Summary: ''A lease which is not in consonance with section 107 of the Transfer of Property Act, 1882 and section 49 of the Registration Act, 1908 cannot at all be held to be permanent in nature under any circumstances and since the lease in question was not in perpetuity, the Tax department has no lawful authority to demand/levy property tax from the lessee in term of section 4 (a) & (b) of the Urban Immovable Property Tax Act, 1958.'' ---- Issues:Is the property leased by The Board to Muhammad Shafi exempt from tax under Section 4(a) of The Act?Did the High Court correctly apply legal principles from the case of Mehran Associates Ltd. v. Commissioner of Income Tax, Karachi?Judgment:The Supreme Court dismissed the appeal, affirming that the property in question is not subject to property tax. The Court clarified that the lease does not constitute a lease in perpetuity as it contains a fixed term of 30 years with conditions for the constructed property to revert to The Board, making it exempt under Section 4(a) of The Act.Reasoning:The Court determined that a lease in perpetuity implies an irreversible or non-returnable transaction, which was not the case here. The lease contained specific conditions, including the return of constructed property to The Board, approval requirements for construction and sub-leasing, and a termination clause, all indicating the lease was not in perpetuity. The Court also differentiated this case from Mehran Associates Ltd., as it involved the interpretation of lease under The Act rather than income tax laws.Conclusion:The Supreme Court concluded that the lease arrangement between The Board and Muhammad Shafi does not make the property liable for property tax under The Act due to its non-perpetual nature and specific conditions that align with an exemption under Section 4(a) of The Act.

Summary: (a) Constitution of Pakistan---- ----Art. 165---Punjab Urban Immovable Property Tax Act, 1958, S.4(a)---National Bank of Pakistan---Claim of exemption from provincial property tax---NBP challenged notices issued by Excise & Taxation Department, Multan demanding property tax and claimed that its properties were properties of Federal Government, therefore exempt from tax levied under Act of Provincial Assembly---Held, NBP is a separate juristic entity carrying on banking business in competition with other banks and is not a Government department performing sovereign or welfare functions---Benefit of Art.165 of Constitution and S.4(a) of Act, 1958 was not available. (b) Punjab Urban Immovable Property Tax Act, 1958---- ----S.4(a)---Exemption---Buildings and lands vesting in Federal Government---Scope---Exemption under S.4(a) is a reiteration of constitutional protection under Art.165 and applies to property vesting in Federal Government---Property of NBP could not be treated as property vesting in Federal Government merely because NBP was established by statute and remained a nationalized bank. (c) National Bank of Pakistan Ordinance, 1949---- ----Ss. 4, 9, 12 & 14---National Bank of Pakistan---Corporate personality---Effect---NBP was established as a body corporate having perpetual succession and common seal---Although Federal Government had shareholding and powers regarding capital, appointment of Managing Director/Chairman and overall statutory framework, such features did not convert NBP’s property into Federal Government property for purposes of exemption from provincial property tax. (d) Banks (Nationalization) Act, 1974---- ----Ss. 5 & 5-A---Nationalization of banks---Vesting of ownership, management and control in Federal Government---Effect on corporate status---Although ownership, management and control of banks stood transferred to Federal Government under Act, 1974, S.5 itself preserved status of banks as bodies corporate---NBP retained its distinct juristic personality and could not claim automatic exemption under Art.165 of Constitution. (e) Constitution of Pakistan---- ----Art. 165---Government corporations and instrumentalities---Tax exemption---Principles summarized---Benefit under Art.165 may, in appropriate cases, extend to property owned by Federal Government through instrumentalities or corporations, but only where justifiable grounds exist, such as real governmental/sovereign function, monopoly, or