Agri tax increase challenged in Lahore High Court

LAHORE: A petition has been filed in the Lahore High Court challenging the increase in agricultural tax in Punjab, with the petitioners arguing that the revision was made without the legislative approval required under the law.

The joint petition was moved by opposition MPA Ijaz Shafi and the Judicial Activism Panel through Advocate Azhar Siddique. It contends that the provincial government unlawfully revised agricultural income tax rates and bypassed the constitutional role of the Punjab Assembly in the process.

According to the petition, Section 11(2) of the Punjab Agricultural Income Tax Act, 1997, as amended in 2024, requires any change in tax rates to be placed before the provincial assembly at the time of presentation of the annual budget. The petitioners maintain that this mandatory legal requirement was not fulfilled by the provincial executive.

Constitutional objections raised

The petition argues that the notifications under challenge are in conflict with Articles 4, 9, 19-A, 25, 38, 77 and 127 of the Constitution. It says taxation cannot be imposed or altered through executive action in the absence of legislative sanction, transparency and constitutional oversight.

It also relies on constitutional jurisprudence, including the Mustafa Impex case, and argues that the authority to determine tax rates is a core legislative function that cannot be delegated arbitrarily to the executive branch.

The petitioners further submit that the agricultural community has been subjected to discriminatory and unconstitutional taxation measures. They argue that the increase has adversely affected farmers’ livelihoods, economic stability and legitimate expectations protected under the Constitution.

Reliefs sought from the court

In their plea, the petitioners have asked the court to order disclosure of all communications with the IMF related to the matter. They have also sought production of the complete record of tax collection since July 2025.

Besides this, the petition seeks suspension of recovery proceedings, withdrawal of the impugned notifications and refund of amounts that, according to the petitioners, were collected unlawfully.

The petition also asks the Lahore High Court to set aside the notifications in question on the grounds that they are unconstitutional.

The case centres on whether the increase in agricultural income tax was introduced in accordance with the procedure laid down in the Punjab Agricultural Income Tax Act and within the constitutional framework governing taxation powers. The petitioners’ position is that any such revision required presentation before the assembly as part of the budget process, and that failure to do so rendered the executive action legally defective.

The matter has brought before the court questions relating to legislative authority, executive powers and the legal validity of tax notifications affecting the agricultural sector in Punjab.