Professional Documents
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(CONSTITUTIONAL JURISDICTION)
VERSUS
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S No. Document Annex Page
1. Urgent Form + Court Fee
2. Memo of Petition a/w Affidavit 1-12
ISLAMABAD
DATED:- -11-2023 ADVOCATE FOR THE PETITIONER
IN THE ISLAMABAD HIGH COURT, ISLAMABAD
(CONSTITUTIONAL JURISDICTION)
VERSUS
1. FEDERATION OF PAKISTAN
Through Secretary
Finance Divisions
Islamabad.
Respectfully sheweth,
3. That the Petitioner through relentless perseverance and hard work has been
successful in facilitating economic growth which has enabled its business
operations to an increase in turnover to the benefit of the national exchequer.
4. That instead of incentivizing the Petitioner on the basis of increase in turn over
and other enabling factors etc, Respondent No.1 has imposed a Super Tax
which inter alia is confiscatory and appears to target, penalize and burden the
Petitioner and a narrow group of entities/corporations. The shared identifying
categorization of these entities for this levy is that their unwavering diligence
and dedication of these efforts have led to the expansion of business operations,
resulting in the attainment of a specific tax bracket and turnover threshold and
resultantly contributed positively and progressively to the ultimate benefit of
Pakistan and the public at large.
6. That Entry 47 of Part 1 of the Fourth Schedule to the Constitution of the Islamic
Republic of Pakistan, 1973 (the “Constitution”) empowers the Respondent No.1
i.e Federal Government to levy taxes on income other than agricultural income.
In pursuance thereto, the Respondent No.1 has enacted the Income Tax
Ordinance, 2001 (the “Ordinance”).
7. That vide the Finance Act, 2015, Section 4B was inserted to the Ordinance, 2001,
whereby Super Tax was introduced and imposed for the rehabilitation of
temporarily displaced persons for the tax year 2015 onwards at the rates
specified in Division II-A of Part I of the First Schedule of the Ordinance, 2001,
on the income of every person specified in the said division. The levy of Super
Tax through Section 4B of the Ordinance, 2001 is pending adjudication before
the Honorable Supreme Court.
8. That subsequently the Respondent No.1 once again introduced Super Tax vide
Section 5(3) of the Finance Act, 2022, which introduced Section 4C to the
Ordinance, 2001, where under Super Tax was levied for tax year 2022 and
onwards at the rates specified in Division II-B of Part I of the First Schedule to
the Ordinance, 2001, (the “Division II-B”) on the income of every individual.
The rate of Super Tax to be charged directly proportional to the income of the
taxpayer i.e. the rate of tax increased depending on the income of a taxpayer,
with the highest rate of tax at four percent (4%) for those taxpayers whose
income exceeded Rupees Three Hundred Million. It is submitted that Division
II-B contained a proviso which stated that for tax year 2022, certain industries
would be charged Super Tax at the rate of 10% if their income exceeded Rupees
Three Hundred Million.
9. That Section 4C of the Ordinance, 2001 was challenged before the various High
Courts of Pakistan and inter alia, on grounds of being retrospective
retrospectively for tax year 2022 as this encroached upon past and closed
transactions that a taxpayer has conducted throughout the tax year prior to the
coming into force of Section 4C on 1.07.2022. It was further contended that the
applicable law for taxpayers for tax year 2022 would be the one prevalent law
as it stood, on the last day of the tax year irrespective of a special or a normal
tax year period. Additionally, the proviso added to Division II-B was out right
discriminatory and violated the fundamental rights of the taxpayers as
enshrined under Article 25 of the Constitution.
10. That the Honorable High Court of Sindh passed Judgment in respect of Section
4C of the Ordinance, 2001 reported as 2023 PTD 607 (Re Shell Pakistan Limited
vs Federation of Pakistan and others), whereby the proviso added to Division
II-B was held to be discriminatory as there was no intelligible differentia having
rational nexus with the object of classification. Furthermore, the Honorable
Court was pleased to observe that the provision of Section 4C of the Ordinance,
2001, was read in a manner to reflect that the Super Tax levy would be
applicable from tax year 2023. Similarly, the Honorable Islamabad High Court
has also passed judgment in Writ Petition 4027 of 2022 (Re Fauji Fertilizer
Company Limited and Another vs Federation of Pakistan and others)
wherein, the Honorable Court was pleased to strike down the retrospective
application of Section 4C to the tax year 2022 in consonance with the dicta
handed down by the Honorable High Court of Sindh.
