'Super tax can't be imposed after deadline'

The Supreme Court on Monday resumed hearings in the super tax case, where members of the larger constitutional bench made key observations regarding the imposition and timing of the tax.

A five-member bench, headed by Justice Aminuddin Khan, heard the case.

During the proceedings, Justice Jamal Khan Mandokhail remarked that taxes other than sales tax can also be imposed under the National Finance Commission (NFC).

Justice Muhammad Ali Mazhar observed that "a tax cannot be imposed after the expiry of the prescribed time". Appearing on behalf of several corporate petitioners, Barrister Farogh Naseem argued that the Sindh High Court had already declared the July 1, 2023, super tax null and void, ruling that a 4% tax rate be applied instead of 10%.

He contended that the federal government could not legally impose a tax beyond the constitutionally defined period.

Another counsel, Hafiz Ehsan Khokhar, said that lawyers were presenting their arguments with "patience and dignity" and expected a fair hearing.

The case, which concerns the legality and constitutional limits of the government's power to impose a super tax, will continue today (Tuesday) as the bench resumes deliberations.

On April 4, 2024, a division bench of the Islamabad High Court, comprising then Chief Justice Aamer Farooq and Justice Tariq Mehmood Jahangiri, while hearing intra-court appeals, directed one of the respondents to continue paying the tax liability under Section 4C as amended by the Finance Act of 2023.

The "super tax," first introduced by the PML-N government in 2015, targets high-income individuals, associations of persons, and companies earning more than Rs500 million annually.

It imposes a 4 per cent levy on the income of banking companies and 3 per cent on other sectors, with the revenue intended to fund the rehabilitation of temporarily displaced persons.