Mistaken Credit to a Bank Account: Legal Position

Taxation, constitutional legitimacy & fiscal justice The previous Part VII of this series traced the contributions of Abu Yusuf, Al-Ghazali, Ibn Taymiyyah, Al-Maqrizi and Ibn Khaldun to public finance and political economy. Their works differed in purpose and historical setting, but a common normative framework emerged: justice in public burdens, accountability of authority, consultation in collective decisions, protection against arbitrary appropriation, honest exchange, responsible administration of public resources, wider circulation of wealth and protection of vulnerable citizens. These principles do not provide a ready-made tax code for a modern federation. They offer something more fundamental: standards by which taxation, expenditure and public authority may be judged. The same standards find expression in the constitutional order of Pakistan. Taxation is not legitimate merely because money is required by the state or because a provision has been inserted into a Finance Act. Parliament possesses wide legislative authority, but it is a creature of the Constitution and not its master. It cannot validly enact what the Constitution prohibits, invade a field constitutionally assigned elsewhere or destroy rights and limitations that bind every organ of the state. The proposition appears elementary. Pakistan’s fiscal practice repeatedly ignores it. Article 77 of the Constitution provides that no federal tax shall be levied except by or under the authority of an Act of Parliament. This embodies the historic principle of no taxation without representation. Revenue cannot be extracted through executive preference, administrative instruction or unstructured discretion. Legislative authority must exist. Article 77 is a necessary condition for lawful taxation, not a complete test of constitutional legitimacy. A tax enacted by Parliament must also conform to the distribution of legislative powers, equality before law, due process, protection of property and other constitutional guarantees. Parliamentary form cannot cure substantive constitutional defect. Otherwise, the requirement of constitutional supremacy would be reduced to the proposition that Parliament may do anything so long as it records the command in statutory language. Pakistan is not governed under parliamentary sovereignty in the British sense. It is governed under a written and supreme Constitution. Legislative authority is not unlimited authority The Constitution divides taxing powers between the Federation and provinces. Parliament cannot convert a provincial subject into a federal one merely by changing its label. A levy upon capital value cannot automatically become income tax because it is placed in the Income Tax Ordinance, 2001. A tax upon services cannot be extended to transactions lacking the character of a service merely because additional revenue is desired. The true nature, subject matter and effect of the levy remain decisive. This is particularly important because fiscal pressures create incentives to stretch legislative entries beyond their constitutional purpose. Governments confronting debt servicing, defence expenditure and programme targets naturally seek accessible revenue. Constitutional limitations exist precisely because necessity, convenience and expediency cannot be allowed to determine the boundaries of public power. A Constitution does not become less binding when the treasury is empty. The Supreme Court’s jurisprudence has recognised that Parliament’s taxing competence, though broad, is not without constitutional limits. In Elahi Cotton Mills, the Court accepted substantial legislative latitude in taxation, including the use of legal fictions, classifications and presumptive methods. It also made clear that the legislature cannot tax as “income” something that cannot rationally possess the character of income. The breadth of a legislative entry does not eliminate its essential subject matter.  The same discipline must govern every fiscal enactment. Equality is not arithmetical uniformity Article 25 guarantees equality before law and equal protection of law. Equality does not require every person, transaction or source of income to be taxed identically. Legislatures may classify taxpayers and activities where a real distinction exists and the classification bears a rational relationship to the purpose of the law. The power to classify cannot become a licence to privilege. Pakistan’s tax system contains numerous distinctions based upon source, status, sector, documentation and bargaining power. Salary, dividends, profit on debt, business income, contracts, imports, property income and capital gains are frequently subjected to different rates and regimes. Some differentiation may be justified by collection realities or constitutional allocation. Much of it has emerged through political accommodation rather than coherent principle. A constitutional analysis must therefore ask whether similarly situated persons are treated alike, whether distinctions correspond to genuine economic differences, and whether the burden imposed is reasonably connected with the stated objective. Higher transactional taxes upon “non-filers”, for example, are presented as instruments of documentation. Their constitutional and economic legitimacy becomes