The Federal Constitutional Court (FCC) on Tuesday upheld Section 4B of the super tax law, declaring it valid and dismissing objections regarding the maintainability of the case.FCC Chief Justice Aminuddin Khan read out the short order in the petitions filed against the super tax, ruling that Section 4B of the tax law was constitutionally sound.
The court rejected objections raised on the maintainability of the case, observing that Parliament holds the constitutional authority to impose tax on income.
Earlier in the day, the Federal Constitutional Court had completed hearings in the case related to the super tax and reserved its verdict.
A three-member bench headed by Chief Justice Aminuddin Khan heard the case, during which counsel for various companies, Makhdoom Ali Khan, concluded his rebuttal arguments.
Following the hearing, the chief justice had said the court would attempt to announce a short order on the same day, adding that if this was not possible, the verdict would be issued on Wednesday.
During the previous day’s proceedings, a list of 150 petitioners who had challenged the super tax before different high courts was presented before the court.
Federal Board of Revenue (FBR) counsel Asma Hamid argued that once a high court declares provisions of a law to be valid, the same law cannot be challenged before another high court.
She informed the court that writ petitions were still being filed by entities, including Fauji Fertilizer, and objections had also been raised over the petitioners’ failure to meet legal requirements.
The FBR counsel maintained that the legislative process does not require taxpayers to be heard before the imposition of a tax, despite repeated reliance by petitioners on precedents from the US Supreme Court.
She further submitted that the Supreme Court of Pakistan had, in an earlier judgment, upheld the retrospective application of tax.
Asma Hamid told the court that the super tax had been fixed at 10 per cent, clearly provided for in the law, and was recoverable.
During the hearing, Justice Hassan Azhar Rizvi questioned whether individuals engaged in share trading and even banks earning interest would also be liable to pay the tax, remarking that investment should ideally be made from one’s own funds.
In response, the FBR lawyer said the matter was explicitly covered under the Eighth Schedule of the tax ordinance, which had not been challenged by any party.
