KARACHI: A divisional bench of High Court of Sindh (SHC) comprising Justice Munib Akhtar and Justice Abdul Malik Gaddai on Friday reserved judgment in a case questioning levy of Capital Value Tax on land leased for industrial or commercial purpose.
Shaikh Muhammad Abdullah, Executive Director of Nawab and Company filed the petition against Sub Registrar, Gadap Town, Chairman FBR and Additional Commissioner East, Enforcement and Collection, Division III, Regional Tax Office (RTO).
According to details of the case available with customnews.pk, petitioner got 64 acres of land on lease granted by the Sindh government in Deh Mokhi, Gadap Town for Tourism and Leisure Industry Project. The petitioner paid an amount of rupees 11,99,100 for registration of lease besides paying stamp duty of rupees 28,52,000 and then moved registration authority for registration of lease. The petitioner was to pay an amount of rs 18,68750 per acre being 25 per cent of market value of per acre land at a rate of rupees 74,75000. The registering authority raised a demand for payment of Capital Value Tax which was the subject matter of the instant petition.
Today a number of petitions pertaining to levy of CVT were fixed before the bench. The bench heard the counsel for Nawab and Company at length besides Kafeel Ahmed Abbasi, counsel for FBR, Additional Advocate General Sindh Saifuddin.
The bench noted that the subject land was leased out to the petitioner entitling him to “right to use” and not given as asset. The land was not purchased and thus do not fall within the purview of laws and charging section (Section of Finance Act which allows levy of CVT on industrial property).
The counsel for respondent FBR and Land Utilization Department, Government of Sindh defended the demand and levy of CVT. The bench later reserved the judgment while detaching the other petitions on CVT.