doubtful when they operate indefinitely as revenue measures without determining actual income, establishing liability or bringing the person into a genuine assessment system. A temporary incentive to file cannot become a permanent substitute for income taxation. Due process in fiscal administration Article 4 protects the right of every person to be dealt with in accordance with law. Tax administration must consequently involve more than statutory authority to demand money. Liability must be determined through fair procedures, relevant evidence, a meaningful opportunity to respond and access to independent adjudication. Automated notices, coercive recovery, attachment of accounts, blocked refunds and repeated demands without proper examination undermine this constitutional relationship. Technology does not suspend due process. Digital systems can improve matching, risk identification and transparency. They cannot transform an algorithmic suspicion into established liability. The taxpayer must know the basis of the demand, confront the material relied upon and obtain a reasoned determination from a legally competent authority. A revenue system that collects first and examines legality later converts constitutional administration into fiscal compulsion. The Supreme Court’s judgment in Mustafa Impex also reinforced the constitutional identity of executive authority. Statutory powers assigned to the Federal Government cannot automatically be exercised by an individual minister, division or official unless the constitutional and statutory framework permits it. Fiscal measures made through notifications and delegated authority must remain within the limits imposed by the parent legislation and the constitutional structure of government.  Delegation may supply machinery. It cannot create a new taxable event, enlarge the charge or transfer essential legislative choices to the executive. Property,

Bio: Hamza Tareen is a student at LUMS majoring in Political Science, with a keen interest in philosophy and theology. ‘I am utterly overwhelmed; the deluge of quizzes is beyond my capacity,’ my friend slowly sighed as his head drooped in exhaustion. Students across the country nurse dreams of pursuing higher education in premier institutes such as the likes of LUMS or IBA. They navigate the rigorous selection process, pay exorbitant fees and, when they finally clinch admission, little do they anticipate the stringently demanding atmosphere that would exact a heavy toll on their mental health. Those who get into these prestigious universities are students who have already demonstrated exceptional academic excellence, and, unsurprisingly, they formulate a highly ambitious criterion for defining success, i.e., consistently acing their courses. However, since the assessment follows a bell-curve distribution which evaluates performance relative to peers, the grading is highly competitive and only a small proportion land in the A/A- categories. This not only fails their expectations but plunges them into depression as they call into question their academic capabilities and self-worth. And, to top it off, peer pressure, which is ever pervasive in the culture, further complicates the problem. It would be tempting to label setting unrealistic expectations as the sole culprit; but the elephant in the room is something else. It is the culture that continuously pushes students to the brink of burnout and brands it as ‘academic rigor.’ From having interminable quizzes, assignments and mid/final exams to being expected to excel in four/five different courses simultaneously, the pressure is intense. And students are expected to somehow manage it all—along with carving out time for extracurriculars and social life. University is not all about academics, and there are a multitude of other problems that students steer through during the semester. But, to their dismay, they are assumed to carry through it all. Justified it would be to say that by the end of the term, they are sapped of all strength, teetering on the precipice of collapse. It is a well-researched—and unfortunate—fact that depression and mental health problems abound in elite universities. The aforementioned factors, coupled with other personal and social challenges that characterize this phase of students’ academic journeys, become a crucible of pressure for them. They stumble, totter, and fall into a shroud of uncertainty. And, lamentably, the stigma associated with seeking help or counselling multiplies the problem. Mental health is stigmatized as something alien, suited for the ‘feeble.’ Amidst these circumstances, the onus falls upon the administration. Supportive counselling sessions which help students in threading their way through university life and academics are crucial; dedicated mental wellness centers need to be introduced, encouraged and endorsed; and students should be empowered to zoom in more on learning than deriving their self-worth from grades alone. This does not mean exhibiting apathy towards academic performance, but a reorientation of priorities which do not impede their growth and self-esteem. Finally, a reconsideration and reassessment of balancing academic rigor with students’ well-being is indispensable on the part of the administration. Mental well-being will naturally translate into more productivity.

