Court adjourns hearing on super tax for Jan 12

Taxpayers' counsel contends withdrawal of petroleum concessions a violation of law

ISLAMABAD:

The Federal Constitutional Court of Pakistan on Friday adjourned the hearing of a set of petitions related to super tax after the counsel for taxpaying companies concluded his arguments.

The case will now be taken up again on Monday, January 12. During the proceedings, a key point that emerged was that determining the ceiling for petroleum levy falls within the constitutional domain of the federation; however, the court noted that the exercise of this authority must remain within the bounds of moderation and established law.

A three-member bench, headed by Chief Justice of the Federal Constitutional Court Justice Amin-ud-Din Khan and comprising Justice Hassan Azhar Rizvi and Justice Arshad Hussain Shah, heard the matter.

Presenting detailed arguments on behalf of various companies, senior counsel Makhdoom Ali Khan contended that the withdrawal of statutory exemptions available to petroleum companies constituted a violation of the Tax Act of 1948 and the Petroleum Companies Act.

He argued that the exemptions granted to petroleum exploration companies under the 1948 Act could not be rescinded and noted that the Islamabad High Court had previously affirmed that exemptions must be granted wherever the law provides for them.

He said that the exemptions under the Petroleum Companies Act had been adversely affected through Section 4C of the Super Tax and that the unusually high rate of tax collection had made it increasingly difficult for businesses to operate in Pakistan.

While acknowledging that the federation has the authority to determine the petroleum levy ceiling, he argued that such authority must not be exercised to the point of excess.

The counsel clarified that the powers vested in the president of Pakistan are not personal powers but are exercised by the president as the executive authority of the federation. He maintained that while courts have always upheld their role in interpreting the law, introducing amendments, additions or alterations to legislation on their own motion is contrary to legal principles.

After the completion of arguments, the court adjourned further proceedings in the super tax cases until January 12.