DG KHAN CEMENT COMPANY LIMITED vs The FEDERATION OF PAKISTAN through Secretary Revenue Islamabad S

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DG KHAN CEMENT COMPANY LIMITED VS The FEDERATION OF PAKISTAN through Secretary Revenue Islamabad S. 4C & First Sched., Part I, Division. IIB---Constitution of Pakistan, Arts. 25, 73, 80 & Fourth Sched., Part I, Entry No. 47---Super tax imposed on high earning persons---Constitutional validity---Fiscal policy---Judicial review of fiscal statute---Scope---Whether Section 4C of the Income Tax Ordinance, 2001 was intra vires the Constitution?---Held: Constitutionality of a fiscal statute is tested on whether it is passed by the competent legislature, is not confiscatory and is not discriminatory---Legislative competence of Parliament to enact Section 4C had been upheld by all three High Courts and was not seriously in question---Section 4C fell within Chapter II of the Ordinance and therefore within the statutory conception of tax under Section 2(63), while income was defined in Section 2(29) in expansive and inclusive terms---Section 4C was a self-contained charging provision imposing super tax on every person on income as defined in subsection (2), for tax year 2022 and onwards, at the rates prescribed in Division IIB, Part I, First Schedule to the Ordinance---Budgetary context showed that the legislature took a policy decision to bridge a revenue shortfall through a new direct charge on high earning persons rather than through further indirect taxation on the common citizen---Whether such fiscal judgment was wise or unwise was not a matter for the Court, and reasonableness of legislative policy was beyond the pale of judicial review save where it trespassed constitutional limits---Taxpayers were commercial entities operating as going concerns and had not demonstrated any real or practical incapacity to discharge the super tax---Hardship and inconvenience were not grounds upon which a tax could be invalidated---Section 4C was validly enacted as a tax on income and was intra vires the Constitution.

DG KHAN CEMENT COMPANY LIMITED vs The FEDERATION OF PAKISTAN through Secretary Revenue Islamabad S — 2026 PLD 168 FEDERAL-CONSTITUTIONAL-COURT

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