Let me begin where every honest sentence on this subject must begin: I condemn, without reservation, the murder of Mir Raza Ali, the 25-year-old founder of Karachi’s beloved dessert brand Wafflix. He left his home before dawn on July 28, 2026, telling his mother he would return in ten minutes. He never did. His body was found the next day in the bushes of Gulistan-e-Jauhar, bearing torture marks and a gunshot wound. Eighteen days later, his family still waits for the truth, and I appeal — as every citizen should — for a swift, transparent investigation and justice for his killers. Nothing that follows in this essay is meant to diminish that grief. It is meant to sit beside it, uneasily, and ask why our grief is so selective. Because for eighteen days now, Pakistan’s television screens have offered something close to a live tribunal. Home Minister Zia Ul Hassan Lanjar and Inspector General of Police Javed Alam Odho face anchors nightly. Forensic reports are dissected line by line. Postmortem findings, CCTV timelines, taxi records — every fragment of evidence is turned over on air with a rigor that would not embarrass The Hague. I do not begrudge this scrutiny; a young man is dead and the public deserves answers. But I confess, with something between astonishment and despair, that I cannot recall our media applying this same forensic hunger to the killing of the country’s economy. Even the assassination of former Prime Minister Benazir Bhutto in 2007 — an event that reshaped this nation’s political history — did not receive this level of daily, granular dissection. Nor, in truth, did the world’s own gold standard for high-profile scrutiny, the 2018 murder of journalist Jamal Khashoggi inside the Saudi consulate in Istanbul, sustain eighteen straight days of forensic-audit-level coverage in the country that lost him. So where is that same appetite for NEPRA and CPPA? Here is what nobody puts on a talk show: over the past three years, dozens of Pakistanis — an elderly widow in Gujranwala, a mother of four in Jahanian, a young man in Faisalabad, a payphone operator in Peshawar — have taken their own lives after receiving electricity bills they could not pay. These were not abstractions. They were documented, named, buried. And yet no anchor has spent eighteen consecutive nights asking the chairman of NEPRA why. No panel has summoned the CEO of the Central Power Purchasing Agency to explain, plainly, in language a shopkeeper in Bahadurabad could understand, why this country of 260 million people pays some of the region’s highest power tariffs while its own regulator’s reports describe capacity sitting idle. Where is the media trial of the men who told us, from 2014 to 2018, that imported coal would be Pakistan’s “game changer,” and of the former prime minister who made the same promise about LNG-fired plants? Those promises are now line items in a debt-trapped economy, in a nation reduced, again and again, to a global begging bowl. But no one is asked to answer for them on camera. They sit, as it were, behind a veil — while the Director General of ISPR and the Chief of Defence Forces routinely stand before microphones and take hard questions. Why can Pakistan’s military spokesmen face the public, but not the men who set the price of electricity for every household in the country? I want to be precise, not merely aggrieved, so let me offer what I found when I went looking myself. CPPA-G’s own energy purchase data for May–June 2026 shows three nearly identical imported-coal plants — Huaneng Shandong Ruyi at Sahiwal (1,244 MW), China Power Hub in Balochistan (1,249 MW), and Port Qasim in Karachi (1,243 MW) — dispatched at wildly different rates. Huaneng ran at roughly 73 percent of capacity; Port Qasim at only 36 percent; China Power Hub at a mere 24 percent — this despite Huaneng being, by current fuel charges, the most expensive of the three at roughly Rs. 20.38 per unit, against Rs. 15.12 for Port Qasim and Rs. 16.09 for Hub. If Pakistan’s Economic Merit Order genuinely governed dispatch, the cheaper southern plants should be running harder, not idling at a quarter of their design capacity. Something else is deciding who generates and who doesn’t — transmission bottlenecks, take-or-pay contract terms that favor Sahiwal, or simple operational failure at Hub, whose output fell 37 percent in a single month. Whatever the cause, Pakistani consumers are still paying full capacity charges for roughly 760 to 940 idle megawatts at each underused plant — fixed costs for electricity that was never produced, quietly folded into tariffs nobody explains on air. This is not a call to relent on Mir Raza Ali. It is a plea that the same courage be extended elsewhere. I am not asking media to abandon one grieving family; I am asking whether this nation’s curiosity has been rationed, aimed carefully at the stories that move ratings but never at the ledgers that move our poverty. Who decides that a private tragedy in Gulistan-e-Jauhar deserves eighteen days of forensic television, while a public catastrophe costing every household thousands of rupees a month deserves none? Is there a veil, a ghost hand, guiding our screens away from NEPRA’s boardroom and toward whatever is easier to sell? My request to Pakistan’s media is respectful, not accusatory: summon the chairman and members of NEPRA and the CEO of CPPA, and ask them, on camera, to explain the dispatch logic behind May and June’s generation data, to quantify what idle capacity is costing consumers per unit, to say plainly whether transmission constraints are forcing reliance on costlier northern plants while cheaper southern capacity sits dark, and to commit to passing any findings transparently through the Fuel Charges Adjustment mechanism, as the NEPRA Act itself demands. Pakistan is the fifth most populous nation on earth, and yet the men who preside over its power sector — the chairmen and members of NEPRA and OGRA, the leadership

