PESHAWAR, April 28: The counsel of Federal Interior Minister Aftab Ahmad Sherpao contended before the Peshawar High Court on Thursday that the foreign currency account of Mr Sherpao in Switzerland had been exempted from wealth tax. The minister had challenged, through a writ petition, the imposition of wealth tax of about Rs7.2 million on his foreign currency account of 500,000 pounds sterling. The high court admitted the plea for hearing about three years ago.

A two-member bench, comprising Justice Shahjehan Khan Yousafzai and Justice Saleem Khan, took up the petition on Thursday. However, due to lack of time, the court adjourned the hearing and decided to hold hearing on a next date to be fixed later on.

A day earlier, the high court has stayed the recovery of customs duty of Rs10 million imposed on Mr Aftab Sherpao for importing a Mercedes car in 1996 when he was the chief minister of the NWFP.

Counsel Abdur Rauf Rohaila argued that the income tax assessment officer had deleted that account while assessing income tax of the petitioner, but while assessing his wealth tax, the same account was included in the wealth of the petitioner. The commissioner income tax had deleted that account from the wealth tax assessment, but the appellate tribunal again imposed the said wealth tax on an appeal filed by the income tax department, he added.

Mr Rohaila argued that the tribunal had not touched the points regarding the exemption of the foreign currency account from the wealth tax. He suggested that the case could be remanded back to the tribunal for addressing the points.

He argued that under Section 6 of the Economic Reforms Act (Act NO XII) of 1992m, the foreign currency accounts enjoyed complete exemption from all sorts of taxes.

Mr Rohaila argued that the wealth tax assessment officer was not justified to assess the foreign currency account of the appellant. He contended that the appellant was not bound under the law to declare the said assets.

Advocate Eid Muhammad Khattak, appearing for the income tax department, opposed his suggestion and argued that the tribunal had addressed all the points raised by the department in the appeal filed against the order of the commissioner income tax.

He argued that under the wealth tax law, the net wealth included all the assets, which were located not only in Pakistan but also abroad.

The money was deposited in Citi Bank, Rawalpindi until June 30, 1996, when Mr Sherpao was the chief minister of the NWFP. Before the dismissal of his government by the NWFP governor, he transferred the money to Switzerland.

The said wealth tax was imposed by the assistant commissioner income tax on Feb 23, 1999, after Mr Sherpao conceded in a press conference on Dec 25, 1998, that he possessed a foreign currency account in Switzerland.

The government had claimed that the account was first maintained in the country and later the foreign currency was transferred abroad in 1996 through the State Bank of Pakistan Regulations. The wealth tax assessment officer imposed the tax for the years 1996-97 and 1997-98, stating that the foreign currency accounts were not exempted from wealth tax.