LAHORE: The applications filed by taxpayers, including former federal minister Chaudhry Moonis Elahi, challenging the imposition of capital value tax on assets outside of Pakistan, were dismissed by the Lahore High Court (LHC) on Thursday.
The petitioners argued that the Federal Board of Revenue (FBR) lacked the authority to tax its nationals for holding real estate overseas.
They claimed that since the property tax was a matter for the provinces, the federal government had no right to meddle as the tax collection notifications sent out by the FBR were already challenged in court.
Furthermore, Assistant Attorney General Sheraz Zaka opposed the applications, claiming that the capital value tax on the immovable assets was a federal matter.
He cited a 1992 ruling in support of his claim that nothing had changed notwithstanding the 18th Amendment, and no law, according to him, could be ruled illegal because of extraterritoriality.
Besides, according to the law office, the courts shouldn’t become involved in policy issues, particularly those related to the economy and fiscal laws.
He claimed that legislation passed by the legislature should be presumed constitutional by the courts.
The petitions were rejected by Justice Asim Hafeez, who also upheld the validity of the contested show-cause notifications that the FBR had sent to the petitioners.