Vice President Pakistan-China Joint Chamber In the early 1990, when Chinese Government planned to develop the most modern city of the world at the south eat coast of China, named Shenzhen, the Government named it as the window of the world. In the modern history it is the most advanced, beautiful and well-planned city in the world with its population reaching almost 18 million. Along, Shenzhen GDP is bigger than the GDPs of many countries. Similarly, after the Chairman Xhi announced his initiative to develop for a global trade in the name of Belt and Road Initiative (BRI) which is considered to be the biggest financial project globally. In respect to active this project the initiative of CPEC as a flagship project of BRI was taken. Pakistan with its most sage borders with its neighboring countries China is also the key part of this initiative. Considering my experience to travel to China using a road link was started from the small city of Pakistan name coast. Which is even more than like 200 km from the border of the Khunjarab which leads you to enter to the new window of the world which is starting from the south west of China. Directly you pass the immigration process at Tashgorqan, you will feel the things have been entirely changed. My first inspiration was this city for its cultural background buildings, music, food, that totally fascinated me. I was just in the middle ages where there was a very beautiful city to welcome me with all its cultural strength. The city is even smaller like a country of Kashgar but still you can see the international food chains along with a lot of local delicacies. The ethnic people are mainly Chinese and Tajik origin. This city is similarly famous for the yolk beef. And that was my first feast tried at this city. The visitors of the city were even more than the locals who came from all over China to observe the rich culture of this city. Even I spent there few hours but the fascination, beauty and culture of this city will definitely attract me to visit it again. The roads were wide, clean, infrastructure was excellent, like a combination of an old civilization with modern infrastructure. If a got a chance in the future I would love to stay in this city significantly marking the importance of this city even in the ancient time till today. This was the first settlement as a city I found on my way to the Khunjarab border to tashgorqan. The people were very friendly, beautiful and they showed a lot of love not only fore me but for the all visitors. Such a small city with a rich culture for their dressing, music and traditional dance can fascinate anyone. Kashgar is about 5 hours drive from Tashgorqan. Being the second largest city of Xinjian, this city is I may call a new window of the world. Kashgar city which is normally a called as Kashi by Chinese is an inspiration. This city which was formally very undeveloped like a couple of decades before now have become a center of financial activities under the BRI. With its specific location along with the silk route the locals of Kashi claims that this city have a history to 2000 to 5000 years old. I have never observed a city like Xinjiang with such a remote area and having the ethnic communities for more than 13 including Yugur, dominating Han, Tatar, Tajik, Karghaiz, Mangol and many other are among the most prominent ethnic nationalities living in this city. This diversified this city as a multicultural hub.   China Government is very concerned and they are really developing this area with all the available resources they can inject. Within a decade of time Kashi is now one of the modern cities developing with the gigantic speed and its bordering with the countries like Kirghizstan, Pakistan, Afghanistan, and Tajikistan. With its population increasing ofr more than 6 million people is one of the biggest city in all this region. Yecheng as a county of Xinjiang, is considered to be a window to Tibet all that, who want to start their expedition to Tibet, they have to start from this city name , Yecheng. I got an opportunity to visit his small city which is similarly fascinating, I should appreciate this all areas are culturally being so rich that every building and every road is telling a new story about this city. What attracted me the most that was the food and the dancing culture of this city with some fascinating music. This area is rich for its dry fruits where you can see the most variety of dry fruits in the world. Yecheng is considered to be a capital city of walnuts. Coming back of Kashi which is my topic of the day, everybody can spend hours and hours to have a look at the rich culture. The Government have preserved the buildings and most of them have been converted into historical places mostly are called in the name of Mehman Khana (Hotel). The walled city of Kashgar is one of the top most attraction for any foreigners and mainland Chinese. Now the Kashi economy is mainly based on tourism as the Chairman Xhi announced in his last speech as tourism and health sector would be the main focus of Chinese Government. The streets of Kashi were swarming with the Chinese from all provinces who were eager to learn more about the history and culture of this region.   To be continued..

