The Islamabad High Court (IHC) has issued an interim order suspending the collection of property tax across the federal capital, providing significant relief to residents. This decision follows a writ petition challenging the tax levy imposed by the Metropolitan Corporation Islamabad (MCI).
Case Overview and Petitioner Arguments
The petition, filed by Muhammad Munir Ahmed Chaudhary and Ahmed Hasan Rana, challenges Gazette Notification No. 404(1)-4/2024 (dated March 14, 2024) and a specific property tax bill of PKR 846,398 issued in April 2026. The petitioners’ legal team raised several key contentions regarding the legality of the tax:
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Statutory Violations: The tax imposition was argued to be in direct conflict with the Islamabad Capital Territory Local Government Act, 2015, and the Urban Immovable Property Tax Act, 1958.
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Lack of Authority: Counsel argued that the MCI lacked the legal power under Section 89(1) of the 2015 Act to levy tax on the annual value of properties.
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Procedural Illegality: The notification was reportedly issued by an appointed administrator rather than an elected local government body, which petitioners claim violates Section 75(e) of the 2015 Act.
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Arbitrary Demands: The tax was described as "arbitrary" and issued without proper assessment or the opportunity for taxpayers to be heard, failing to meet the requirements of Section 3 of the 1958 Act.
Court’s Decision
Finding a prima facie case for interim relief, the court observed that the legal questions raised required a thorough examination. Consequently, the IHC:
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Suspended the operation of the impugned property tax bills until the next hearing.
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Issued notices to the MCI, the Directorate of Revenue, the Capital Development Authority (CDA), and federal government representatives.
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Adjourned the case for four weeks, during which time property owners are not required to pay the disputed tax bills.
This ruling serves as a test case for thousands of property owners in Islamabad who have faced similar tax demands
