On Monday, the Supreme Court questioned the government’s rationale behind the profit tax whether ordinary price increases could be treated as extraordinary profits.
A constitutional bench of five members, led by Justice Aminuddin Khan, heard arguments from the petries lawyer Ahmed Jamal Sukhera.
Justice Hassan Azhar Rizvi asked, “If gasoline rises from RS150 to RS200, would it be windfall card? If sugar goes from RS160 to RS170 would it still count?”
Sukhera claimed that the tax unfairly targeted a few sectors. “If three or four people benefit, while the majority incurs losses, how can tax be imposed?” He said and noted contradictions in government policy, and that the measure was driven solely by “the surplus policy.”
Justice Muhammad Ali Mazhar reminded him that constitutional protection measures have boundaries: “Article 10-A is about fair trial-what has it to do with taxation?”
Sukhera insisted that taxation should involve public participation and argued that the tax violated the entrance 47 of the Constitution, which governs parliamentary tax powers.
Read: SC hears Super Tax Challenge, FBR defends parliament’s power
Justice Mazhar replied that although some municipal taxes include such provisions, “The Income Tax Act has no clause of public consultation.”
During the procedure, Sukhera noted, “Simplicity can also be a captivating charm,” that makes Justice Mazhar quip, “Maybe this is your kind of simplicity?” – Drawing of laughter.
By referring to his age, Sukhera said, “I’m old now; my kids are barmyers and they sit here.”
Justice Jamal Khan Mandokhail asked his age, and after hearing “57,” you noticed, “Are you considering 57 old?” – Contributing to further laughter.
Sukhera concluded, “One day none of us will be here, but this judicial decision will remain.”
The bench noted that autonomous government institutions, including Pia and steel mills, were running at a loss, but still included in the super tax list.
Read more: Super tax under control in the Supreme Court
Justice Mandokhail noted that it is the government’s responsibility, not parliamentary. The consultation was postponed until Tuesday.
Super tax
The super tax is an additional tax on high -performance individuals, businesses and industries that are largely aimed at large companies. In the federal budget 2022-23, the government introduced up to 10% super tax on larger sectors, including cement, steel, sugar, oil and gas, fertilizers, banks and textiles, citing the need to raise extra revenue for financial stabilization.
Petitions that challenge the tax are filed before the supreme court of individuals and organizations. At the previous hearing, the bench was assessed by FBR that no one had contested Lahore High Court’s (LHC) judgment, maintaining the legality of the super tax imposed under section 4C of the income tax word, 2001, while reducing its rate from 10% to 4% for 16 sectors, including banking and offering partial relief.
Earlier this year, the Apex Court asked whether the center could distribute super -tax revenue to provinces, noting that although the tax has been extended since 2016, no funds were used for the specified purpose.
ALSO READ: Supreme Court CB questions the distribution of super -tax funds to provinces
During a recent hearing, the bench raised concerns about the effect of the super tax on ordinary citizens, Justice Mazhar observed that whether it was a cement bag or a liquid natural gas dispatch, “the whole burden comes down to the ordinary man”.
“The business will flourish if we make things easier for people,” he added.
“Don’t discourage taxpayers – when you do, people end up leaving the country,” Justice Mandokhail had warned in a similar way.
Hamid had then clarified that only 15 sectors of income that exceeded RS300 million were responsible for the super tax and that no company had required an inability to pay. The bench pressed FBR to explain why distinctions were created between the taxpayers, which emphasized that budgetary measures should not move the burden back to the public.