corporation being an extension of Government---Corporation engaged in ordinary commercial activity and competing with private entities cannot claim preferential tax exemption. (f) Corporate law---- ----Lifting/piercing corporate veil---Government-owned corporation---Tax exemption---Scope---Courts may pierce corporate veil to determine true ownership/control for purposes of Art.165, but such doctrine cannot be invoked as matter of course to reduce or avoid tax burden---No justifiable reason existed to lift veil in favour of NBP, which operated as ordinary banking company in commercial market. Cited Cases: • Union Council Ali Wahan, Sukkur v. Associated Cement (Pvt.) Limited 1993 SCMR 468 • Central Board of Revenue and another v. S.I.T.E. PLD 1985 SC 97 • Water and Power Development Authority v. Administrator District Council Swabi and 5 others 2005 SCMR 487 • Central Board of Revenue, Islamabad and another v. WAPDA and another PLD 2014 SC 766 (g) Constitution of Pakistan---- ----Arts. 25 & 165---Tax exemption for Government-owned commercial corporation---Discrimination against competitors---NBP was not the only bank providing banking services in Pakistan and was operating in competition with other banking companies---Granting exemption from property tax would place NBP on higher pedestal and discriminate against similarly placed banking companies---Such preferential treatment was not warranted. (h) Banking law---- ----National Bank of Pakistan---Commercial banking activity---No sovereign monopoly---NBP was engaged in trade, business and commerce like other banks and regulated under sound banking principles and State Bank directions---It could not be equated with a Government department or sovereign arm of State merely because of statutory origin and nationalized character. (i) Constitution of Pakistan---- ----Art. 165-A---Effect on exemption claims by statutory corporations---Supreme Court jurisprudence after insertion of Art.165-A restricted use of corporate veil doctrine for claiming tax exemption by statutory corporations---Statutory corporations cannot automatically rely upon Art.165 to avoid taxes merely because of Government control or ownership. Cited Cases: • Collector of Sales Tax and Central Excise, Lahore v. WAPDA and others 2007 SCMR 1736 • Central Board of Revenue, Islamabad and another v. WAPDA and another PLD 2014 SC 766 (j) Pakistan Telecommunication Corporation / PTCL precedent---- ----Government department transformed into corporation/company---Distinction---Where entity performs monopoly governmental functions as continuation of Government department, exemption may be available; but when entity becomes commercial company competing in market, exemption is denied---NBP’s status was closer to commercial banking company than Government department. Cited Case: • Province of N.W.F.P. through Secretary Local Government & Rural Development, Peshawar v. Pakistan Telecommunication Corporation PLD 2005 SC 670 (k) Tax law---- ----Exemption from taxation---Burden of proof---Interpretation---Person claiming exemption from tax bears burden to establish entitlement---Exemption provisions are construed strictly and courts lean in favour of revenue rather than assessee where exemption is doubtful. Cited Case: • Army Welfare Sugar Mills Ltd. v. Federation of Pakistan 1992 SCMR 1652 (l) Punjab Urban Immovable Property Tax Act, 1958---- ----Property tax---NBP branches/properties---Liability---Notices issued by Excise & Taxation Officer/Assessing Authority for payment of property tax were lawful---Orders of Excise & Taxation Officer and revisional authority declining exemption were maintained. (m) Constitutional petition---- ----Challenge to tax demand notices---NBP claiming Federal Government immunity---Dismissal---Where petitioner failed to show that its properties were properties of Federal Government within meaning of Art.165, constitutional petitions against property tax demand notices were dismissed. Disposition: W.P. No.6976 of 2005 and connected W.P. Nos.6977 and 6978 of 2005 were dismissed; notices/orders demanding property tax from National Bank of Pakistan under Punjab Urban Immovable Property Tax Act, 1958 were maintained; NBP was held not entitled to exemption under Art.165 of Constitution or S.4(a) of Act, 1958.

