The gravest error in the FCC’s order lies in its implicit acceptance that the term ‘income’, as envisaged under the Constitution of the Islamic Republic of Pakistan (“the Constitution”), itself can be varied through sub-legislative sleight of hand. This proposition strikes at the heart of tax jurisprudence. ‘Income’ is not whatever Parliament declares it to be for revenue purposes. It is a juridical and economic concept with settled contours: real accrual, real receipt, and real capacity to pay, and legitimate legal fiction for income, place, person, and time under the doctrine of nexus, but not in violation of any provision of the Constitution—When Income Is Taxed Twice: Constitutional Limits And The Super Tax Debate, Friday Times, February 7, 2026

Pakistan’s tax jurisprudence is at a critical inflexion point. The recent judgment of the Islamabad High Court in M/s CM Pak Limited v. Federation of Pakistan has done more than uphold the levy of super tax under section 4C of the Income Tax Ordinance, 2001—it has, by endorsing the Federal Constitutional Court’s short order, effectively redrawn the constitutional boundaries of taxation. At stake is not merely the validity of a fiscal measure, but whether the Constitution permits multiple taxes on the same taxable event (income) without limit, as non-adjustment of advance taxes and established refunds against super tax.

A holistic reading of the Islamabad High Court (IHC) judgment reveals a deeper legal infirmity. While adopting the reasoning of the Federal Constitutional Court (FCC) of Pakistan on constitutional validity, the Court failed to examine the statutory framework governing the adjustment of taxes already paid, which are refundable if more than the admitted liability. In doing so, it has not merely endorsed a controversial constitutional interpretation—it has overlooked binding provisions of the Income Tax Ordinance itself.

The petitioner had expressly pleaded that the amount of Rs. 89,640,124, paid under protest, be refunded or adjusted against future tax liabilities. The Court reproduced this prayer but declined to adjudicate upon it, not to speak of allowing it as a right of the taxpayer. This omission is not procedural—it is foundational.

Sections 4C(5A), 147(10) and 170(3)(a) of the Income Tax Ordinance, 2001 [“Ordinance”] form an integrated statutory scheme that governs the fate of excess tax payments. Section 4C(5A) explicitly applies section 147 (advance tax payment) to super tax.

Section 147(10) mandates that excess tax shall be refundable or adjustable. Section 170(3)(a) reinforces this command by requiring the Commissioner to refund or adjust any excess payment. The statutory language is unequivocal and admits no discretion.

The IHC judgment does not even advert to these........

© The Friday Times