The Lahore High Court on Thursday asked the Punjab government to explain why it has imposed a luxury tax on houses on two kanals or more in selected areas and not across the board.
Justice Nasir Saeed Sheikh of the LHC asked Acting Advocate General Mustafa Ramday to bring the Punjab government’s explanation to the court at the next hearing on September 10. The judge said that he would make a decision on a request to set up a larger bench to hear the case at that date. He remarked that a larger bench could not be set up until the main petition was assigned.
The counsel for the petitioners said that the government had imposed a luxury tax in 1997 and so could not do so again. The advocate general argued that the provincial government did have the authority to levy the tax.
The petitioners submitted that the government was taking coercive measures for the recovery of the tax and sought directions for it to desist from doing so. The judge remarked that there was no harm in paying the first instalment of the tax. The petitioners’ counsel said that it was an illegal and unconstitutional tax so they would not pay it.
The advocate general assured the court that the government would take no coercive measures for the recovery of the tax before the next hearing and asked the judge not to issue a written order in this regard.
The petitioners, mostly residents of Model Town and New Muslim Town, submitted in their pleas that the tax in selective areas was discriminatory and inconsistent with the fundamental rights guaranteed by the Constitution.
They said that the government did not plan to levy the tax in posh areas of the city like Cantonment and Defence, which was clear discrimination. They asked the court to set aside notices issued to them by the Excise and Taxation Department.
Published in The Express Tribune, September 6th, 2013.