A constitutional bench of the Supreme Court questioned on Wartens Day whether the super tax could be imposed on the already taxable income.
A five-member bench, led by Justice Aminuddin Khan, heard a set of affairs that challenged the introduction of super tax by Pakistan Muslim League-Nawaz (PML-N) government in 2015.
“How can a super charge be imposed on a system that is already subject to taxation?” Justice asked Jamal Khan Mandokhail.
Service’s attorney Farogh Naseem assessed the court that once the income was assessed, a super tax or additional fee could apply. “For example, if an account is opened in January 2021 and closed on December 31, 2021, a tax is still introduced six months later, even though the taxpayer had already paid it.”
He added that the law made super tax useful on income, but did not describe it as an extra charge everywhere. “Section 4C of the Income Tax Regulation – the provision that introduced the super tax in 2022 – does not mention an additional tax, and a taxpayer may choose to pay under section 4 (General Income Tax) or Section 4C (Super Tax) in the Act,” he claimed.
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Justice Mandokhail further pressed: “Where does this opportunity come from?” Naseem replied that it was a general principle that a taxpayer could choose one of two identical provisions to pay taxes.
The judge compared the question with criminal law. “It’s like when two sections apply to a crime – the penalty is awarded under the section with the less punishment.”
“Exactly – the same principle also applies here. Double taxation cannot be imposed,” Naseem admitted.
Justice Mandokhail, who pointed to Naseem’s political background, asked, “You have been a member of parliament. Tell us, who is preparing this legislation?”
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“I didn’t work out section 4C,” Naseem said.
The bench also examined deductions from confidential foundations and noticed concern about their influence on ordinary citizens and recipients.
The hearing was postponed until Thursday, when Naseem was to continue its arguments.
The Supreme Court is struggling to end the case before October 7, when hearings on challenges to the 26th constitutional amendment are intended to begin. Justice Aminuddin Khan has quickly emphasized the urgent nature of packing arguments quickly.
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.
During a previous hearing, the bench was assessed by the Federal Board of Revenue (FBR) that no one had challenged Lahore High Court’s (LHC) judgment, as the legality of the super tax introduced under section 4C for the income tax, reducing its rate from 10% to 4% for 16 sectors, including banking and offering partial relief from pounders.
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.
FBR mounted a defense of parliament’s powers. Advisor Hafiz Ehsan Khokhar maintained that while section 14 of the Finance Act had seen its purpose changed, its substance remained intact.
He rejected allegations of legislative overreaction with reference to the 63-A case, but Justice Mandokhail pressed whether Parliament could constantly adopt a tax bill outside the annual budget cycle. The judges also marked contradictions in the Islamabad High Court decision, which was partly beaten down by the charges.
The bench in a later consultation then turned to confidential foundations where FBR adviser Asma Hameed claims that partial relief had already been delivered. Justice Hasan Azhar Rizvi warned that taxation of RS100 today could mean RS550 lost for retirees decades later. The judges also asked how the advance gas could be calculated when the profits were unknown.
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Earlier, on September 25, the Court expressed concern that the tax will ultimately burden ordinary citizens. “Whether it’s a cement bag or a LNG shipping, the whole burden comes down to the ordinary man,” observed Justice Muhammad Ali Mazhar.
The judges investigated a deduction for Provident Fund and asked if Widows were among the ultimate recipients. Advisor Asma Hameed claimed that section 4C and 9 of the regulation should be read together, but the bench pressed why taxpayers were treated differently.
Previously, the bench was investigating the government’s logic “Windfall Profits”. Justice Rizvi asked if routine price increases – gasoline rising from RS150 to RS200 or sugar with RS10 – could be treated as extraordinary profits.
Advisor Ahmed Jamal Sukhera said the tax targeted only a few sectors and violated constitutional protection measures. The judges also noted that loss of loss making such as Pia and Pakistan Steel Mills were inexplicably included in the super tax list.
Negotiations began on September 19, when broader questions about regulatory procedure dominated. Justice Mandokhail asked if parliamentarians really discussed taxes before they approved them. Advisor to taxpayers claimed that FBR’s role was only to charge taxes, not design policy that should ideally involve experts. Justice Rizvi questioned whether legislators simply rubber -moteled bills without considering their influence.
