PESHAWAR: The Peshawar High Court has issued a notice to the attorney general for Pakistan, seeking his response to a petition challenging legality of the imposition of property tax by cantonment boards and the relevant provisions of the law in this regard.
A bench consisting of Justice Syed Arshad Ali and Justice Babar Sattar also sought comments within a fortnight from the respondents, including the defence secretary, director general and additional director general of Military Lands and Cantonments Department, Rawalpindi, chief executive officer of Peshawar Cantonment Board and secretary of the Khyber Pakhtunkhwa excise and taxation department.
It issued the notice to the attorney general for Pakistan under Order XXVII-A of the Code of Civil Procedure, 1908, observing that constitutional vires and interpretation of Section 60 of the Cantonments Act, 1924, are involved in the matter.
The petitioners, including Mian Mohammad Tariq Siddiqui and several other citizens, requested the court to declare unconstitutional and without lawful authority the imposition, assessment and collection of tax on annual rental value (ARV) of immovable properties by the respondents.
They said that the imposition of the impugned tax should be declared beyond the legislative competence of the federation under Entry 50 in Part I of the Federal Legislative List, which expressly excluded taxes on immovable properties, and also to quash the impugned assessment notices, demands and recovery proceedings against the petitioners.
Advocate Hafiz Zain Rasheed appeared for the petitioners and contended that Section 60 of the Cantonments Act, 1924, as substituted through the Cantonments (Amendment) Act, 2023, read with Schedule VII (a), which provided for taxation on the annual rental value of immovable property was in conflict with the constitutional scheme as property taxes on immovable properties could only be imposed and levied by provinces as it was a provincial subject under the Constitution.
He argued that the impugned taxation framework was inconsistent with the constitutional distribution of legislative powers following the enactment of the Constitution (Eighteenth Amendment) Act, particularly in view of Entry 50 of the Federal Legislative List, and the provincial legislative framework governing taxation of immovable property.
The lawyer questioned the constitutional validity and continued applicability of Presidential Order No 13 of 1979, promulgated during the Gen Ziaul Haq rule in 1979 and sought a declaration that the order in question can’t sustain the impugned taxation framework insofar as it is in conflict with the constitutional scheme following the Eighteenth Amendment.
He argued that the restoration and restructuring of the constitutional distribution of legislative powers through subsequent constitutional amendments could not be overridden by a presidential order and that the authority to impose taxes must be traceable to a valid constitutional and legislative source.
Mr Rasheed questioned the substantial enhancement of annual rental values of commercial properties located within the Peshawar cantonment area, including Saddar Bazaar, Shoba Bazaar and Khyber Bazaar, and alleged a 200-300 per cent increase compared to previous property taxes.
He maintained that the impugned assessments violated statutory safeguards and principles of natural justice, while also raising questions concerning the applicability of the Khyber Pakhtunkhwa Urban Immovable Property Tax Act, 1958, to properties situated within cantonment areas.
The counsel said imposition and collection of property taxes within provinces was a provincial subject and the KP government was constitutionally competent to levy property tax even within the areas of Peshawar’s cantonment board area through the excise and taxation department.
Published in Dawn, November 11th, 2026
