LHC moved against Punjab agricultural tax increase

A constitutional petition has been filed in the Lahore High Court challenging the Punjab government’s increase in agricultural income tax rates, with petitioners alleging the revisions were introduced without mandatory legislative approval.

The petition was jointly filed by opposition MPA Ijaz Shafi and the Judicial Activism Panel through Advocate Azhar Siddique.

According to the petition, the provincial government revised agricultural tax rates through executive notifications despite legal provisions requiring such changes to be presented before the Punjab Assembly during the annual budget process.

The plea states that Section 11(2) of the Punjab Agricultural Income Tax Act, 1997, as amended in 2024, makes it mandatory for any revision in agricultural income tax rates to receive legislative consideration and approval.

The petitioners argued that the impugned notifications were issued in violation of constitutional provisions, including Articles 4, 9, 19-A, 25, 38, 77 and 127, maintaining that taxation powers cannot be exercised solely through executive action without parliamentary oversight.

Citing the Mustafa Impex case, the petition contends that the authority to determine tax rates is a legislative function and cannot be delegated arbitrarily to the executive branch.

The plea further alleges that the revised taxation measures have imposed an unconstitutional and discriminatory burden on the agricultural sector, adversely affecting farmers and rural economic stability.

The petition seeks suspension of tax recovery proceedings, withdrawal of the challenged notifications and a refund of amounts allegedly collected unlawfully under the revised tax regime.

It also requested the court to direct authorities to disclose all communications with the International Monetary Fund and produce complete records of agricultural income tax collection since July 2025.