The Sindh High Court (SHC) has declared that, following the 18th Amendment, the federation and cantonment boards lacked the authority and jurisdiction to impose and recover taxes on any immovable property, including taxes on the yearly rental value of such property.
The two-judge bench, led by Justice Mohammad Shafi Siddiqui, also noted that the amendment restored the province's competence and jurisdiction to impose, recover, and legislate on the subject matter.
It was further observed that the amount recovered by cantonment boards under the taxes in question after the 18th Amendment also called for an account.
For the reasons stated below, the court issued such directives in short order while disposing of around 100 similar petitions filed against the "house and conservancy and property tax" imposed by cantonment boards in various regions of the city.
The bench, in its short order, said, “The Eighteenth Amendment brought a change to and amended Entry 50 in the Fourth Schedule (Federal Legislative List) of the Constitution of the Islamic Republic of Pakistan. As a consequence thereof, the Federation and all cantonment boards lack competence, power, and jurisdiction to levy, charge, impose, and recover any or all tax(es) on any immovable property, including, but not limited to, tax on the annual rental value of immovable property.”
However, at the request of a lawyer for some cantonment boards, the court directed the petitioners not to file applications in the next four weeks for the adjustment or refund of the amount paid towards the aforementioned taxes on the annual rental value of the property because the respondents planned to appeal to the Supreme Court.