A.   BACKGROUND (BG)

1.   This refers to the related Important TLQCs in trail, blue, italic and double line (a) 3114 of 6.5.25 about Super Tax 4B Constitutional Tax VS Fee issue – Department could not counter ague on 4.5.25 (b) 3104 of 2.5.25 about Super Tax 4B & 4C: 29.4.24 SCP hearing re Deemed Income, FTR & Discriminatory and Now Department submissions from 5.5.25 (c) 3101 of 30.4.25 about Super Tax u/s 4B Tax OR Fee – SCP 15.4.25 update & next update shortly 

2.   We also refer to several Other TLQC including (a) 3060 of 18.2.25 about Will Super Tax u/s 4B implemented once, last until Doomsday? SCP  (b) 2247 of 2.2.23 about Comparison of Super Tax 4C SCP Interim orders & Way Forward  (c) 2244 of 1.2.23 about SCP Super Tax 4C order implementation’s 2nd SHC order & Way Forward  (d) 2233 of 24.2.23 about SCP Super Tax 4C Written Interim order of 16.2.23 about SHC Final order dated 22.12.22  (e) 2203 of 9.2.23 about Super Tax SCP Interim order @50% payment about LHC Interim orders & Way Forward

B.   UPDATED COMMENTARY

1.   Hearing of 4.5.24

1.2   The matter is covered in Constitutional bench resumes super tax case appeal hearing (Attachment 3117.1) whereby five-member Constitutional Bench of the SCP resumed the hearing of super tax cases. Justice Aminuddin Khan is presided over the bench.

1.3   Counsel of the FBR Mr Raza Rabbani informed the court on various points, starting with Sections 4B and 4D of ITO 2001. “SCP can review the principles of tax,” Rabbani said, adding, that the bench was currently hearing the appeal under Article 185.

1.4   Justice Jamal Khan Mandokhail asked, “Please tell me whether this tax was levied under Article 173 or not.” The counsel responded that the entire procedure of taxation is clarified in Article 172. “The Standing Committee of Finance first decides the tax with reference to the budget. The Finance Committee sends it to the Upper House, from there the budget is then approved,” Rabbani said.

1.5   Justice Mandokhail said, “Makhdoom Sahib had laid more emphasis on 4B.” Rabbani answered, “In 4B it is clear that the super tax will be used to repair damaged houses,” adding that there is not a lot of clarity here.

1.6   “Super tax and income tax are different things. Super tax is levied for a specific purpose,” the counsel added.

1.7   “How is the money collected from super tax distributed?” Justice Mandokhail asked, adding, “Can you impose super tax without legislation?” The lawyer answered that legislation was made regarding super tax. “All the money from super tax goes to the federal overall budget,” he said.

1.8   Justice Mandokhail remarked, “How to use the is explained in Article 175. In budgeting, you know how much money the federal government has?” The counsel said, “The amount of super tax will first go to the federal overall budget.”

1.9   Rabbani added, “Regarding super tax, it is written in the preamble of 2016 that the money will first go to the endowment overall budget.”

2.   Hearing on 5.5.25

2.1   Regarding the hearing, the FBR’s counsel Raza Rabbani appeared before the court and submitted further that a brief the court on various points, specifically Section 4B and 4C of the ITO 2001. FBR counsel will continue arguments in super tax (Attachment 3117.2) 

2.2   Mr Rabani argued that the SCP can review tax principles and is hearing these appeals under Article 185 of the Constitution.

2.3   Justice Jamal Mandokhail asked Raza Rabbani whether the tax was imposed under Article 73 of the Constitution. Rabbani responded that the entire taxation process is laid out in Article 73 of the Constitution. He submitted that the finance committee first decides on the budget, which is then sent to the Upper House (Senate) of the Parliament for approval.

2.4   It is pertinent to mention here that Article 73 of the Constitution relates to Procedure with respect to Money Bills. Justice Mandokhail remarked that Makhdoom Ali Khan, counsel for the companies had focused primarily on Section 4B.

2.5   Rabbani clarified that Section 4B is not for local purposes but for local bodies, and it explicitly states that super tax will be used for the rehabilitation of damaged houses, with no specific region defined.

2.6   He added that super tax and income tax are different; super tax is imposed for a specific purpose. Justice Mandokhail inquired how the funds collected from the super tax are distributed and whether it can be imposed without legislation.

2.7   Rabbani responded that legislation had been passed regarding super tax, and all funds go into the federal consolidated budget.

2.8   Justice Mandokhail remarked that the usage of the federal consolidated fund is detailed in Article 75 of the Constitution, adding that during budget formation, the federal government is aware of its financial standing.

2.9   Article 75 of the Constitution talks about the President’s assent to Bills which states that when a Bill is not presented to the President for assent, the President shall, within ten days assent to the Bill or in the case of a Bill other than a Money Bill, returns the Bill to the Majlis-e-Shoora (Parliament) with a message requesting that the Bill, or any specified provision thereof, be reconsidered and that any amendment specified in the message be considered.

2.10   Rabbani submitted that the preamble of the 2016 Act mentions that the funds will go into the federal consolidated budget. Later, the court adjourned the hearing until today (Tuesday) wherein Raza Rabbani will continue his arguments.

3.   Hearing of 6.5.25

3.1 Watch the TV Video clip as Super Tax Case Hearing Postponed SCP Adjourns till next day (Attachment 3117.3).

3.2   On 5.5.25, Justice Muhammad Ali Mazhar raised concerns about the allocation of funds, questioning how the collected amount of 80 billion would be spent BR. Mr Lawyer Raza Rabbani emphasized that the funds should specifically aid victims of terrorism in KP and FATA.

3.3   The SCP has postponed the hearing of the super tax case, raising concerns about the allocation of collected funds. Discussions emphasize the need for transparency in how these funds will be utilized.

4.   Next hearing

As per reliable resources, the case will now be heard on 13.5.25

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