Karachi, February 20, 2025 – The Sindh High Court (SHC) has rejected petitions seeking interim relief against the imposition of the Windfall Income Tax, upholding the legal standing of the controversial levy.
A division bench of the SHC dismissed the petitions challenging the constitutionality of Section 99D of the Income Tax Ordinance 2001, as well as SRO 1588(I)/2023, which was issued on November 21, 2023, to enforce the tax.
The SHC stated that for reasons to be recorded, the petitions, along with all pending applications, stand dismissed. This decision reinforces the applicability of the Windfall Income Tax, which has faced opposition from various business entities and stakeholders.
During the hearing, the petitioners’ counsel made an oral motion requesting the court to suspend its order for a period of one month. The counsel argued that interim relief had been granted in these petitions since 2023, referencing an interim order dated December 7, 2023, in CP D 5741 of 2023 and other connected cases. The prior interim orders had suspended the implementation of SRO 1588(I)/2023, effectively halting the enforcement of the Windfall Tax.
However, the SHC bench denied the oral motion, emphasizing that granting such relief would effectively reinstate the previous interim suspension, contradicting the court’s ruling. The SHC referred to multiple Supreme Court judgments, which have consistently discouraged the practice of granting interim orders that suspend laws, particularly in revenue-related matters. The court highlighted established precedents, including cases such as Aitzaz Ahsan, Aijaz Jatoi, and Dunlop, as well as a recent Supreme Court ruling in the Pakistan Oilfields case, all of which underscore the principle that interim relief should not be used to nullify statutory provisions.
In light of these precedents, the SHC ruled that granting the oral motion would contravene the Supreme Court’s directives. Therefore, the SHC refused to extend the suspension period, thereby allowing the government to proceed with the enforcement of the Windfall Income Tax.
The decision marks a significant development in Pakistan’s taxation landscape, as businesses affected by the Windfall Tax now have limited legal recourse following the SHC’s dismissal of the petitions. The ruling reinforces the judiciary’s stance on upholding fiscal regulations and prevents the undue suspension of taxation laws through interim measures.