Banks have regular windfall income from dealing in foreign currencies – oxymoronic treatment by SRO. 1588(I)/2023 dated 21.11.2023.

In Pakistan, Federal Board of Revenue (FBR) is de facto legislature (sic) in tax matters. This reflects on the sheer incompetence of our so-called elected legislators (sic) sitting in the Parliament. They merely act as rubber stamp in tax legislation.

In utter violation of Article 77 read with Article 162 of the Constitution of Islamic Republic of Pakistan [“the Constitutions], Money Bills are introduced in the National Assembly.

Even the President of Pakistan, as symbol of federation, is unaware of his powers and role in tax legislation under Article 162 of the Constitution. Consequently, many unconstitutional amendments in the tax laws are introduced giving unbridled and unfettered powers to Revenuecracy to continuously destroy the economy and fleece the poorest of the poor through oppressive indirect taxes.

Members of Parliament have committed the most heinous crime by granting delegation (excessive and unconstitutional) of essential legislative powers to Revenuecracy—a blatant and brutal violation of Article 77 read with Article 162 of the Constitution. This is abdication and not delegation of powers, permissible under the supreme law of the land. Its worst example has surfaced in the form of section 99D, inserted in the Income Tax Ordinance, 2001[“the Ordinance”] vide Finance Act, 2023 that reads as under:

99D. Additional tax on certain income, profits and gains.– (1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, for any of the last three tax years preceding the tax year 2023 and onwards, in addition to any tax charged or chargeable, paid or payable under any of the provisions of this Ordinance, an additional tax shall be imposed on every person being a company who has any income, profit or gains that have arisen due to any economic factor or factors that resulted in windfall income, profits or gains.

(2) The Federal Government may, by notification in the official Gazette, –

(a) specify sector or sectors, for which this section applies;

(b) determine windfall income, profits or gains and economic factor or factors including but not limited to international price fluctuation having bearing on any commodity price in Pakistan or any sector of the economy or difference in income, profit or gains on account of foreign currency fluctuation;

(c) provide the rate not exceeding fifty percent of such income, profits or gains;

(d) provide for the scope, time and payment of tax payable under this section in such manner and with such conditions as may be specified in the notification; and

(e) exempt any person or classes of persons, any income or classes of income from the application of this section, subject to any conditions as may be specified in the notification.

(3) The Federal Government shall place before the National Assembly the notification issued under this section within ninety days of the issuance of such notification or by the 30th day of June of the financial year, whichever is earlier.

No right of appeal has been provided in section 99D of the Ordinance, which is a clear and blatant infringement of fundamental rights guaranteed under Article 10A of the Constitution.

The Supreme Court of Pakistan in the Mehram Ali and others v FOP PLD 1998 Supreme Court 1445 held that any statute denying at least one right of appeal by an independent court/tribunal is ultra vires the Constitution:

“That the right of “access to justice to all” is a fundamental right, which right cannot be exercised in the absence of an independent judiciary providing impartial, fair and just adjudicatory framework i.e. judicial hierarchy.

The Courts/Tribunals which are manned and run by executive authorities without being under the control and supervision of the High Court in terms of Article 203 of the Constitution can hardly meet the mandatory requirement of the Constitution.“[Para 11(vi), Page 1477]

The principle of ‘audi alteram partem’ is one of the foundational principles of natural justice, also lacking in this levy. Supreme Court of Pakistan in the Federal Government Employees Housing Authority v Ednan Syed and others PLD 2025 Supreme Court 11 held:

“Furthermore, Article 10A of the Constitution requires that everyone is entitled to a fair trial and due process, which includes the basic right to be heard.

The principle of audi alteram partem is one of the foundational principles of natural justice. It necessitates the requirement of being heard so that the judicial order reflects the contention of every party before the Court. To fulfill the requirements of being heard, it is settled that the relevant party must be issued first a notice and then be allowed a hearing. These two........

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