The Federal Constitutional Court (FCC) was informed on Wednesday that Section 4C of the Income Tax Ordinance, 2001, is “completely illegal and unconstitutional” and does not meet the standards required for federal legislation.
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 appeals filed by the Federal Board of Revenue (FBR) against the Sindh, Lahore, and Islamabad High Court judgments regarding the levy of super tax through Section 4B of the Income Tax Ordinance, 2001.
Continuing his arguments, Makhdoom Ali Khan, counsel representing taxpayer companies, argued that Section 4C of the ordinance was unlawful and unconstitutional, reiterating that it failed to satisfy constitutional requirements for federal taxation measures. He questioned under which legal authority the tax had been collected so far if the law itself did not permit such collection.
Justice Rizvi inquired whether the FBR and tax commissioners had been made parties in the Islamabad High Court proceedings. The counsel responded in the affirmative, stating that both were included as respondents before the IHC.
The counsel further argued that the super tax imposed under Section 4C placed an additional burden on the business community and that its rates were not applied uniformly across sectors, leading to discrimination. After hearing the arguments, the court adjourned the proceedings until Thursday (today).