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KARACHI, Nov 26: A cantonment board can recover property tax arrears only for previous three years from a newly-assessed owner, a Sindh High Court division bench declared on Friday.
A property owner complained in a writ petition that he was issued a notice for imposition of tax on his property by the Clifton Cantonment Board in 2004. Simultaneously, the board sent a demand notice for recovery of the tax for the past 13 years.
Representing the petitioner, advocate Abdul Razzak argued that under Sections 68 and 72 of the Cantonment Act-1924, the board must first prepare an assessment list and notify the assessee. The owner or assessee was to be associated in valuation of the property for the purpose of calculation of the annual tax liability.
After determination and assessment of the payable amount, the board could recover the tax for the preceding three years. It was not open to the taxation authority to assess a property for the first time and then impose the tax with retrospective effect for any number of years, he argued.
In the present case, the lawyer said, the prescribed procedure was not followed and the arbitrary assessment was given retrospective effect since 1991. The amount was sought to be recovered as if the assessee had defaulted on payment and had to clear outstanding arrears for the past 13 years. This, he maintained, was not permissible under the law. The property was never assessed before the summons issued in 2004 and the assessee could not be liable, he argued.
The court agreed and observed that a demand from a newly-assessed owner should be confined to the previous three years. The demand for 13 years was unlawful. The impugned summons issued by the board could be treated as the first intimation for preparation of list and tax could be levied from that year, it ruled.
KWSB PLEA UPHELD: The court dismissed a petition moved by Al-Abbas Sugar Mills against the award of contract for construction of a power house for pumping water at Dhabeji by the Karachi Water and Sewerage Board. The petitioner claimed that it offered the highest bid but a lower bid was accepted by the board.
Advocate Abrar Hasan, the KWSB counsel, argued that mere participation in bidding did not vest a party with a right to maintain a petition nor was the amount of bid the only consideration for acceptance of the bid.
The power house, the lawyer said, was to be constructed on a ‘build, operate and transfer (BOT)’ basis and the board had also to ensure the back-up capacity, experience and equipment of the bidder. The party awarded the contract would build the plant in collaboration with a reputed Chinese company, he said.
