FCC slams the door on super tax review

November 12, 2026 (MLN): The Federal Constitutional Court (FCC) of Pakistan has dismissed a large batch of review petitions filed by corporates and individual taxpayers against its short order/judgment of January 27, 2026, which upheld the constitutional validity of the super tax levied under sections 4B and 4C of the Income Tax Ordinance, 2001.

A three-member bench headed by Chief Justice Amin-ud-Din Khan, and comprising Justice Syed Hasan Azhar Rizvi and Justice Syed Arshad Hussain Shah, heard the matter on November 2, 2026. The judgment, authored by the Chief Justice, was announced in open court in Islamabad on November 11, 2026.

“For the foregoing reasons, no ground for review is made out,” the court held, adding that the judgment under review, along with all directions contained in it, “shall remain undisturbed and operative in accordance with law.” No order was made as to costs.

Who sought the review

The review petitions, numbered between F.C.R.P. 150 and F.C.R.P. 395 of 2026, along with a further set bearing the “L” suffix (F.C.R.P. 2-L to 19-L of 2026), number more than 250. They sought reconsideration of the January 27 decision, which had settled a consolidated batch of petitions, appeals and transferred cases that, according to the judgment, emanated from divergent pronouncements of various High Courts on the vires of the super tax.

The petitioners cut across banking, fertilizer, energy, cement, pharmaceuticals, textiles and other sectors. Banks include JS Bank Limited, United Bank Limited, Meezan Bank Limited, Bank Al-Falah Ltd and Bank Islami Pakistan Limited. From fertilizer came Fauji Fertilizer Company Limited, Fauji Fertilizer Bin Qasim Limited, Engro Fertilizer Limited, Fatima Fertilizer Company Limited and Pak Arab Fertilizer Limited.

Energy and petroleum petitioners include Pakistan Petroleum Limited, Pakistan Oil Field Ltd., Attock Refinery Limited, Attock Petroleum Limited, The Attock Oil Company Limited, Pakistan Refinery Limited, The Hub Power Company Limited, Wafi Energy Pakistan Limited (formerly Shell Pakistan Limited) and Total Parco Pakistan Limited (now Parco Gunvor Limited).

Cement makers Lucky Cement Ltd, Maple Leaf Cement Factory Limited, Pioneer Cement Ltd, Cherat Cement Company Limited and Thatta Cement Company Limited also sought review, as did Engro Corporation Ltd, Indus Motors Company Limited, Packages Limited, The Searle Company Limited, Colgate Palmolive Pakistan Limited, Lotte Chemical Pakistan, IGI Holdings Ltd, Arif Habib Corporation Limited, Nishat Chunian Ltd and Sapphire Textile Mills Ltd, among others.

Other petitioners included Defence Housing Authority, Lahore, Lahore Grammar School Pvt Ltd and Sialkot International Airport Limited, alongside a number of individual taxpayers.

A narrow window

The court framed the central question as whether the petitioners had shown any error apparent on the face of the record, material omission or other legally cognizable infirmity. Review, it said, is an exceptional and narrowly confined jurisdiction that is neither a substitute for appellate adjudication nor a means to reopen controversies already decided.

Mere disagreement with the reasoning, or the plausibility of an alternative interpretation, provides no basis for review, the bench held, adding that the jurisdiction cannot be used as a disguised appeal or to rehear the matter on merits.

Each ground rejected

Legislative competence. The court reiterated that the super tax under sections 4B and 4C falls within a tax on income under Entry 47 of Part I of the Federal Legislative List in the Fourth Schedule to the Constitution, attracting Parliament’s competence and the Money Bill procedure under Article 73. The supplementary character of the levy, even where the same income has already been taxed, does not by itself invalidate it.

Retrospective operation. On section 4C, the court noted that its January judgment had examined the provision’s applicability from Tax Year 2022 and the revised rates prescribed for Tax Year 2023, and had maintained the distinction between the accrual of a tax liability and its later assessment or recovery. The petitioners, it said, were merely seeking to reargue an issue already decided.

Equality under Article 25. The bench held that the income-based classifications and differential treatment in the relevant Schedules had already been found to bear a rational nexus with the legislative object. Article 25 does not bar reasonable fiscal classification, it said, and the legislature has latitude to define taxable classes, set thresholds and calibrate rates.

Computation, capital gains and final-tax regimes. Questions on computation of income, inclusion of capital gains and the application of section 4C to income under separate or final taxation regimes were also found to have been conclusively decided. The court described section 4C as an independent charging provision and held that a distinct mode of taxation does not, by itself, confer immunity from it in the absence of an express exemption or necessary statutory exclusion.

E&P companies and funds. The court said its January judgment had duly considered the statutory protections for petroleum exploration and production companies under the Fifth Schedule and relevant Petroleum Concession Agreements, as well as exemptions for qualifying benevolent, provident, pension, gratuity and similar funds under section 53 read with the Second Schedule. Any question of individual assessment or implementation, it added, must be resolved under the governing law and is not a ground for review.

Supreme Court precedent. The bench rejected the argument that it was bound by judgments of the Supreme Court of Pakistan. Following the Constitution (Twenty-seventh Amendment) Act, 2025, the FCC exercises independent constitutional jurisdiction, and Supreme Court judgments carry persuasive value but are not binding on it, the court held.

Financial impact. The court said neither the financial implications nor the number of affected persons enlarges the limited scope of review, and that matters already adjudicated cannot be reopened through reiteration of arguments or apprehension of financial consequences.

Copyright Mettis Link News