KARACHI, Sept 29: The vires of property tax levied by the excise and taxation department, government of Sindh on the Sheraton Hotel and Towers, Karachi as a commercial property has been challenged in the Sindh High Court.

The division bench comprising Justice Zahid Qurban Alavi and Justice Sarmad Jalal Osmany issued pre-admission notices to the provincial secretary excise and taxation, secretary ministry of culture and tourism and secretary, ministry of industries and production, government of Pakistan, filed by M/s Arabian Sea Enterprises (Pvt.) Ltd., being the owners of Sheraton Hotel and Towers, Karachi.

The petitioner has stated that on June 26, 2001, the provincial excise and taxation department issued a notification declaring and notifying the annual values of properties of various categories in different rating areas of Karachi Division, and Sheraton Hotel was declared to be a commercial property.

The petitioner further states that through a letter dated April 8, 2002, they informed the provincial excise and taxation department that Sheraton Hotel lies within the scope and meaning of an industry, and hence, Rs0.70 per sq. yd is to be levied, and not Rs5 per sq. yd, as is being levied, being the property tax of a commercial property.

The grounds to such a request, as maintained by the petitioner, are that on August 2, 1999, tourism as a whole was restored to the status of industry by the federal government, and that the hotel, to the worth and status of Karachi Sheraton, came within the exclusive jurisdiction of the ministry of tourism, government of Pakistan.

The petitioner maintains that it is because of the fact that it is an industry, the Karachi Electric Supply Corporation, Sui Southern Gas Company, as well as the Karachi Water and Sewerage Board have been levying bills to the Sheraton Hotel on the category of an industry and not as a commercial property.

The petitioner, through counsel Kazi Abdul Hameed Siddiqui, submitted that as the item “tourism” lies only in the Federal Legislative List, and there exists no trace of the said item in the Concurrent Legislative List of the Constitution, the provincial government has no executive authority to change the categorization created by the federal government through its exclusive executive powers conferred to it under article 97 of the constitution.

The petitioner further maintains that under articles’ 148 and 149 of the constitution, the executive authority of a province has to comply with the federal laws and the executive authority of the federation. It has also been maintained that under article 149 (4) of the constitution, the executive authority of the federation also extends to the giving of directions to a province as to the manner in which the executive authority of the former is to be exercised for the purpose of preventing any grave menace to the peace, tranquillity or economic life of Pakistan.

Hence, the petitioner submitted that the federal government is sleeping on the rights declared by it, and is not directing the provincial government to abide by its decision as far as the question of declaration of hotels as industries is concerned.

The absence of the item “tourism” in the Concurrent Legislative List of the Constitution of Pakistan, the petitioner further maintains, makes all the executive orders and enjoyment of executive authority of a provincial government towards “tourism”, ultra vires the constitution.

The petitioner further submitted that the excise and taxation department on January 8, 2002, through another notification, announced some incentives for the hotel industry due to the prevailing crisis, and hence, the said department is blowing hot and cold at the same moment.

The petitioner further submitted that even otherwise, it is a basic canon of law that where there exists an inconsistency between the federal laws and provincial laws, the federal laws prevail.

The petitioner has prayed that the demand notices and notification classifying Karachi Sheraton Hotel as a commercial property may be declared as null and void.

The petitioner has also prayed for declaring that the Sheraton Hotel Karachi is an industrial establishment for all purposes, until revized as such by the federal government.