ISLAMABAD: The Islamabad High Court has suspended Federal Board of Revenue (FBR) notices issued to three independent power producers for super tax recovery, citing the authorities’ failure to follow the procedure outlined in the Income Tax Ordinance, 2001.
The order was issued while hearing petitions filed by the companies challenging actions taken by the Corporate Tax Office Islamabad.
The petitions claimed that the tax authorities initiated recovery proceedings without issuing the mandatory notice under Section 137 of the ordinance, which requires taxpayers to be given time to deposit their assessed tax liability before enforcement measures are taken.
The companies argued that although the Federal Constitutional Court’s judgment on super tax is binding, the FBR did not comply with procedural requirements.
They also said their deemed assessment orders under Section 122(5A) were amended, increasing taxable income and super tax liability. Following this, the Corporate Tax Office attached the companies’ bank accounts under Sections 138 and 140, bypassing Section 137.
The petitioners noted that they had filed appeals with the Commissioner Inland Revenue (Appeals), but no stay order against recovery had been granted.
The Islamabad High Court clarified that the companies were not challenging the legality of Section 4C, under which the super tax is imposed, but were questioning the procedure followed by the tax authorities. The court found their arguments warranted consideration and issued notices to the tax authorities.
As a result, the recovery notices issued on January 30 and 31, 2026, by the Corporate Tax Office Islamabad will remain suspended until the next hearing.