Summary: PLJ 2008 SC 472 [Appellate Jurisdiction] Present Sardar Muhammad Raza Khan Nasir - ul - Mulk JJ Haji FAQIR HUSSAIN 7 others - - Petitioners versus SECRETARY PROVINCIAL BOARD OF REVENUE NWFP PESHAWAR 15 others - - Respondents Civil Petition No 328 - P of 2003 decided on 492007 (On appeal from the judgment and decree dated 1232003 passed by the Peshawar High Court Peshawar in Civil Revision No 627 of 2000) West Pakistan Urban Immovable Property Tax Act 1958 (V of 1958) - - - - - - S 3 - - NWFP Local Government Ordinance 1979 S 7 (2) - - Notification - - Demanded property tax from residents - - Question of - - No property tax could be imposed on the residents of area in - question merely on the basis of notification issued by Local Government Department unless a specific notification is issued uS 3 of the Urban Immovable Property Tax Act 1958 - - Appeal accepted [P 474] A Barrister Masood Kausar ASC with Mr Muhammad Zahoor Qureshi AOR for Petitioners Haji MA Qayyum Mazhar ASC assisted by Mr Farman Ullah Khattak Legal Advisor with Mr M Nazim AETO and Mr Arshad Javed Inspector Excise Department for RespondentsJudgement Result:Appeal accepted.

Summary: (a) Constitution of Pakistan ---- Art. 199—Maintainability—Availability of alternate statutory remedy—Doctrine of exhaustion of remedies Petitioner, a charitable educational institution, assailed the levy of property tax and conservancy charges imposed under Regulation No. 51 dated 23.11.2022—Held, where alternate and efficacious remedies are available under the statutory scheme, constitutional jurisdiction under Art. 199 cannot be invoked without first exhausting such remedies—Petitioner had remedy before the Assessment Committee under S. 68(2) of the Cantonments Act, 1924, and further rights of appeal, review, and revision under Ss. 84, 88 & 277 of the Act—Writ petition held premature and not maintainable. Cited cases: Province of Punjab v. Yasir Majeed Sheikh (2021 SCMR 624); Sana Jamali v. Mujeeb Qamar (2023 SCMR 316); Mian Azam Waheed v. Collector of Customs (2023 SCMR 1247); Fayyaz Dawar case (2023 SCMR 1442); Syed Masood Ali v. Mst. Feroza Begum (PLD 2025 SC 339); Executive Director State Life v. Muhammad Nisar (2025 SCMR 249). (b) Companies Act, 2017 ---- S. 42—Charitable institutions—Exemption from tax—Scope and conditionality Petitioner, registered as a Section 42 company for charitable educational purposes, claimed exemption from property tax under Notification dated 15/16.05.1956—Held, claim for exemption is conditional and must be substantiated by compliance with relevant policy directives, including provision of requisite information under para 2 of Policy Letter dated 08.05.2009 issued by Military Lands and Cantonments Department—Petitioner directed to pursue statutory procedure for exemption by first approaching Assessment Committee. Cited cases: Dr. Abdul Nabi v. Executive Officer, Cantonment Board, Quetta (2023 SCMR 1267); PLD 2021 Lahore 86; 2021 MLD 346; 2020 PTD 1683; 2018 CLC 1602; PLD 2017 Lahore 790. (c) Cantonments Act, 1924 ---- Ss. 68(2), 84, 88 & 277—Assessment Committee—Jurisdiction—Procedure for tax exemption and appeal Held, Cantonments Act, 1924, provides comprehensive mechanism for assessment and dispute resolution relating to property taxation—Petitioner must first approach the Assessment Committee for redressal under S. 68(2), and avail remedies of appeal, review, or revision under Ss. 84, 88, and 277, respectively—Court cannot bypass specialized forums created under the statute. Principle: Constitutional jurisdiction cannot override legislative intent where an effective statutory framework exists. Disposition: Writ petition disposed of without adjudication on merits—Petitioner directed to appear before Assessment Committee with all requisite documents and supporting material—Committee to decide matter through a speaking order within four weeks of receiving certified copy of the judgment.

