ISLAMABAD: The Islamabad High Court (IHC) has suspended a single bench’s decision that had nullified the recent increase in property tax and directed the Election Commission of Pakistan (ECP) to hold local government elections in the federal capital.
According to a newspaper report, a two-member bench, comprising Justice Arbab Mohammad Tahir and Justice Raja Inaam Ameen Minhas, issued the interim order while hearing an intra-court appeal filed by the Metropolitan Corporation Islamabad (MCI) through its lawyer, Advocate Kashif Ali Malik.
The MCI filed the appeal under Section 3 of the Law Reforms Ordinance, 1972, challenging the single bench’s ruling that declared the property tax notification “without lawful authority.”
The single bench, led by Justice Mohsin Akhtar Kayani, had also held that only an elected local government had the power to impose or revise taxes and not an appointed administrator.
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In its September 24 decision, the single bench stated that the MCI did not follow legal procedures mentioned in sections 88 and 89 of the Islamabad Capital Territory Local Government Act, 2015 (ILGA 2015), including public notice, hearing of objections, and government approval. The court also instructed the federal government to ensure proper legal procedures before introducing any future taxes.
Challenging the ruling, the MCI argued that the judgment was legally incorrect and had disrupted municipal operations. Advocate Malik contended that Section 88(5) of ILGA 2015 allowed the MCI to revise or change existing taxes without completing all steps required for introducing a new one.
He added that the property tax notification, S.R.O. 404(I)/2024, had been properly issued and published in the official gazette on March 14, 2024.
The MCI also disagreed with the single bench’s observation that the Urban Immovable Property Tax Act, 1958, applied to Islamabad. It said the Supreme Court had already ruled in the Bilquis Anwar Khan case (2001 SCMR 809) that this law did not extend to the capital territory.
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The corporation further stated that suspending property tax collection could cause financial instability and affect key municipal services like sanitation, water supply, waste management, and road maintenance. It noted that property tax remains its main revenue source, as federal funds are limited.
After hearing initial arguments, the two-member bench suspended the single bench’s September 24 verdict and issued notices to all respondents, including petitioner Mohammad Anwar Mughal, the Capital Development Authority (CDA), and the federal government, to submit their replies.
The court noted that the case raised important questions about administrative powers during the period between the dissolution and re-establishment of local governments. The hearing was adjourned until the next date.