The preceding part of this series examined a question ordinarily left outside discussions on riba: who should create money? It argued that commercial-bank money creation is not, by itself, riba, but that the power to create purchasing power through credit is a matter of public importance requiring transparency, restraint and accountability. One possible reform is to separate transaction money, fully backed by sovereign money, from funds deliberately committed for investment. That proposition leads to an even more fundamental question. What exactly is a bank deposit? The answer appears obvious only because modern banking has merged several economically different relationships into the same institution. A person places salary in a current account because it must be available tomorrow morning. Another person places accumulated savings with a bank hoping to earn a return over five years. A business maintains money for payroll and suppliers. An investor deliberately commits capital to a project knowing that commercial gain is accompanied by the possibility of loss. Calling all these balances “deposits” conceals distinctions that become crucial in a financial order seeking to eliminate riba. There is a basic difference between money and investment. Money held for payment performs the functions of medium of exchange and store of nominal value. Its owner expects Rs.100 deposited today to remain Rs.100 tomorrow and to be transferable on demand. Investment capital performs another function. It is consciously placed in productive activity in expectation of gain and consequently bears the possibility of commercial loss. One cannot logically demand both absolute safety and entrepreneurial return from the same contractual relationship unless somebody else is made to carry the risk. Islamic jurisprudence recognised these distinctions long before modern banking. Funds entrusted purely for safekeeping can constitute amanah. A trustee does not own them and is not ordinarily liable for loss occurring without negligence or misconduct. Where fungible money is transferred to another person with authority to use it and an obligation to return its equivalent, the relationship acquires the character of qard, or loan. State Bank of Pakistan’s own glossary reflects precisely this reasoning. It describes an amanah as property held in trust and states that current accounts may initially be regarded as trust deposits. Once a bank obtains authority to use current-account funds in its business, however, the relationship becomes a loan because the bank must repay the full amount. This point deserves much greater attention. If a bank accepts Rs.100,000 from a customer, is free to use that money for its own financing operations and remains legally bound to repay Rs.100,000 whenever demanded, the customer is not bearing an investment risk. Whatever terminology appears on the account-opening form, economically the bank has received financing from the customer. No difficulty necessarily arises if the customer receives nothing beyond repayment of the amount advanced. The difficulty arises when banking system treats this repayable-at-par money simultaneously as the raw material from which additional financing and monetary claims can be generated. Part II suggested one possible solution: transaction accounts should be treated entirely differently. A current account used for wages, household expenditure, business payments and ordinary transfers should represent protected transaction money. If such balances are fully backed by sovereign money or central-bank reserves, they need not be exposed to the bank’s commercial financing decisions. The account holder would possess money, not an investment claim upon the success of a bank. The bank would provide custody, payments, transfers, cards, digital access and settlement services. It could legitimately charge transparent fees for those services. What it would not receive is free investment capital merely because citizens require access to a payment system. The consequences are significant. Fully backed transaction accounts would remain available on demand and at par. They would not earn an investment return because their owners have assumed no investment risk. Nor would their repayment depend upon the quality of the bank’s commercial portfolio. This is not merely a theological distinction. Modern central banking itself recognises the peculiar character of bank deposits. The Bank of England recently described commercial-bank deposits as liabilities used as money, expected to be redeemable at par on demand and relied upon as a safe store of value. It contrasted them with investment products whose values fluctuate and whose losses are borne by investors. A riba-free financial system should take that distinction seriously. The second category would consist of genuine investment accounts. Here the relationship is entirely different. A customer does not merely park money awaiting payment instructions. He consciously makes capital available for investment and accepts that lawful profit cannot be separated completely from commercial risk. Mudarabah provides one classical framework. One party supplies capital and the other enterprise and expertise. Profit is divided according to an agreed