PESHAWAR, March 28: A two-member bench of the Peshawar High Court on Thursday admitted to full hearing an appeal of former NWFP chief minister Aftab Ahmed Khan Sherpao, challenging the imposition of wealth tax to the tune of Rs7.2 million on his foreign currency account of 0.5 million pounds sterling.

The bench comprising Justice Khalida Rachied and Justice Abdur Rauf Lughmani issued notice to the respondents including Income Tax Department for clarifying its position.

The said wealth tax was imposed by the Assistant Commissioner Income Tax on Feb 23, 1999, after Mr Sherpao conceded in a press conference on Dec 25, 1998, that he possessed foreign currency account in Switzerland.

The government had claimed that the account was first maintained in the country and the foreign currency was later transferred abroad in 1996 through State Bank of Pakistan Regulations.

The wealth tax assessment officer imposed the tax for the years 1996-97 and 1997-98, stating that the foreign currency accounts were not exempted from wealth tax. He maintained that the said foreign currency was not declared by Mr Sherpao while declaring his wealth.

The income tax appellate tribunal had also dismissed the appeal of Mr Sherpao and upheld the imposition of said wealth tax.

Advocate Abdur Rauf Rohaila appeared for the appellant and argued that foreign currency accounts were exempted from levy of wealth tax. He argued that under section 6 of the Economic Reforms Act (Act NO XII) of 1992 the foreign currency accounts enjoyed complete exemption from all sorts of taxes.

Mr Rohaila argued that the wealth tax assessment officer was not justified to assess the foreign currency account of the appellant. He contended that the appellant was not bound under the law to declare the said assets.

The said money was deposited in Citi Bank, Rawalpindi till June 30, 1996, when Mr Sherpao was the chief minister of NWFP. Before the dismissal of his government by the NWFP governor, he transferred the money abroad.

The National Accountability Bureau had also started a probe regarding the said account, but later on the inquiry was shelved due to unknown reasons.