CB seeks super tax distribution status
A member of a constitutional bench (CB) of the Supreme Court on Tuesday inquired whether the federal government distributes revenue from the super tax among the provinces, and if such distribution is permissible under the law.
The five-member bench, led by Justice Aminuddin Khan, resumed hearing a slew of petitions challenging the imposition of a super tax introduced in 2016 for the rehabilitation of internally displaced persons (IDPs) during Operation Zarb-e-Azb. The operation, launched by the PML-N led government in 2014, aimed to eliminate terrorist strongholds in North Waziristan.
During the hearing, senior advocate Makhdoom Ali Khan - representing companies contesting the tax - began his arguments by distinguishing between income tax and super tax. He said that income tax applies regardless of income level, and that all tax revenue goes into the national treasury without a designated purpose.
"Under Section 113 of the Income Tax Ordinance, even minimal income is subject to taxation," he said.
Justice Jamal Khan Mandokhail questioned whether the federal government distributes super tax revenue among the provinces, Khan responded that, according to a speech by the then finance minister, the super tax was intended solely for the rehabilitation of IDPs.
"The super tax was first introduced in 2016, extended for one year in 2017, and later made indefinite in 2019 through the use of the word 'onwards'," he added.
Khan argued that the tax was never intended to be distributed among provinces, and asserted that not a single rupee has yet been spent on IDP rehabilitation.
Justice Jamal Khan Mandokhail again asked the additional attorney general whether an amountwhether it be Rs8 or Rs8 trillioncan be distributed in such a way.
Earlier, Justice Aminuddin Khan remarked that in the absence of a key lawyer, he had asked other counsel to proceed with arguments. However, the lawyers responded that since Makhdoom Ali Khan is a senior advocate, they would wait for him to conclude before presenting their own arguments.
Justice Khan requested Makhdoom Ali Khan to try and conclude his arguments soon. Advocate Makhdoom Ali Khan stated that he follows his friend Khawaja Haris's lead and will try to conclude his arguments as quickly as possible.
Smiling, Justice Jamal Khan Mandokhail remarked to Makhdoom Ali Khan that he should not follow his friend, Khawaja Haris, in this matter. The Supreme Court will resume hearing today.
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