LAHORE, July 21: Justice Maulvi Anwarul Haq of the Lahore High Court has stayed the recovery of luxury tax, levied through Finance Act 2008, in a petition by the owner of an imported vehicle till the next date of hearing.

Besides the stay, Taffazul Haider Rizvi advocate said, the judge also issued notice to the Punjab advocate general in the case to be heard within two weeks.

Representing Syed Murtaza Zaidi, Mr Rizvi said the so-called luxury tax was levied on imported cars, including station wagons and jeeps.

He added the owners of such vehicles, registered in Punjab after June 30, 2005, were liable to pay Rs200,000 under the new tax.

He said such a tax should be declared illegal and unlawful because it failed to define what ‘luxury’ meant.

He said the classification was unreasonable as a secondhand Toyota Mark X worth Rs2.5 million was amenable to the tax but a brand new BMW 320i worth Rs6.5 million and Rs4.2 million Mercedez Benz C-180 K were exempted as both these cars were under 2000 CC.

The lawyer said at the time of registration of the vehicle, the Motor Registration Authority of Excise and Taxation Department charged two per cent of the value of the vehicle. This charge was double the normal rate because the vehicle was categorised as a luxury vehicle therefore the same tax could not be imposed under a new act, he said.

The lawyer said under the Punjab Finance Act, 2008, the rules were to be framed but a demand notice have been sent to his client.