the matter afresh.
On December 6, 2016, the five-member bench of Supreme Court asked three questions from the Prime Minister: (1) How did the children form the companies; (2) where did the money come from and how was it transferred; and (3) whether the speeches made were true or not?
After the arguments of counsel for Imran Khan (Petitioner) and that of Nawaz Sharif (Respondent), the SC observed that both the parties could not produce substantial evidence to prove their respective case and therefore they must consult their clients for the formation of commission. The PTI’s counsel requested the SC for a day to complete consultations. The SC adjourned the hearing for December 9, 2016. On the said date, PTI’s counsel said that they were not only opposed to formation of judicial commission but would also boycott its proceedings. Many termed this statement as shocking. The PML(N) called it “admission of defeat on the part of PTI” and alleged that as usual unfounded allegations were levelled against the third-time elected Premier by PTI.
Since the postponement of proceedings, the PML(N) leaders have been venomously attacking Imran Khan. In retaliation, PTI has decided to take the issue to people once again besides agitating it in the Parliament. Key leaders of PML(N) are admonishing Imran Khan for what they call showing “irresponsible attitude in politics”. Imran Khan is unmoved and adamant to keep on fighting what he called “mega corruption” of the Sharifs. The PML(N) claims that election petitions forwarded by the Speaker of National Assembly under Article 63(2) of the Constitution against Imran Khan and Jehangir Tareen are based on solid grounds and will succeed and those filed against Prime Minister would be rejected by the Election Commission of Pakistan (ECP) and SC in due course of time.
The confidence of key leaders of PML(N) regarding outcome of sub judice matters and aggressive media campaign by some zealous ministers, advisers of Prime Minister and others is not surprising as this is the known modus operandi of Sharifs while in power.
Through privilege and adjournment motions filed on December 14, 2016, PTI and PPP agitated the matter of speech by the Prime Minister at the floor of the House vis-à-vis contention by his counsel in Supreme Court that what was said there were just a “political statement”.
Disqualification of an elected member is a serious issue which should not be taken lightly. The resort to courts for disqualification of elected members should not be on disputed facts and contentious issues. The provisions for disqualification of elected members and due process for it are contained in the Constitutions and Representation of People Act, 1976 (ROPA). The standard of proof required for disqualification of an elected member is explained authoritatively by the Supreme Court in Muhammad Siddique Baloch v Jehangir Khan Tareen PLD 2016 Supreme Court 97 as under:
“The law regarding the quality of evidence necessary to prove an allegation of corrupt and illegal practices committed by a candidate during his election is by now well settled. “Corrupt practice” is defined in Section 78 of the ROPA while “Illegal practice” is defined in Section 83 of the said statute. The allegation in the present case would, prima facie, fall within the ambit of Section 83(1)(b) of the ROPA. The delinquent conduct under the said provision pertains to, inter alia, procuring the assistance of any person in the service of Pakistan to further or hinder the election of a candidate. The successful proof of the commission of the said wrong by a returned candidate not only annuls his election under Section 68(1)(d) as well as Section 70(b) of the ROPA but also disqualifies him from contesting an election for a period of five years under Section 99(1A)(l) of the ROPA and exposes him to criminal prosecution for an offence carrying punishment of six months imprisonment. In view of the severe consequences following the proof of corrupt and illegal practices in particular by a returned candidate, different pronouncements by this Court adopt a cautious stance towards a defending incumbent of elected office. The earliest case on the subject is Muhammad Saeed v. Election Petitions Tribunal, West Pakistan, etc (PLD 1957 SC 91) which holds that each ingredient of the misdemeanor of corrupt or illegal practices must be affirmatively proved by direct or circumstantial evidence. Circumstantial evidence is to be believed if all reasonable hypotheses which are consistent with the non-commission of corrupt or illegal practices have been excluded. The said rule has been reiterated with approval in Muhammad Yusuf v. S. M. Ayub (PLD 1973 SC 160) and in Muhammad Afzal v. Muhammad Altaf Hussain (1986 SCMR 1736)”.
