A five-judge bench of the Lahore high court Chief Justice Umer Ata Bandial asked the government to submit its response by March 18.
"We have enough material to give a verdict on whether the writ petition about indicting the President for contempt is maintainable or not," Bandial observed while hearing the case.
"We have to conclude this case as it has been lingering on for the past eight months. The federation is given a last chance to submit a reply," he said.
At the last hearing, the High Court had asked the government to state whether "President Zardari can dissociate from political activities or not".
The Chief Justice asked whether the President was supporting the agenda of any political party.
"Is the President non-partisan?" he asked, seeking a written reply from the government.
Additional Advocate General Abdul Hai Gilani requested the court to allow advocate Wasim Sajjad, the counsel for the federal government, to further argue the case.
"Sajjad is busy with another case in the Supreme Court in Islamabad and he will appear in the next hearing," he said.
The Lahore high court had last year suggested that Zardari should give up the post of the head of the Pakistan People's Party as the President is expected to be impartial and apolitical.
After the President did not act on the suggestion, a petitioner asked the high court to act against him under the contempt of court law.
During today's hearing, the high court admitted an application by a lawyer named Sadique Azhar, who challenged the government lawyer's contention that the PPP is a private association and not a political party.
The government lawyer had based his contention on a technicality.
The ruling party is registered with the Election Commission as the Pakistan People's Party-Parliamentarians, which is headed by federal minister Makhdoom Amin Fahim.
In his application, Azhar said: "On the website, the office-bearers of both PPP and PPPP are the same."
The court issued a notice asking the government to respond to the application by March 18.
A K Dogar who representing the main petitioner Munir Ahmad, contended Zardari was the actual head of the party and had been holding meetings of PPP leaders at the presidency.
Dogar, who is also the counsel of Jamaat-ud-Dawah chief Hafiz Mohammad Saeed, sought contempt proceedings against Zardari for not quitting his political office.
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