I. Background

(1) This refers to the related Important (a) TLQC3594 of 30.6.26 about Super Tax u/s 4C: Surcharge stayed where ultra vires declared earlier by IHC - IHC Interim relief as KC predicted and KC views (b) TLQC 3475 of 17.4.26 about Super Tax Default Surcharge recovery stayed - SHC unreported Main Interim order found (c) TLQC 3456 of 26.3.26 about Super Tax: FBR targets Rs 100bn Delay Surcharge and KC Views & Recommendations - in trail, blue, italic and double Line (2) Also refer to other relevant TLQCs List is given in Para III for ready reference

II. Updated Commentary

Further to KQU ----------- of ------, being an important matter, we would inform you about  ---------------------------- (Attachment 3604.1 - unreported order) 

2. After deliberating paragraphs -----------------, ------ concluded and held as follows in para -----, as we covered, with emphasis ours in bold & Underline for quick reading.   .

2.1 For the reasons recorded hereinabove, we hold that the appellant's liability to Super Tax arose by operation of Section 4C of the Ordinance upon the prescribed statutory due date. Neither the deemed assessment u/s 120, nor the machinery provisions contained in Section 137, nor the subsequent determination made by the Commissioner u/s 4C(4) created the liability or postponed the date on which it became payable. The order passed u/s 4C(4) merely determined and quantified a statutory liability that had already arisen under the charging provision.

2.2 We further hold that Section 205 is a consequential and compensatory provision intended to compensate the public exchequer for delay in the payment of tax lawfully attributable to the taxpayer. Although its operation is automatic once the statutory conditions prescribed therein are fulfilled, its applicability is necessarily conditioned upon the existence of

2.3 legally cognizable default. The automatic computation of default surcharge cannot be divorced from the anterior determination that the delay in payment is legally attributable to the taxpayer in circumstances constituting a default within the meaning of the Ordinance.

2.4 In the present case, immediately after the enactment of Section 4C, the constitutional validity of the levy became the subject of proceedings before the Honourable Islamabad High Court and thereafter before the Honourable SCP. During the pendency of those proceedings, the superior courts consciously regulated the timing, manner and extent of payment of the disputed levy through binding judicial orders. The appellant faithfully complied with every operative direction issued from time to time, including the furnishing of post-dated cheques and the subsequent deposit of the amount directed by the Honourable SCP.

2.5 Although the statutory liability u/s 4C continued to subsist throughout the relevant period, the appellant's immediate legal obligation during the currency of the judicial orders was measured by those binding directions. Consequently, the temporary delay in payment cannot, in law, be regarded as a default attributable to the appellant. The jurisdictional fact necessary for invoking Section 205 was therefore absent during the protected period. The doctrine actus curiae neminem gravabit, the principles recognised in the fiscal jurisprudence discussed hereinabove, and the constitutional guarantees embodied in Articles 4, 10A and 77 of the Constitution reinforce this conclusion by precluding the imposition of adverse fiscal consequences upon a litigant who has acted in faithful compliance with binding judicial orders.

2.6 Accordingly, we hold that the Assessing Officer rightly determined the appellant's liability to Super Tax u/s 4C of the Ordinance. However, the levy of default surcharge u/s 205 for the period during which the appellant's obligation to pay remained regulated by the interim and final orders of the superior courts is without lawful authority and cannot be sustained. The impugned order levying default surcharge for the said protected period is, therefore, set aside to that extent. Subject to the above observations, the appeal stands allowed in the aforesaid terms.

III. List of Further TLQCs about section 4B/4C (with more Important in bold)

(a) 3552 of 11.6.26 about NCCPL Revised CGT & Super Tax Computation for TY 2026 

(b) 3477 of 20.4.26 about Super Tax: No Default Surcharge recovery, without adhering to Section 137(2) - SHC

(c) 3493 of 29.4.26 about Super Tax u/s 4B & 4C: Detailed Order released today

(d) 3497 of 30.4.26 about Super Tax 4C: Post S.120 Deemed Assessment, Direct Section 4C Order, without S.122 is void per ATIR & KC Views

(e) 3444 of 25.2.26 about Super Tax u/s 4C: Misapplication & Premature Recovery leading to Severe Hardship - LTBA letter

(f) 3443 of 24.2.26 about Super Tax u/s 4C: Irregularities in Enforcement - PTBA letter 

(g) 3439 of 19.2.26 about Super Tax u/s 4B/4C: FCCP Super Shock and Urgent Practical Solutions required

(h) 3434 of 4.2.26 about Super tax u/s 4B/4C: Demand challenged on non-rectified ground; Recovery stayed by SHC 

(i) 3431 of 1.2.26 about FCCP Short Order: Sections 4B/4C Super Tax almost intra vires Constitution details

(j) 3429 of 29.1.26 about PSX Fallen as KC predicted & may fall more, as 4B & 4C FCCP order 

(k) Over 60 other commentaries on various aspects of Super Tax

IV. Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (900+ Tax, Levies, Companies, Banking, Finance, Economy, Inflation, etc Quick Commentary Service Provider and High Level 416+ Tax & Levies Laws Consultants)