‘Not for profit’: LHC restrains Taxation Department from sealing Gym Khana property

Club secretary says property tax appeal still pending before Taxation director.

LAHORE:

The Lahore High Court on Monday stopped the Excise and Taxation Department from sealing the Lahore Gymkhana Club.

Justice Shehzada Mazhar issued the order on the petition filed by Lahore Gymkhana Club Secretary Hussain Rizvi who named Excise and Taxation secretary, director general and director as respondents.

Rizvi’s counsel Mian Irfan Akram told the court that the club was an association incorporated under the Companies Ordinance, 1984.

He said on December 28, his client had received a tax notice from the department, warning that the club’s property would be sealed if property tax worth Rs3,417,892 was not paid.

He said prior to this notice, he had received letters on June 21 and 25, 2013 from the department with the subject “payment of property tax in respect of property unit SE-30R-3 known as Lahore Gymkhana” where tax liability had been fixed at Rs 18,972,728.

He said he had challenged these letters before the LHC which had set them aside and referred the matter to the excise director on June 28, 2013.



He said following court orders, his client had filed an appeal before the Excise and Taxation director. He said the case was still pending.

He said it was illegal to serve the petitioner with a notice until the appeal was decided.

He said the department had issued a press release regarding the disputed amount set aside by the LHC and the matter was pending before the authorities. He said the action was mala fide.

He said his client had also filed an appeal before the Excise and Taxation Lahore director against the notice but he had refused to entertain it.

He said the LHC and the Supreme Court in several judgments had held that clubs are second homes for their members. He said according to these judgments, the club was not a commercial or industrial organisation.

He said the LGC was not undertaking any commercial activity or business.

He asked the court to declare the notice to be without lawful authority, without jurisdiction and of no legal effect.

He also asked the court to restrain the respondents from demanding the tax.

He asked the court to issue directions to the respondents to treat LGC as a non-profit organisation.

Published in The Express Tribune, January 7^th, 2014.