RCB tax increases challenged in court

LHC Rawalpindi bench issues notices to respondents

RAWALPINDI:

The Lahore High Court Rawalpindi bench has admitted a petition challenging the huge increase in tax and other development charges by the Rawalpindi Cantonment Board (RCB) without the approval of elected members and the committee formed to review the new levy.

The court said that prima facie the new levy is in violation of Section 61 of the Cantonment Act 1924.

Judge Waqas Rauf Mirza admitting the petition of the Anjuman-e-Tajiran Cantonment President Sheikh Hafeez issued notices to respondents concerned to appear before the court on March 14.

Earlier, the RCB had increased the rate of taxes in terms of development charges, security, commercialisation, mutation, non-utilisation fees etc. The RCB has drastically increased property tax and development charges under Section 25 of the Cantonment Act without taking the elected representative on board.

When the judge started hearing the petition, petitioner’s counsel Razzaq A Mirza informed the court that over 1000 times increase in taxation has been issued without due consideration.

The lawyer argued that “The Cantonment board has the power to levy and revise the tax under section 60 of the Cantonment Act, 1924. However, before imposing taxation under section 61, public notice, the issuance of newspaper advertisements, hearing of public objections and hearing of appeals is a must. Taxation is legally possible only after the settlement of all legal formalities.

The court, while accepting the petition for hearing, ruled that the levy of the tax was apparently against the law.

Appearing before the court, the assistant attorney general stated that he would present his case in the court in this regard. The court adjourned the hearing till March 14 for further proceedings.

A review committee comprising elected representatives is yet to give its input regarding the proposed increase in taxes and other fees including development charges, building application fee, checking fee, security deposit, non-utilisation charges, commercialisation charges, mutation fee etc.

The steep increase in fees for lease properties has led to a dramatic drop in the number of building plans for residential and commercial construction, also affecting the business of the construction industry.

According to the increase, development charges for building plans of commercial property on lease land have been increased from Rs1,000 per square feet to 10 per cent of the deputy commissioner rate, which is more than a 1000 per cent increase. For residential property on lease land, the deputy commissioner rate has been increased from Rs125 per square foot to 10 per cent, which is over a 1000 per cent increase. While for private land development charges on commercial building plans have been increased from 800 square yards to Rs1,500 square yards and for residential building plans from 225 square feet to Rs500 per square foot.

Similarly, the commercial building application fee has been increased from Rs12 per sq foot to Rs20 per sq ft and residential from Rs3 per sq ft to Rs5 sq ft. The checking fee has also been increased from Rs5 per square foot to Rs10 on a commercial while in case of residential the fee has been increased from Rs1 per square foot to Rs5 sq ft.

While the security deposit has been drastically increased from Rs5,000 to Rs 10,000 marla for residential property, up to 10 marlas from Rs 15,000 marla to Rs 25,000 per marla and from 10 marlas to one kanal Rs 25,000 marla to Rs 40,000 marla.

 

Published in The Express Tribune, March 7^th, 2022.