11. That it is respectfully submitted that the Respondent No.1 has filed appeal
before the Honorable Supreme Court against the judgments passed by the
Honorable High Courts of Karachi, Lahore and Islamabad, respectively, which
are pending adjudication before the Honorable Supreme Court. It is submitted
that the Honorable Supreme Court has been pleased to pass ad-interim orders,
whereby, the tax payers therein and others falling in the category as prescribed
by the proviso to Division II-B have been directed to deposit Super Tax at the
rate of 4%. It is submitted that the Petitioner as a party in the proceedings
before the Honorable Supreme Court have duly complied with the said order.
12. That pending adjudication, Respondent No.1 vide Section 7(27)(A),(1A) of the
Finance Act, 2023 (the “Act, 2023”) has amended the rate of Super Tax to be
applied as per Division II-B (the ‘Impugned Amendment’) for tax year 2023,
which is reproduced hereunder as follows:
DIVISION IIB
SUPER TAX ON HIGH EARNING PERSONS
The rate of tax under section 4C shall be
TABLE
13. That per the Impugned Amendment, the rate of Super tax payable by the
Petitioner under Section 4C of the Ordinance, 2001 has increased to 10% as
compared to 4% which otherwise is the applicable rate for tax year 2023 in light
of the judgments of the Honorable High Courts of Sindh, Lahore and Islamabad
respectively. To exacerbate the substantive rights of the Petitioner, the amended
rates have been introduced retrospectively for tax year 2023, i.e., prior to the
coming into force of the Act, 2023. It is submitted that the Impugned
Amendment is patently arbitrary, illegal, discriminatory and ultra vires the
Ordinance, 2001 and the Constitution. It is clear that the Impugned
Amendment has been made in order to nullify the effect of the judgments
passed by Honorable High Courts of Karachi, Lahore and Islamabad
respectively in respect of the discriminatory nature of the proviso to Division II-
B of the Ordinance, 2001.
14. That it is submitted the Petitioner made economic and financial decisions on the
basis of the rates of Super Tax that ought to be applicable up to the end of the
last day of tax year 2023 i.e 31.12.2022. It is categorically submitted that the
Impugned Amendment in the rates of Super Tax as introduced by the Act, 2023
cannot be applied retrospectively to tax year 2023 as the levy of tax ought to be
determined and applied on the basis of the law as it stood prior to the
amendment introduced through the Act, 2023. Moreover, the retrospective
application of the revised rates of Super Tax to tax year 2023 encroaches upon
past and closed transactions and violates the well settled principles of law that
the power to tax does not extend to past and closed transactions.
GROUNDS
A. That the Impugned Amendment which has increased the rate of Super Tax to
10% applicable in the case of the Petitioner for tax year 2023 and onwards not
based on any rational and reasonable classification and hence, violates the
fundamental rights of the Petitioner as enshrined under Article 25 of the
Constitution on account of being patently discriminatory in nature.
F. That even otherwise, if it is the contention of the Federation that levy of Super
tax is not a tax on ‘income’ under Section 4 of the Ordinance, 2001 but a special
levy on capacity of high earning individuals, the same would fall under Serial
No. 52 of the Fourth Schedule to the Constitution and, therefore, the tax can
either be charged under Section 4 or Section 4C of the Ordinance, 2001, but not
both.
G. That Super tax has been levied by inserting Section 4C into Chapter II (titled
‘Charge of Tax’) of the Ordinance, 2001 however, neither the definition of ‘tax’
given in Section 2(63), nor Section 4 of the Ordinance, 2001, has been amended
to permit such levy in addition to the existing charge of tax on income.
Furthermore, all classes of income under Section 4C of the 2001 Ordinance are
already defined and covered under various heads of income chargeable to tax.
There exists no authority or legislative competence with the Respondents for
defining a new category of income using other taxable classes of income.
H. That without prejudice to the above, it is submitted that Impugned Super Tax
having has already been levied under Section 4B of the Ordinance, 2001 and
hence, exhausts the competence of the Respondent No.1 to levy further Super
Tax by addition of any other provision including Section 4C in the Ordinance,
2001 through the Impugned Amendment.
I. That Section 8 of the Ordinance, 2001, inter alia, explicitly designates the
taxation of profit on debt, dividends as ‘final tax’ on the amount in respect of
which the tax is imposed. It is submitted that under Section 8, the ‘amount’ of
these income classes is excluded from the definition of ‘taxable income’, with no
deductions, allowances, or tax credits permitted. Reintroducing them as
‘income chargeable to tax’ under Section 4C, is contrary to the intent of the
statute and constitutes a breach of the law and, by extension, a breach of the
taxpayer's rights, as taxation must adhere to the law alone, which in this context
is the Ordinance, 2001. Levying tax in contravention of an existing statutory
provision amounts to a confiscatory act that violates Articles 23 and 24 of the
Constitution.
