ISLAMABAD: The Federal Constitutional Court (FCC) has issued a detailed judgment upholding the validity of Super Tax imposed under Sections 4B and 4C of the Income Tax Ordinance, 2001, reinforcing Parliament’s authority over fiscal policy.
A three-member bench headed by Amin-ud-Din Khan, along with Syed Hasan Azhar Rizvi and Arshad Hussain Shah, released the detailed verdict following its earlier short order issued on January 27, 2026. Justice Rizvi also authored a separate additional note.
The ruling emphasized limits on judicial review and declared that High Courts cannot “read down” tax laws, stating such actions effectively rewrite Parliament’s fiscal policy. The court termed this practice unconstitutional and reaffirmed the doctrine of separation of powers.
The case stemmed from challenges filed by Commissioners of Inland Revenue from multiple cities against earlier rulings of various High Courts that had struck down or modified the Super Tax provisions introduced through the Finance Act 2022-23. In total, 1,993 cases were filed against Section 4C, along with 284 petitions before the FCC.
Setting aside the High Courts’ judgments, the FCC held that courts do not have the authority to alter tax slabs, rates, or thresholds. It ruled that such interventions amounted to judicial overreach and confirmed that appeals filed by the Secretary of the Federal Board of Revenue and Inland Revenue officers were maintainable.
The court dismissed taxpayer appeals related to Section 4B and clarified that the provision applies from 2015, while Section 4C is applicable from 2022, aligning with their respective enactments.
Addressing key concerns, the FCC ruled that Section 4C does not constitute double taxation and does not apply retrospectively to past and closed transactions. It further noted that arguments based on equity, fairness, or rationality are not sufficient grounds for courts to invalidate tax laws.
The judgment upheld the legality of Super Tax, while allowing specific exemptions for Benevolent and Provident Funds, subject to submission of valid exemption certificates to tax authorities.
During the proceedings, the Federation of Pakistan and the FBR were represented by Asma Hamid as lead counsel, supported by prominent legal experts including Raza Rabbani, Syed Ashtar Ausaf Ali, and Shahnawaz Memon. Taxpayers were represented by senior counsels such as Makhdoom Ali Khan, Khalid Javed Khan, Firogh Naseem, Rashid Anwar, Salman Akram Raja, Shahzad Elahi, and Mehmood Mirza.
