KARACHI: A legal battle involving a recent increase in the property tax by the Cantonment Board Clifton (CBC) for its residents continued as the Sindh High Court on Wednesday restrained the former as well as the Defence Housing Authority (DHA) from taking any coercive action against residents who filed two petitions in court.

Some residents of DHA and Clifton had petitioned the SHC impugning a letter issued on Aug 23, 2022 by the assistant director general, military land & cantonment boards, Rawalpindi.

They contended that through such letter, an illegal, exorbitant and arbitrarily assessed tax was imposed.

When a two-judge bench headed by Justice Mohammad Junaid Ghaffar took up the matter for hearing, Advocate Zaheem Haider and CBC’s deputy chief executive officer Zameer Hussain appeared in court.

SHC restrains CBC from taking any coercive action against petitioners till Sept 20

The counsel undertook to file comments on behalf of the DHA and CBC on the next hearing.

Assistant Attorney General G.M. Bhutto also assured the bench that replies would be filed on behalf of the defence secretary, V Corps Commander and military estate office Karachi circle.

However, nobody was in attendance on behalf of the Cantonment Board Karachi and the bench again issued notice to CBK as well as the advocate general for Sept 20, the next hearing.

Representing the petitioners in one of the petitions, Advocate Saadat Yar Khan pleaded for an interim restraining order in respect of the challans issued to the petitioners for payment of property and other taxes.

The bench in its order said: “Insofar as the impugned notices for payment of property tax along with conservancy and water charges on enhanced annual rental value (ARV) are concerned, it is informed that last date for payment with 15% rebate is up to 30.09.2023. Since counsel for respondents No.1 &2 [DHA & CBC] needs time to assist the court with appropriate comments, adjourned to 20.09.2023. However, till the next date of hearing, respondents shall not take any coercive action against the petitioners in both the connected petitions”.

The residents concerned submitted in their petitions that all kinds of taxes could only be levied by the act of parliament in terms of Article 77 of the Constitution and thus the letter in question was totally illegal and unconstitutional.

They submitted that in terms of Entry No.37 and 50 of Part I of Federal Legislative List, the properties situated in a province were always subject to provincial legislation i.e. the Sindh immovable property tax and the provincial government had jurisdiction to assess and levy the property tax.

Initially, another division bench of the SHC on June 1 had also restrained the respondents from taking any coercive action against the petitioners regarding the reassessment meant for recovering taxes on pre-determine ARV for its retrospective effect in another identical petition.

The bench headed by Justice Mohammad Shafi Siddiqui in its order had stated: “However, for the reassessment of the current year 2023 to 2024, 25% of the reassessment shall be secured, for which respondents shall either issue fresh challan only of 25% of the tax for the current tax year i.e. 2022-23 or in the alternate amount of 25% of the above reassessment be secured by the petitioners with the nazir of this court by way of pay order or bank guarantee in a ten days’ time.”

Such directives had been issued on a petition filed by Faiza Saeed and 85 other residents, through their counsel Khawaja Shams-ul-Islam, in May.

Besides, there are several other identical petitions filed by the residents of Defence and Clifton against property tax which are pending before the SHC and fixed for hearing on Sept 8 and Sept 26.

Published in Dawn, September 7th, 2023