Supreme Court Verdicts Cantt. Boards to Charge Property Tax

The Supreme Court of Pakistan has permitted cantonment boards to continue charging property tax until the Sindh government formulates legislation on the matter. The decision came during a hearing on Thursday in a big development on the collection of property taxes in cantonment areas. The apex court was apprised of the Sindh government’s intention to introduce legislation to resolve the controversy of tax collection responsibilities.

Behind the Verdicts

A five-judge bench directed the Sindh government to draft and enact the proposed legislation within three months. The bench was led by Justice Syed Mansoor Ali Shah. They stated the law will be applicable until the new law is in place. March 18 verdict will remain effective facilitate cantonment boards to levy residential and commercial immovable property tax based on the rates outlined in the Sindh Urban Immovable Property Tax Act 1958. However, the recovery of previous tax amounts will remain suspended until a final decision gets reached in the case.

What’s Supreme Court’s Stance?

The Supreme Court’s involvement in the matter stems from a series of appeals filed by the federal government. Ministry of Defence and cantonment boards in Karachi file the petition through the proper channel. The appeal declared that the federal government and cantonment boards don’t meet the authority to levy taxes on immovable properties. The tax amendment in the Fourth Schedule of the Federal Legislative List falls under the 18th Amendment.

What’s Court’s Involvement?

The high court’s ruling has also noticed the restoration of the province’s jurisdiction. The jurisdiction is on tax matters as per the 18th Amendment. It prompted the Supreme Court to question why the Sindh government had not addressed the issue through legislation? While the case was provided for under Article 270A(3) of the Constitution.

Cantt Property Tax Authority

The Attorney General for Pakistan Mr Mansoor Usman Awan argued that the Cantonments (Urban Immovable Property Tax and Entertainments Duty) Order 1979 during previous hearings. The argument was on the 18th Amendment to authorize cantonments to assess and collect taxes. He highlighted the necessity of tax revenues for the operations of cantonment boards with the provision of essential services.

In response to the appeals, the Sindh government informed the Supreme Court of its intention to introduce legislation. This move aims to address the concerns raised by both the federal government and cantonment boards.

The appeals by the federal government and cantonment boards leads to the importance of local governance and the authority of local authorities to levy taxes. Cantonment boards representatives were also present during previous hearings.

DHA Residents Challenged the Case

Residents of cantonments in Karachi had challenged the property tax collection by cantonment boards before the Sindh High Court. They argued against the imposition and collection of such taxes. This litigation will intrigue the ongoing debate over tax jurisdiction and collection responsibilities.

The Supreme Court’s decision to allow cantonment boards to continue collecting property tax until the enactment of legislation by the Sindh government signifies a temporary resolution to the longstanding dispute. However, the impending legislation will likely shape the future framework for tax collection in cantonment areas to provide clarity and stability to residents and local authorities alike.