LHC grants stay to petitioners in plea against tax on ‘luxury’ houses

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Justice Shams Mehmood Mirza of the Lahore High Court (LHC) has granted a stay order to the petitioners and issued notices to the Punjab government and the Excise and Taxation Department in a plea challenging imposition of luxury tax on houses constructed on 2 kanals and more with a covered area of 6,000 square feet and above.

Zain Shehzad, Shehzad Saleem and Yahya Saleem had filed constitutional petitions through Barrister Mian Belal Ahmad and Barrister Qadir Buksh before the Lahore High Court challenging the luxury tax on various grounds.

The petitioners’ counsel argued that the luxury tax levied was discriminatory in both nature and effect since a house which was 12 kanals was being subjected to a tax of Rs 3,600,000 (being the maximum cap) whereas a house spread over 50 kanals or even 100 kanals was also being subjected to the maximum cap of Rs 3,600,000, although the latter houses afforded a greater luxury.

It was also argued that houses constructed before 2001 had been arbitrarily exempted from the tax net. It was further argued that the Punjab government has till date failed to constitute a grievance committee or frame any rules to bring the legislation into effect.