Law: Income Tax Ordinance, 2001

Section: 2(63),4,4B,Division11A ofPartIt ofirst Schedule

Law: Constitution of Pakistan, 1973

Section: 8,25,73(2),73(2)(a),73(3),260

INCOME TAX ORDINANCE, 2001 (XLIX OF 2001)----Sections: 4 , 4B - Division 11A of Part I to First Schedule - Constitution of Pakistan, 1973, Articles 25, 73(2), 73(2)(a), 73(3) , 260 - Entry 47 of Federal Legislative List - Levy and imposition B amounted to imposing additional tax on income and imposition of double tax - Vires of section 4B - Challenge to - FACTS the challenge to constitutionality of section 4B of the Ordinance of 2001, as raised by the learned counsel for the petitioners, was three-pronged. The first was a challenge to the process through which section 4B was promulgated. The crux of the arguments was that as super tax, which was levied through section 4B of the Ordinance of 2001, is for a specific purpose (i.e. for the benefit of rehabilitation of temporarily displaced persons), the levy was not meant to contribute to the Federation and could therefore not be deemed a tax. And that as it was not a tax. the said levy could not have been enacted by introducing a provision in the Finance Act as in view of Article 73(2) and (3) of the Constitution, it could only have been promulgated by Parliament through ordinary legislation and not by the National Assembly alone through a Finance Bill. ARGUMENTS The second argument of the learned counsel for the petitioners was that section 4B amounted to imposing an additional tax on income which constituted imputable income, and imposition of double tax on income that had already been taxed was not permissible. It was further contended that a tax statute could only include one charging section and that as section 4 of the Ordinance of 2001 was a charging section, a second charging section in the form of section 4B was not permissible. The third argument of the learned counsel for the petitioners was that super tax pursuant to section 4B had been imposed on a narrow category of taxpayers which made it discriminatory and it was liable to be held ultra vires under Article 25 of the Constitution. Learned counsel for the respondents submitted that section 4B of the Ordinance of 2001 was a tax and not a fee or a cess and was rightly introduced as part of Money Bill. That section 4B amounted to imposition of a tax and…

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