ratio; financial loss, in the absence of negligence or breach by the manager, falls upon the provider of capital. SBP itself explains Islamic investment deposits on this basis: the depositor acts as rabb-ul-maal and the bank as mudarib. Restricted mudarabah allows the investor to specify where the funds may be deployed; unrestricted mudarabah gives the bank wider investment authority. The principle is straightforward. If the depositor wants profit because capital is being employed commercially, the depositor must understand what capital is doing and what risk attaches to it. This is where present banking practice requires closer examination. Islamic banks commonly pool deposits, calculate weighted-average yields and distribute profits under elaborate regulatory rules. SBP presently prescribes profit-distribution arrangements for savings depositors, including minimum distribution requirements linked to the weighted-average gross yield of the institution. It also permits additional hiba in specified circumstances. These measures protect customers against inequitable allocation of profits by banks. Their consumer-protection purpose is understandable. At the same time, an increasingly managed and smoothed return can create in the depositor’s mind an expectation remarkably similar to a conventional savings rate. The crucial question is not whether the return happens to fluctuate by a few basis points. It is whether the depositor actually bears the economic character of an investor. An investment account should identify the pool in

Pakistan’s growing diplomatic influence has entered a new phase as Prime Minister Muhammad Shehbaz Sharif and Field Marshal Syed Asim Munir lead the country’s strategic engagement with the world, strengthening alliances and projecting Pakistan as an important voice in regional peace and security. The signing of the Makkah Joint Defence Agreement between Pakistan, Saudi Arabia and Türkiye represents a major milestone in Pakistan’s foreign and security policy. The agreement brings together three influential nations through a framework of collective defence, enhanced military cooperation and a shared commitment to regional stability. In recent months, Pakistan’s defence capabilities and strategic importance have received increased international attention. The role of the Pakistan Army in national security and regional stability has been a central factor in shaping Pakistan’s strategic partnerships, while Field Marshal Syed Asim Munir’s engagement with international counterparts has highlighted the importance of defence diplomacy in promoting peace and cooperation. The global perception of Pakistan’s strategic role has evolved as Islamabad has continued to demonstrate its capacity to engage with major powers and regional stakeholders. Under Field Marshal Asim Munir’s leadership, Pakistan’s military diplomacy has focused on strengthening partnerships, supporting stability and advancing dialogue as a pathway to resolving regional challenges. Prime Minister Muhammad Shehbaz Sharif has complemented these efforts through active diplomatic outreach, engaging world leaders and strengthening Pakistan’s relationships with key allies. Whenever Pakistan’s leadership has engaged internationally, these visits have increasingly focused on expanding cooperation, improving economic ties and promoting peace initiatives. Pakistan’s diplomatic role in encouraging dialogue during tensions involving the United States and Iran also attracted international attention. US President Donald Trump acknowledged Pakistan’s leadership efforts in supporting peace and dialogue, reflecting the country’s potential role as a constructive bridge between nations. Pakistan continues to maintain strong strategic relations with major international partners, including China, while also enjoying deep historical and security ties with Saudi Arabia, Türkiye and other Middle Eastern countries. Iran has repeatedly highlighted the importance of its relationship with Pakistan and recognised the value of regional cooperation. The Makkah Declaration further strengthens this strategic momentum. The agreement reflects the shared commitment of Saudi Arabia, Türkiye and Pakistan to collective security and regional stability. It establishes that any armed attack against one of the three states will be regarded as an attack against all, while enhancing defence cooperation, military coordination and strategic collaboration. Built on historic relations, Islamic solidarity and common interests, the declaration aims to strengthen collective deterrence and contribute towards peace, security and prosperity. The emerging partnership between Pakistan’s political and defence leadership is being viewed by supporters as a coordinated national effort to protect Pakistan’s interests and expand its international role. Prime Minister Shehbaz Sharif’s diplomatic engagement and Field Marshal Syed Asim Munir’s strategic approach have together shaped a more proactive foreign policy outlook. The Makkah summit could become a defining moment in Pakistan’s international journey—strengthening its alliances, enhancing its strategic relevance and reinforcing its message that Pakistan seeks peace through cooperation, dialogue and responsible global engagement.