Summary: (a) West Pakistan Urban Immovable Property Tax Act (V of 1958)----S. 10(2): Revisional power of Additional Director General---Competence---Refund of excess property tax. The Additional Director General, Excise and Taxation Punjab, revised the valuation of the respondent's property for property tax purposes, reducing it significantly. This decision resulted in an order for the refund of excess property tax paid by the respondent. The High Court upheld the competence of the Additional Director General to issue the revisional order under S. 10(2) of the Urban Immovable Property Tax Act, 1958. The petitioners' challenge to the legality of the order was rejected, with the High Court directing the refund of the excess amount within one month. (b) West Pakistan Urban Immovable Property Tax Act (V of 1958)----Review powers---Non-existence of review provisions in the Act: The petitioners contended that the review of the revisional order by the Executive District Officer (EDO) was lawful. The respondent countered, arguing that the Act does not provide for a review mechanism, and the attempt to initiate a review was solely to delay or deny the refund. The Supreme Court refrained from commenting on the review's legality, as the matter was pending adjudication before the EDO. However, the Court directed the EDO to decide the review petition expeditiously while carefully examining the availability of review powers under the Act. (c) Constitution of Pakistan (1973)----Art. 185(3): Supreme Court's refusal to grant leave---No infirmity in High Court's judgment. The Supreme Court found no legal infirmity in the High Court’s judgment, which had upheld the validity of the revisional order and directed the refund of the excess amount. Leave to appeal was refused, and the High Court’s decision was affirmed. -----Disposition: Petition dismissed. EDO directed to decide the review petition by 15th July 2003.

Summary: The petitioner planned to develop this land into a housing scheme named "Mubarak Town." However, issues arose when the local Patwari refused to issue Fard Malkiat necessary for plot sales, citing unpaid Capital Value Tax (CVT) on a general power of attorney from 2016 between respondents no. 4 and 5. The petitioner, not being a party to that power of attorney, contested the legal basis for this refusal through a writ petition. ----Issues: 1. Whether the notice to recover CVT from respondent no. 4 affects the petitioner's right to Fard Malkiat despite him not being involved in the original power of attorney transaction. 2. Whether the petitioner qualifies as an "aggrieved party" under Article 199 of the Constitution of the Islamic Republic of Pakistan, enabling him to challenge the notice. ---Holding/Reasoning/Outcome: The court determined that the petitioner qualifies as an "aggrieved party" because the refusal to issue Fard Malkiat directly impacts his property rights, even though the tax demand was originally against another party (respondent no. 4). It was ruled that the notice and subsequent refusal to issue Fard Malkiat were without lawful authority, thus granting the petitioner the right to have Fard Malkiat issued. The court also noted that respondents no. 1 to 3 are still free to pursue recovery of CVT as applicable, but not at the expense of the petitioner’s rights. ---Citations/Precedents: Civil Petition No.2926 of 2016 - Supreme Court upheld levy of CVT on power of attorney executed in favor of strangers. Mian Fazal Din v. Lahore Improvement Trust and another (PLD 1969 SC 223) - Expanded the interpretation of "aggrieved person." Hafiz Hamdullah v. Saifullah Khan and others (PLD 2007 SC 52) - Defined "aggrieved person" as someone who has suffered a legal grievance due to wrongful action against his legal rights. Associated Cement Companies Ltd. v. Pakistan through the Commissioner of Income Tax, Lahore Range and others (PLD 1978 SC 151) - Discussed the importance of clear and unambiguous language in statutes imposing financial obligations. Sub-Registrar (Rural), Tehsil and District Rawalpindi, etc. v. Muhammad Ilyas (C.P. No.2926 of 2016) - Discussed the application of CVT to power of attorney. Bisvil Spinners Ltd. v. Superintendent, Central Excise & Land Customs Circle, Sheikhupura and another (PLD 1988 SC 370) - Highlighted the need for strict construction in tax statutes.

Summary: Property Tax on property of KPT is payable and is not exempt, whereas, the Plaintiff / Tenant pursuant to lease Agreement is liable to pay the same.