PESHAWAR, June 23: The Peshawar High Court on Thursday ruled that places rented out to non-government organizations should be treated as commercial units for the levy of property tax. A bench comprising Justice Tallat Qayyum Qureshi and Justice Ijazul Hassan dismissed a writ petition filed by Nayyab Akber, wife of former additional secretary Akber Marwat. The bench, however, directed the excise and taxation department to reconsider the amount of Rs402,949 levied as property tax against the petitioner for four years on the residence rented out to an NGO.

The petitioner had requested the high court to declare illegal the consideration of her residence as a commercial unit for property tax. She said that as NGOs were non-profit organizations, her residence should be treated as a residential unit and not a commercial unit.

Advocates Zafar Abbas Zaidi and Farmanullah Khattak appeared for the excise and taxation department and contended that renting out a residence was a commercial activity, therefore the said residence could not be treated as a residential unit.

They stated that the department was not concerned as to whom the residence was rented out and its concern was that the petitioner was receiving Rs16,000 per month as rent. They added that the property had not been given in charity and the owner was earning money through it.

The petitioner’s counsel Abdul Sattar Khan stated that the residence was rented out to an NGO, the Veterinary Training Centre for Afghanistan, which was a non-profit organization. He argued that in the NWFP Finance Act, 1997, three categories were given in the schedule of property tax — residential unit, commercial unit and property rented out to offices.

He contended that in case the excise and taxation department did not consider the property as residential, it should consider it in the third category.

He said NGOs were not involved in commercial activity, therefore the property could not be included in that category.

He argued that the petitioner had been victimized and the assessment made from 1996 onward was enhanced manifold as compared to previous years. He added that the amount of more than Rs400,000 was excessive and unjust.