ISLAMABAD: The Islamabad High Court (IHC) on Wednesday struck down the Metropolitan Corporation Islamabad’s (MCI) property tax notification of January 23, 2024, declaring it legally unenforceable.

The court held that the civic authority could only recover property tax at pre-2018 rates until a valid notification is issued strictly in accordance with law.

Justice Mohsin Akhtar Kayani, while allowing a set of writ petitions, ruled that the impugned notification had never been published in the official gazette and, therefore, carried no binding force.

The court observed that the statutory requirement of gazette publication is essential for a notification to have legal effect and in its absence, the tax demands raised under the January 2024 notification could not be sustained.

Court rules levy unenforceable, directs recovery at pre-2018 rates until valid notification issued

The petitions were filed by Muhammad Munir Ahmed Chaudhary through Advocate Ahmed Hasan Rana, who challenged the legality of the tax notices served on property owners in the federal capital under the disputed notification.

During Wednesday’s proceedings, Mr Rana moved an application under Section 94 of the Civil Procedure Code (CPC) and presented before the court an order dated June 26, 2025, in which MCI officials themselves admitted that the January 2024 notification had been issued only in draft form and had never attained the status of a formal notification.

On this admission, Justice Kayani struck down the tax demands, terming them without lawful authority and of no legal consequence.

It may be recalled that earlier, on June 4, 2024, the IHC had suspended the enforcement of the impugned notices as an interim measure and directed that property owners continue depositing taxes at the pre-existing rates.

The court had also ordered that those who were being included in the tax net for the first time deposit half of the assessed liability as a measure of good faith, pending adjudication of the petitions.

The question of property taxation in Islamabad has been a recurring source of litigation for several years.

In December 2020, the IHC had already declared the Capital Development Authority’s (CDA) 2018 property tax notification unlawful.

In that judgment, the court held that under the Islamabad Capital Territory (ICT) Local Government Act, 2015, only the MCI was empowered to levy property tax.

The law mandated the corporation to first publish taxation proposals, invite objections from stakeholders and hold public hearings before finalising any levy.

The court further ruled that the CDA had no legal competence to impose or recover property tax, thereby shifting the authority exclusively to the MCI.

Despite these clear judicial directions, the matter has continued to resurface owing to procedural lapses and overlapping administrative claims between CDA and MCI. The January 2024 notification was another attempt that, according to the court, failed to meet statutory requirements, thereby perpetuating the longstanding uncertainty over property taxation in the capital.

Following Wednesday’s verdict, the MCI now stands confined to recovering property tax only in those areas of Islamabad where the levy was applicable prior to 2018.

Consequently, newly developed localities, such as Chak Shahzad and Sector E-11, which were brought under the tax net through subsequent notifications, have been excluded from liability until a fresh, valid notification is issued in accordance with law.

In addition, in connected proceedings dealing with the broader scope of municipal authority, the IHC has already barred the MCI from enhancing property tax rates until the next round of local government elections is conducted.

Justice Kayani underscored that the previous rates would remain operative until an elected local government is in place to exercise the powers conferred under the ICT Local Government Act, 2015.

Published in Dawn, September 25th, 2025