ISLAMABAD: The Federal Constitutional Court (FCC) was informed on Wednesday that Section 4C of the Income Tax Ordinance, 2001, is wholly illegal and unconstitutional, failing to meet the constitutional 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) challenging judgments of the Sindh, Lahore, and Islamabad High Courts concerning the imposition of super tax under Section 4B of the Income Tax Ordinance.
During the hearing, counsel for the taxpayer companies, Makhdoom Ali Khan, argued that Section 4C was unlawful and constitutionally defective, asserting that it did not fulfil the legal requirements for imposing federal taxes. He questioned the legal authority under which the super tax had been collected to date if the provision itself was invalid.
Justice Rizvi asked whether the FBR and tax commissioners were made parties in the Islamabad High Court proceedings. The counsel confirmed that both had been impleaded as respondents before the IHC.
The counsel further contended that the super tax levied under Section 4C imposed an excessive burden on businesses and was applied at non-uniform rates across different sectors, resulting in discriminatory treatment. After hearing the arguments, the court adjourned the proceedings until Thursday (today).
