LAHORE, Feb 26: The Lahore High Court was informed on Thursday that valuation lists and not valuation tables had nexus with the property taxpayers. Barrister M. Saleem Sahgal explained to Justice Muhammad Ghani that the lists were prepared as a hypothetical value of a property. Actual tax was required to be paid under lists worked out in the light of the tables.

Justice Ghani will now take up on Friday (today) as many as 450 writ petitions against the new property tax assessment method adopted after an amendment to the Urban Immovable Property Act, 1958, in October 2001.

The new formula authorizes the Punjab excise department to levy the tax on the basis of the capita value of a property instead of its annual rental value. Subsequently, the Punjab government worked out new valuation tables for the urban property by dividing them into seven categories (A to G) while keeping in view the locality in which these were located.

The petitioners contended that the new assessment formula had caused five to 10 time increase in property tax. Barrister Sahgal submitted on behalf of the excise department that valuation tables were based on a reasonable rentability of a property and were not the actual rent.

Valuation lists, on the other hand, were based on actual rent which a property was to fetch. Taxpayers were concerned only with lists and not valuation tables.

The counsel stated that the preparation of valuation tables had brought down the rentability of a property between Rs7 and paisa 42 per square feet depending on its category and locality.

He submitted that the recent amendment (section 5-A) in the Act was introduced on the reservations of superior courts in similar cases in the past about he conduct and discretionary powers of excise officials.

The new system was adopted to standardize the levy of property tax and curb the officials' discretionary powers and corrupt practices. Barrister Sahgal stated that valuation tables had been prepared on the basis of similar tables already available and on the basis of information gathered with the help of the department sources and real estate dealers.

The excise department later worked out rules and guidelines which were sent to the assessment authorities across the province for the preparation of valuation tables.

The counsel submitted once the tables were prepared as a presumptive basis to determine a reasonable rentability in an area, the work on preparation of the actual valuation lists started. It were the lists that valued actual property tax and these were prepared and amended after a due process under which objections were invited.

The law had a remedy in it and petitioners had not exhausted it. Mr Sahgal submitted that the contention about circulating evaluation tables were misplaced because these were like laws enacted by the Punjab Assembly for which no objections were invited.