J. That Section 4C (5A) as inserted by the Respondent No.1 through the Act, 2023
is in conflict with provision of Section 147(1) of the Ordinance, 2001.
Furthermore, the collection of super tax through advance tax is ultra vires and
same is predicated on the basis that levying advance tax solely on the
assumption derived from the previous year's tax return is legally untenable.
This is premised on the potential scenario in which a company/entity could
incur losses over the course of the current fiscal year, rendering its income
insufficient to meet the criteria for inclusion in the super tax category or tax
slabs. Hence, no advance tax is payable by the Petitioners in terms of Section 4C
(5A) of the Ordinance, 2001, till the culmination of the relevant tax year and
finalization of accounts.
K. That the Impugned Amendment has been retrospectively introduced after the
closure of tax year 2023. The Petitioner has already carried out transactions,
entered into contracts, and completed their fiscal obligations on the basis of the
law that existed prior to the Impugned Amendment. The payment of dividend
and other financial obligations make these past and close transactions. As such,
the Petitioners are entitled to be treated in accordance with the law as it was
prior to the Impugned Amendment.
L. That it is a settled principle of law that the power to tax does not extend to past
and closed transactions. The income tax liability of a taxpayer stands accrued
and crystalized at the close of the financial year. As a result, Respondent No.1
cannot introduce a new rate of tax after the closure of the tax year period
through the Impugned Amendment.
N. That the retrospective increase in the rates of Super Tax for the tax year 2023 is
ultra vires the Constitution as vested rights have accrued in favour of the
Petitioner in accordance with the taxing provisions of the Ordinance, 2001, as
they existed on the closure of tax year 2023, i.e., 31.12.2022 for the Petitioner
following the special tax year.
R. That without prejudice to the above, it is submitted that Act, 2023, which
introduced the Impugned Amendment contained no specific provision to give
it retrospective effect. Thus, in cases where the tax year ended on 31.12.2022, it
cannot be applied to this period as it stood past and closed.
That the Petitioner craves leave of this Honorable Court to raise further
grounds at the time of oral hearing.
PRAYER
It is, therefore, most respectfully prayed in the interest of justice that this
Honorable Court may be pleased to allow the petition and: -
I. Declare that Section 4C of the Ordinance, 2001, read with Division II-B Part I of
Schedule I as amended vide the Act, 2023, is ultra vires the Constitution.
II. Declare without prejudice to foregoing Prayer I, that rate of Super Tax as
prescribed under Division II-B Part I of Schedule I of the Ordinance, 2001, as
amended vide the Act, 2023, cannot be given effect or made applicable to tax
year 2023.
III. Prohibit and restrain the Respondents and their officers from taking any
coercive/adverse action for recovery of Super Tax from the Petitioner and/ or
direct the Respondents to allow and enable the Petitioner to file its tax returns
without payment of Super Tax.
IV. Grant any other relief deemed just and appropriate in the circumstance of the
case.
CERTIFICATE
1. As per instructions, this is the first Writ Petition that has been filed on the
instant subject matter and no other such Petition is pending before any other
Court including the Honourable Supreme Court.
2. It is further certified that the instant petition has arisen from violation/non-
fulfillment of obligations under the law and that no alternate remedy provided
by the law.
3. It is certified that identical Writ Petition 2436 of 2023, titled M/s Pakistan Oilfields
Limited Vs. Federation of Pakistan is pending before Your Lordship Mr. Justice
Sardar Ejaz Ishaq.
COUNSEL
IN THE ISLAMABAD HIGH COURT, ISLAMABAD
(CONSTITUTIONAL JURISDICTION)
IN
VERSUS
AFFIDAVIT
I, Abdul Moid son of Muhammad Saleem, Muslim, adult, holding CNIC No. 42301-
4098529-9, having address Ayesha Nagar Apartment, Flat No.416, Block 1-C, Sir Shah
Suleman Road, Liaquatabad, Karachi, and duly authorized officer of the Petitioner.
That I am authorized officer of the Petitioner herein and fully conversant with the facts of the
case.
I, the above named Deponent, do hereby solemnly affirm on oath and declare as
under:-
That the contents of the Main Petition are true and correct to the bests of my
knowledge and belief and that nothing has been concealed mis-stated herein.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742
VERIFICATION
Verified on oath at Karachi that the contents of the above affidavit are true to the best
of my knowledge and belief and nothing material has been concealed or suppressed.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742
IN THE ISLAMABAD HIGH COURT, ISLAMABAD
(CONSTITUTIONAL JURISDICTION)
IN
VERSUS
Respectfully Sheweth : -
1. That the captioned Writ Petition is being filed by the present Applicant / Petitioner
which may kindly be read as integral part of the instant application.
