ABBOTTABAD:
The Abbottabad Bench of the Peshawar High Court (PHC) has granted an interim relief to a group of property owners in connection with a petition challenging the Abbottabad Cantonment Board (ACB) to levy and collect property tax, restraining the Board from sealing the petitioners’ properties and collecting property tax.
A constitutional writ petition was filed in the PHC’s Abbottabad Bench on January 24, 2024, on behalf of a group of property owners. Lawyer Hashim Iqbal Jadoon filed the petition before on behalf of a group of property owners.
The petition challenged the Abbottabad Cantonment Board (ACB)’s authority to levy and collect property tax, arguing that such taxation powers were unconstitutional and beyond the legislative competence of the Board.
The legal foundation of the challenge rested on the interpretation of Entry No 50 of the Federal Legislative List (FLL), which reserves taxation on immovable property to provincial legislatures.
The petitioners contended that the ACB, being a federal entity, had no constitutional mandate to levy such taxes, especially after the 18th Constitutional Amendment which devolved key taxation powers to the provinces.
However, the situation took a turn when the 26th Constitutional Amendment was passed in October 2024. This amendment added the phrase “local taxes, fees, cess, charges, tolls in such areas” to Entry No 2 of the FLL, leading to confusion and widespread concern that cantonment boards now had the constitutional authority to impose property tax.
In response, Advocate Hashim Iqbal Jadoon once again led the legal charge, filing a fresh constitutional petition (WP No 1266-A/2024) on behalf of the residents of Abbottabad Cantonment. He argued that despite the new wording, the 26th Amendment didn’t override Entry No 50 and that only provincial governments could constitutionally impose property taxes. The petition challenged the vires and interpretation of the 26th Amendment and its impact on legislative competence.
In a landmark development, the PHC once again granted interim relief to the petitioners on July 2. This stay order reaffirmed the constitutional argument that federal bodies like cantonments couldn’t usurp taxation powers reserved for the provinces under the constitutional framework.
This case is likely to shape the future of tax jurisdiction in Pakistan and may have nationwide implications for thousands of residents living in cantonment areas.
