ISLAMABAD: The Supreme Court’s Constitutional Bench (CB) on Friday suspended the Peshawar High Court’s March 10, 2020, order that upheld the Cantonment Board Peshawar’s authority to levy property tax on assets managed by the Eva­cuee Trust Property Board (ETPB).

The five-judge bench, headed by Justice Aminuddin Khan, also issued notices to the Cantonment Board Peshawar and the Khyber Pakhtu­nkhwa Excise Department on ETPB’s civil appeals challenging the imposition of tax on federal properties vested in and managed by the federal government through the board.

Appearing on behalf of ETPB, senior advocate Hafiz Ehsaan Ahmad Khokhar submitted that the levy of property tax on the federal properties was unconstitutional and violated Article 165 of the Constitution, which he said categorically barred the imposition of any provincial or local tax on the property of the federation without its consent.

The counsel emphasised that no such consent was ever acc­orded by the federal government, rendering the impugned notices void ab initio.

Board’s lawyer argues local tax can’t be levied on federal assets

Advocate Khokhar argued that under Section 6 of the Evacuee Trust Properties (Management and Disp­o­sal) Act, 1975, all evacuee trust properties stand vested in the government, with the ETPB serving mer­ely as its statutory instrumentality.

Accordingly, any attempt by a Cantonment Board to impose property tax on such properties amounted to taxing the federation itself, a measure expressly prohibited by the constitutional scheme, he said.

Referring to Article 265 of the Constitution, the counsel contended that no tax can be levied or collected except by authority of law, and any levy inconsistent with the Const­itution or imposed without legislative competence was null and void.

Since the Cantonment Board derives its powers solely from delegated legislation and lacks constitutional competence to tax federal property, its imposition constitutes a clear usurpation of federal fiscal authority.

The counsel submitted that ETPB properties were federal in nature as per Section 6 of the ETPB Act 1975, dedicated to religious, charitable and welfare purposes, and maintained through federal resources without availing local municipal services.

Published in Dawn, November 1st, 2025