According to PML(N), the petition filed by the PTI and documents filed with it and produced during the hearing do not establish “corrupt and illegal practices” committed by incumbent Prime Minister affirmatively through direct or circumstantial evidence. They allege that PTI has failed to produce any incontrovertible evidence to show that businesses established abroad and properties owned in London and elsewhere, through offshore and onshore companies, by the offspring of Prime Minister Nawaz Sharif, were directly or indirectly funded by tainted money. On the contrary, PTI leaders contend that the counsel for Prime Minister was unable to produce definitive money trail. He said in the court: “After the 1999 martial law, all the records of the Sharif Family companies were seized by the military authorities and Dubai banks do not maintain records beyond five years”. This was declared as “a dangerous line of arguments” by one learned Judge of the now dissolved bench.
Whatever the fate of the case in Supreme Court may be, three key questions-issue of dependency of Maryam Safdar, contradictory statements by Nawaz Sharif and family members and money trails from Dubai to Qatar and/or Saudi Arabia and then London-would continue to trouble, preoccupy, worry, bother and disturb the parties in the case, as well as the nation, in the months to come.
The standard of evidence for disqualification, as highlighted by Supreme Court in PLD 2016 Supreme Court 97, can be determined from the following facts:
1. Nawaz Sharif [NTN 0667649] filed wealth statements for tax year 2010, 2011 and 2012 as late as in March 2013 though automation system warned him about it when tax returns were filed. It is strange that this lapse was ignored both by Federal Board of Revenue (FBR) and ECP. Filing of wealth statements with tax returns was mandatory and since he did not comply with law, his tax returns were invalid in the eye of law. FBR did not take any action for late filing of wealth statements (an offence specified in Table annexed to section 182(1) of the Income Tax Ordinance, 2001). This fact escaped attention of ECP and now SC can take cognisance of it in the pending petition.
2. Nawaz Sharif was head of PML(N) and twice enjoyed the post of Prime Minister at the time of filing nomination papers in 2013, yet he ostensibly violated the command of law (Income Tax Ordinance, 2001). He thus violated Article 62/63 of the Constitution as explained by Supreme Court in PLD 2016 Supreme Court 97 as under:
The loss of qualification under Article 62(1)(f) of the Constitution has been visited with removal from elected office under the Constitution in a number of cases including Abdul Ghafoor Lehri v. Returning Officer PB-29 Naseerabad-II (2013 SCMR 1271), Allah Dino Khan Bhayo v. Election Commission of Pakistan (2013 SCMR 1655), Iqbal Ahmad Langrial v. Jamshed Alam (PLD 2013 SC 179) and Najeeb-ud-Din Owaisi v. Amir Yar Waran (PLD 2013 SC 482). Weighty reasons have been assigned for adopting and implementing the constitutional mandate as a bar on membership in Parliament. Firstly, the qualifications of a candidate set out in Article 62 of the Constitution are a sine-qua-non for eligibility to be elected as Member of Parliament. No time limit for ineligibility on this score is given in the Constitution. A person who is untruthful or dishonest or profligate has no place in discharging the noble task of law making and administering the affairs of State in government office. Such faults in character or disposition, if duly established, cannot be treated as transient for the purpose of reposing trust and faith of the electorate and the Constitution in the holder of an elected office under the Constitution. The trusteeship attendant upon the discharge of every public office under the Constitution, whether Legislative, Executive or Judicial is a universally recognised norm. However, our Constitution emphasises upon it expressly for an elected parliamentary office. The Constitutional norm must be respected and therefore implemented. The above noted precedents have applied a lifetime bar on a delinquent elected Member of Parliament. Therefore, the apprehension of the appellant, as expressed by his learned counsel about incurring the sanction under Article 63 of the Constitution is fully justified. Irrespective of the period of disability inflicted for violation of Article 62(1)(f) of the Constitution, the learned Tribunal should have examined the evidence in relation to the allegation of false declaration by the appellant in his nomination papers very carefully and judiciously before depriving him of eligibility to contest for elected office under the Constitution.