2. That the present Applicant / Petitioner has a good prima facie case and hope to
succeed the same.
3. That the balance of convenience also leans in favour of the present Applicant /
Petitioner.
4. That the petitioner will suffer an irreparable loss if the relief as prayed for is not
granted to him.
PRAYER
It is therefore most respectfully prayed in the interest of justice that this Honorable
Court may be pleased to prohibit the Respondents taking any adverse action
against the Petitioner in pursuance of the Impugned Amendment by applying it to
tax year 2023 and from raising any demand of Super Tax inconsistent with or in
violation of the Fauji Fertilizer Judgment.
Islamabad
Dated: _____.11.2023 ADVOCATE FOR THE PETITIONER
IN THE ISLAMABAD HIGH COURT, ISLAMABAD
(CONSTITUTIONAL JURISDICTION)
IN
VERSUS
AFFIDAVIT
I, Abdul Moid son of Muhammad Saleem, Muslim, adult, holding CNIC No. 42301-
4098529-9, having address Ayesha Nagar Apartment, Flat No.416, Block 1-C, Sir Shah
Suleman Road, Liaquatabad, Karachi, and duly authorized officer of the Petitioner.
That I am authorized officer of the Petitioner herein and fully conversant with the facts of the
case.
I, the above named Deponent, do hereby solemnly affirm on oath and declare as
under:-
That the contents of the accompanying stay application are true and correct to the
bests of my knowledge and belief and that nothing has been concealed mis-stated
herein.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742
VERIFICATION
Verified on oath at Karachi that the contents of the above affidavit are true to the best
of my knowledge and belief and nothing material has been concealed or suppressed.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742
IN THE ISLAMABAD HIGH COURT, ISLAMABAD
(CONSTITUTIONAL JURISDICTION)
IN
VERSUS
Respectfully Sheweth:
1. That the above titled petition has been filed before this Honourable Court and
the annexed documents have been filed alongwith the petition as uncertified
copies of the original.
2. That the Petitioner undertakes to supply the said documents as and when made
available to him.
3. In view of the above, it is most respectfully prayed that the certified copies of
the documents annexed with the writ petition may kindly be dispensed with.
ISLAMABAD
DATED:- -11-2023 COUNSEL FOR PETITIONER
IN THE ISLAMABAD HIGH COURT, ISLAMABAD
(CONSTITUTIONAL JURISDICTION)
IN
VERSUS
AFFIDAVIT
I, Abdul Moid son of Muhammad Saleem, Muslim, adult, holding CNIC No. 42301-
4098529-9, having address Ayesha Nagar Apartment, Flat No.416, Block 1-C, Sir Shah
Suleman Road, Liaquatabad, Karachi, and duly authorized officer of the Petitioner.
That I am authorized officer of the Petitioner herein and fully conversant with the facts
of the case.
I, the above named Deponent, do hereby solemnly affirm on oath and declare as
under:-
That the contents of the accompanying exemption application are true and correct to
the bests of my knowledge and belief and that nothing has been concealed mis-stated
herein.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742
VERIFICATION
Verified on oath at Karachi that the contents of the above affidavit are true to the best
of my knowledge and belief and nothing material has been concealed or suppressed.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742
VAKALATNAMA
VERSUS
ACCEPTED : _____________
IN
VERSUS
It is humbly prayed on behalf of Petitioner that this Honourable court for the
averments made in the Memo of Petition, reasons disclosed in the annexed affidavit
and in the interest of justice and equity may be pleased to treat this matter as urgent
and put up in court / chambers for hearing on -11-2023 for necessary orders on
ISLAMABAD
DATED:- -11-2023 COUNSEL FOR PETITIONER
IN THE ISLAMABAD HIGH COURT, ISLAMABAD
(CONSTITUTIONAL JURISDICTION)
IN
VERSUS
AFFIDAVIT
I, Abdul Moid son of Muhammad Saleem, Muslim, adult, holding CNIC No. 42301-
4098529-9, having address Ayesha Nagar Apartment, Flat No.416, Block 1-C, Sir Shah
Suleman Road, Liaquatabad, Karachi, and duly authorized officer of the Petitioner.
That I am authorized officer of the Petitioner herein and fully conversant with the facts of the
case.
I, the above named Deponent, do hereby solemnly affirm and declare as under:-
That the contents of the accompanying urgent application are true and correct to the
bests of my knowledge and belief and that nothing has been concealed mis-stated
herein.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742
VERIFICATION
Verified on oath at Karachi that the contents of the above affidavit are true to the best
of my knowledge and belief and nothing material has been concealed or suppressed.
DEPONENT
CNIC No. 42301-4098529-
9
Cell No. 0341-2635742