The Federal Constitutional Court (FCC) on Monday ruled that adjusting tax credits against super tax is lawful, setting aside an Islamabad High Court decision and allowing appeals filed by private mobile operator Zong.
The court said preventing a taxpayer from making an adjustment and forcing it to seek only a refund was against the intention of the law.
In a significant ruling in favour of corporate taxpayers, the court held that super tax could be adjusted against tax credits received on filing and tax deductions.
Justice Aamer Farooq authored the six-page detailed judgement. The court said a tax credit available under Section 168 of the law was a separate and recognised legal right.
The judgement stated that financial laws should generally be interpreted with the benefit and convenience of taxpayers in mind.
The court directed the Federal Board of Revenue to examine the taxpayer’s claim for adjustment and make a decision in accordance with the law.
The FBR had issued a notice to the private mobile company seeking payment of super tax. Zong had approached the Islamabad High Court (IHC) seeking permission to adjust its tax credit against the liability, but the high court had dismissed the petition.
The Federal Constitutional Court has now set aside that decision and accepted Zong’s appeals.
