ISLAMABAD: The Federal Constitutional Court (FCC) on Monday delivered a major verdict in favor of corporate taxpayers, declaring the adjustment of tax credits against super tax to be legal under the law, ARY News reported.
Justice Aamer Farooq authored a detailed, six-page verdict. The court accepted an appeal filed by a mobile phone company, setting aside an earlier Islamabad High Court (IHC) judgment that had dismissed the company’s petition.
Annulling the Islamabad High Court’s ruling, the apex court stated that tax credits obtained through filing and deductions can be legally adjusted against the super tax.
According to the judgment, a tax credit under Section 168 is a separate and established legal right; forcing taxpayers into seeking refunds by blocking adjustments runs contrary to the spirit of the law.
The judgment emphasized that financial laws should always be interpreted to benefit and facilitate the taxpayer.
Consequently, the court ordered the Federal Board of Revenue (FBR) to review the taxpayer’s adjustment claim in response to the notice.
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The FBR had previously issued a notice to a private mobile company for the payment of super tax, prompting the company to approach the IHC, where its initial petition was rejected.