FBR has told the Federal Constitutional Court (FCC) that Parliament has full authority to impose taxes with retrospective effect.
During the hearing, FBR’s counsel argued that a tax law, once validly enacted, can apply to past transactions unless the Constitution clearly restricts such power.
Appearing for the tax authority, Asma Hamid said taxation is a sovereign right of the State and the legislature is empowered to introduce laws either prospectively or retrospectively.
She maintained that this authority can be exercised through the Finance Act at the start of the financial year or at any point during it.
A three-member bench of the FCC, led by Justice Amin-ud-Din Khan and including Justice Syed Hasan Azhar Rizvi and Justice Arshad Hussain, was hearing appeals filed by the FBR.
These appeals challenge earlier decisions by the Sindh, Lahore, and Islamabad High Courts related to the Super Tax imposed under Section 4C of the Income Tax Ordinance, 2001.
The FBR argued that the High Courts overstepped their role by reinterpreting the law in a way that altered Parliament’s original intent.
According to the tax authority, courts cannot rewrite fiscal laws, as doing so violates the principle of separation of powers. The counsel also stressed that every law passed by Parliament carries a strong presumption of constitutionality.
The FBR urged the court to uphold Section 4C, stating that the Super Tax does not violate equality principles and aligns with international tax practices.
After the FBR concluded its arguments, senior lawyer Makhdoom Ali Khan, representing taxpayers, resumed submissions.
He questioned the authority of the Commissioner Inland Revenue to file the appeals instead of the federal government. The court adjourned the hearing until January 7.