3. Sr. No 14 of the nomination form pertains to agricultural income tax and asks for last three years agricultural income and tax paid thereon and to attach copies of the agricultural income tax returns as well. The returns attached by Nawaz Sharif indicate that these were also filed just before the filing of nomination papers the details of which are as under:
===============================================================================
Assessment Due Date Under Date of Amount of tax -
Year Rule (5) of the filing of paid with the -
Punjab Agricultural Return return as required Delay in
Income Tax under Rule (4) Payment of
Rules 2001 of the Punjab Admitted Tax
Agricultural Liability as
Income Tax well as filing
Rules, 2001 of Return
===============================================================================
2012-13 30.09.2012 22.03.2013 1,195,497 6 Months
2011-12 30.09.2011 22.03.2013 715,250 18 Months
2010-11 30.09.2010 22.03.2013 734,000 30 Months
===============================================================================
Does the allegation or fact that after making belated payment though disqualification under Article 63(1)(o) for was avoided but paying tax of 3 years just 9 days before filing nomination papers prove that Nawaz Sharif is not trustworthy as PM being tax lax?
4. For Tax Year 2012, salary income was declared by Nawaz Sharif but name of the employer and the employer’s NTN were not mentioned. In the nomination papers, he mentioned his occupation as Politician and Agriculturist and not salaried person. In the return of income in the column of ‘Business Name’, name of Chaudhry Sugar Mills was shown. In Tax year 2012, against serial number 29 of the return “tax reductions/credits/averaging (including rebate on regular income certificates)”, he claimed tax credit of Rs 289,188 but no evidence was given. In the wealth statements filed for Tax Years 2011 & 2012, he did not show any bank account in UBL Bank, Lahore, Shahra-e-Quaid-e-Azam branch, but in the Income Tax Returns, showed Account No 1429 in the said bank branch for the purposes of claim of income tax refunds. This concealment of account attracts disqualification as elaborated by Supreme Court in PLD 2016 Supreme Court 97.
5. Nawaz Sharif, in his nomination papers filed on 31-03-2013 attached Wealth Reconciliation Statement for Tax Year 2011, which is reproduced below:
=============================================================================== PARTICULARS AMOUNT =============================================================================== Net Assets as on 30.06.2011 149,398,035 Net Assets as on 30.06.2010 63,737,827 Increase in Assets 85,660,208 ------------------------------------------------------------------------------- SOURCES ------------------------------------------------------------------------------- Income declared 10,200,000 Agricultural Income 5,075,000 Bank Profit 97,257 Gift from Son 129,836,905 Foreign currency translate/conversion effect 1,489,192 Total Sources 156,698,354 ------------------------------------------------------------------------------- LESS: EXPENDITURE ------------------------------------------------------------------------------- Personal Expenditure 19,878,706 Gifted to Daughter - Mrs Maryam Safdar 31,700,000 Gifted to Son - Mian Hussain Nawaz 19,459,440 ------------------------------------------------------------------------------- Total Expenditures 71,038,146 ------------------------------------------------------------------------------- Balance available for increase (156698354 - 75238146) 85,660,208 ===============================================================================
From the aforesaid chart it is evident that the accretion is on account of gift of Rs 129,836,905 from the son. This gift was taxable as per section 39(3) of the Income Tax Ordinance, 2001 which reads as under:
“Subject to sub-section (4), any amount received as a loan, advance, deposit for issuance of shares or gift by a person in a tax year from another person (not being a banking company or financial institution) otherwise than by a crossed cheque drawn on a bank or through a banking channel from a person holding a National Tax Number shall be treated as income chargeable to tax under the head “Income from Other Sources” for the tax year in which it was received”.
6. The plain reading of above provision of law shows that any amount claimed as gift should be received either through a cross cheque or through a banking channel from a person holding a National Tax Number. Admittedly, son living abroad was not NTN holder. This amount was to be offered as income even if received through banking channel, which Nawaz Sharif had failed to do. Nawaz Sharif thus avoided tax of over Rs 32 million on this amount with default surcharge of 12%. The same is the position for tax year 2012, 2014 and 2015 where tax is overdue on such gifts of Rs 266 million, Rs 239 million and Rs 215 million, respectively, received by remittance from a person not holding a National Tax Number.
Huzaima Bukhari and Dr Ikramul Haq, "Rulers on trial – I," Business Recorder. 2016-12-16.Keywords: Law and Humanities , Paper ruling , Constitutional mandate , Prime ministers , Supreme court , Panama leaks , Parliamentary practice , Nawaz Sharif , ROPA , PMLN , PTI , SCMR , PLD , ECP , NTN , FBR
