PESHAWAR: The Peshawar High Court has suspended a notification of a local council in Nowshera district for imposing the ‘development fee’ on the transportation of building material by goods transport vehicles.
A bench consisting of Justice Mohammad Naeem Anwar and Justice Inamullah Khan issued notices to the respondents, including the provincial government, the chairman of Pabbi tehsil council and the Pabbi tehsil municipal officer, seeking their replies to a petition of the All Khyber Pakhtunkhwa Goods Transport and Adda Owner Federation KP against the impugned development fee imposed on April 25, 2025.
It also ordered to club the petition with an earlier one through which another notification of the same nature, issued on Dec 12, 2024, was challenged.
The petitioner requested the court to declare illegal the fee imposed on the loading of vehicles in and out of the tehsil and district.
It also sought the court’s orders for the respondents not to harass goods transporters for coercing them to make payment of the impugned development fee.
Advocate Mian Zakir Hussain appeared for the petitioner and said Section 42 of the KP Local Government Act empowered a local government to impose, notify and enforce taxes, limited to those specifically listed in the Third Schedule of the Act and approved by the provincial government.
He added that in pursuance to the provision of Section 112 of the Act, the provincial government had been conferred with powers to make rules, and for the purpose of tax, the government had framed rules by the name of Khyber Pakhtunkhwa Local Government Taxation Rules, 2016.
The lawyer contended that those rules provided a comprehensive framework and procedural mechanism for the imposition of taxes by local governments, detailing the process of proposal, assessment, approval, notification and enforcement of taxes.
He added that through a notification on Nov 28, 2024 and subsequently on April 25, 2025, the tehsil government had purported to impose the development fee which it had sought to impose on the loaded vehicles carrying building materials within its territorial jurisdiction.
Mr Hussain argued that for the purpose of the impugned fee, the local government had not obtained any sanction from the provincial government as required by Section 42 of the Act.
He argued that for levying such a fee, the local government was not providing any services either for truck drivers or to the vehicles plying in and around the region.
The lawyer said that through the impugned notification, the local government levied the impugned fee on transportation of sand, soil, gravel, bricks and any kind of goods, on almost all members of petitioner organisation, which were in flagrant violation of the provisions of the Act.
He contended that the imposition of the development fee on vehicles exceeded the taxation powers granted to the local government under Section 42 read with Schedule III of the Act, as the said provision explicitly limited the local council’s authority to impose taxes only on items specified in the schedule.
“Since the impugned fee is not included in the Schedule III of the Act, its imposition is without lawful authority and contrary to the provisions of the law,” he said.
Mr Hussain also said that the records clearly indicated that the impugned levy was approved solely by the Pabbi tehsil municipal administration, whereas according to rules, any tax or fee must be submitted to the local council for approval.
Published in Dawn, February 22nd, 2026