ISLAMABAD: The Federal Constitutional Court (FCC) on Monday adjourned proceedings in the high-profile super tax case until Tuesday (today) after being informed that arguments by more than 100 lawyers out of a total of 150 had already been concluded.
A three-member bench of the FCC, headed by Chief Justice Aminuddin Khan and comprising Justice Syed Hassan Azhar Rizvi and Justice Arshad Hussain, heard a batch of appeals filed by the Federal Board of Revenue (FBR) against verdicts of the Sindh High Court, Lahore High Court and Islamabad High Court. These judgements had challenged the levy of the super tax imposed under Section 4B of the Income Tax Ordinance, 2001.
During the hearing, Barrister Farogh Naseem, representing several affected companies, continued his arguments and questioned the scope and applicability of the super tax. He raised concerns over the lack of clarity regarding the sectors to which the tax applies and the rates at which it is to be charged. He pointed out that the Finance Act, 2023 had declared Section 4C of the Income Tax Ordinance effective retrospectively from 2022, creating ambiguity in its implementation.
Naseem further argued that until 2022, banks were subject to a super tax rate of 4 percent, which was later enhanced to 10 percent through the Finance Bill 2023. Taking exception to the stance adopted by the FBR, he said that portraying banks as “thieves” was damaging to their reputation and insisted that such remarks were unacceptable and would have to be answered before the court.
The bench was also apprised that arguments of more than two-thirds of the lawyers involved in the case had already been completed. Counsel for internet companies, Adnan Haider Randhawa, submitted that his client companies had paid super tax for a period of 18 months prior to the enactment of the Finance Bill 2022.
Reacting to this submission, Chief Justice Aminuddin Khan observed that a tax year comprises 12 months and questioned how a tax liability could be stretched to 18 months. FBR’s counsel, Asma Hamid, responded that if taxes had indeed been paid for an excess period, the concerned companies should have sought a refund, emphasizing that all taxes are applicable strictly on a 12-month basis.
Clarifying his position, Randhawa stated that although Section 4C became effective from July 1, 2022, the super tax had been recovered from his client companies starting January 1, 2021, effectively covering an 18-month period. After the completion of his arguments, the court adjourned the hearing until Tuesday.
The bench noted that Jamal Ahmed Sukhira, counsel for Fauji Fertilizers, would begin his arguments at the next hearing.
