The Lahore High Court on Tuesday sought reply from the Punjab government and Excise and Taxation (E&T) Department on 37 petitions moved by the citizens against luxury tax on residential houses situated in some housing schemes of the provincial capital.
Justice Nasir Saeed Sheikh directed the respondents to file replies till September 5.
The petitioners through lawyer Shahnawaz Khan and other counsels submitted that the provincial government through Section 10 of The Punjab Finance Act 2013 has imposed a ‘newfangled’ one-off luxury tax on residential houses measuring two kanals and above which are located in a rating area specified as Category A for the purposes of the Punjab Urban Immovable Property Tax Act, 1958.
They argued that the impugned luxury tax was ostensibly only imposed in three districts of Punjab and it was ‘novel and unheard of’ in others, the counsels pointed out.
They argued the tax had been imposed on houses which are located in the Rating Area specified as Category A of the E&T Department which did not include the Cantonment, EME Colony/Society, Defence Housing Authority (DHA), Defence RAYA, Lake View, Bahria Town and Jati Umrah as these were anachronistically considered as ‘rural areas’ despite their modern atomic age.
By excluding these areas, notwithstanding, the fact that they encompassed residential houses of two kanals and above, the respondents had clearly discriminated, they added.
The petitioner requested the court to strike down luxury tax on residential houses by declaring it discriminatory, inconsistent and violation of the constitution.
This is a very discriminatory tax selectively imposed on a few localities of Lahore. The amount of tax is also extraordinary. Both facts should be noted by the court in its decision. Any taxation should be across the board for all regions of Punjab and all areas which will reduce amount to be taxed as well.
AHB
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