KARACHI: The Sindh High Court on Thursday ruled that after the 18th Amendment, the federation and cantonment boards lacked power and jurisdiction to impose and recover taxes on any immovable property, including tax on the annual rental value of such property.

The two-judge bench, headed by Justice Mohammad Shafi Siddiqui, also observed that such amendment has consequently restored the competence and jurisdiction of the province to impose, recover tax and legislate on the subject matter.

It noted that the amount recovered by the cantonment boards under the taxes in question since the 18th Amendment also called for an account.

The bench issued such directives in a short order, for the reasons to follow, while disposing of around 100 identical petitions filed against the “house and conservancy and property tax” imposed by the cantonment boards under their jurisdictions in different parts of the city.

However, on the request of a lawyer for some cantonment boards, the court directed the petitioners not to move applications in the next four weeks either for the adjustment or refund of the amount paid towards the aforesaid taxes on the annual rental value of the property since the respondents were intending to approach the apex court.

Several individuals, firms, private hospitals, educational institutes, banks, owners of shopping malls, eateries and others had petitioned the SHC and impleaded the defence secretary, director general cantonment boards and military land, Defence Housing Authority, Cantonment Board Clinton, Karachi Cantonment Board, Cantonment Board Faisal, Cantonment Board Korangi Creek and several others as respondents.

The bench in its short order said, “The Eighteenth Amendment brought a change to and amended Entry 50 in the Fourth Schedule (Federal Legislative List) of the Constitution of the Islamic Republic of Pakistan. As a consequence, thereof, the Federation and all Cantonment Boards lack competence, power, and jurisdiction to levy, charge, impose and recover any or all tax(es) on any immovable property, including, but not limited to, tax on the annual rental value of immovable property”.

Further, the 18th Amendment, consequently, restored the competence and jurisdiction of the province to levy, charge, recover, and legislate on the subject identified above and to pursue it accordingly, it added.

The bench said that finally, the amounts recovered by the cantonment boards under the aforesaid subject of tax since the 18th Amendment also call for an account.

“At the time of announcement of this short order, Mr Farogh Naseem, learned counsel appearing for some of the Cantonment Boards has requested that since a short order has been passed in the above terms and the competence, power and jurisdiction of the Cantonment Boards could not be enforced for aforesaid subject, therefore, in terms of clause (iii) of the short order, the petitioners may not move applications in the next four weeks either for the adjustment or refund of the amount paid towards the aforesaid subject i.e tax on the annual rental value of the property, as the Respondents intend to approach the Supreme Court. Order accordingly,” it concluded.

Published in Dawn, December 15th, 2023