In a decisive ruling, the Sindh High Court (SHC) has firmly upheld the legality of the contentious Windfall Income Tax, rejecting pleas for interim relief and clearing the path for its full implementation. A division bench of the SHC dismissed petitions that challenged the constitutionality of Section 99D of the Income Tax Ordinance 2001, the legal foundation of the tax, as well as SRO 1588(I)/2023, the notification issued to enforce it.
The court unequivocally stated that the petitions, alongside all associated pending applications, were dismissed, with detailed reasons to follow. This ruling effectively reinforces the government’s ability to levy the Windfall Income Tax, a measure that has drawn considerable criticism and resistance from various sectors of the business community and concerned stakeholders since its inception.
During the court proceedings, the petitioners’ legal representatives made a last-ditch effort, orally requesting a one-month suspension of the court’s order. Counsel for the petitioners argued that interim relief had been in place since 2023, referencing a previous interim order from December 7, 2023, and related cases. These earlier interim orders had temporarily halted the implementation of SRO 1588(I)/2023, providing a brief reprieve from the Windfall Tax.
However, the SHC bench firmly rejected this oral motion. The court reasoned that granting such a suspension would essentially reinstate the previously overturned interim suspension, directly contradicting the court’s present judgment. Crucially, the SHC underscored its reliance on numerous judgments from the Supreme Court, which have consistently cautioned against the granting of interim orders that effectively suspend the operation of laws, particularly in matters concerning revenue collection. The bench specifically referenced established legal precedents, including landmark cases such as Aitzaz Ahsan, Aijaz Jatoi, and Dunlop, as well as a recent Supreme Court verdict in the Pakistan Oilfields case. These rulings collectively affirm the principle that interim relief should not be employed to negate or nullify statutory provisions enacted by the legislature.
Drawing on these robust Supreme Court precedents, the SHC concluded that acceding to the petitioners’ request for suspension would directly contravene the apex court’s explicit directives. Consequently, the SHC refused to extend any suspension period, thereby empowering the government to proceed unhindered with the enforcement and collection of the Windfall Income Tax.
This judgment marks a pivotal moment in Pakistan’s fiscal policy landscape. Businesses impacted by the Windfall Tax now face significantly curtailed legal options following the SHC’s decisive dismissal. The ruling not only validates the government’s taxation measure but also reinforces the judiciary’s firm stance on upholding fiscal regulations. Furthermore, it signals a judicial reluctance to allow interim measures to unduly impede the implementation of taxation laws, particularly those designed to bolster national revenue.