Interim relief: Cantonment board barred from imposing property tax

ABBOTTABAD: The Peshawar High Court Abbottabad bench has granted interim relief restraining the Cantonment Board Abbottabad from imposing property taxes or taking coercive action against residents.

This decision, issued on July 2, 2025, reinforced constitutional limits on federal taxation powers and followed a complex legal battle spanning 18 months.

On January 24, 2024, Advocate Hashim Iqbal Jadoon filed a constitutional petition arguing that the Cantonment Board Abbottabad lacked constitutional authority to levy property tax. The petitioners contended that under Entry 50 of the Federal Legislative List (FLL), only provincial legislatures hold the power to tax immovable property - a division reinforced by the 18th Amendment’s devolution of powers.

The high court initially granted interim relief in early 2024, halting tax collection efforts.

The legal landscape shifted in October 2024 with the passage of the 26th Constitutional Amendment, which added local taxes, fees, cess, charges, tolls in such areas to entry 2 of the FLL. This prompted concerns that cantonment boards might now claim authority to impose property taxes, despite the clear reservation of this power to provinces under Entry 50.

In response, Advocate Hashim Iqbal Jadoon filed a fresh petition on behalf of Abbottabad Cantonment residents, arguing that the 26th Amendment did not override Entry 50 or transfer property taxation powers to federal entities.

The petition challenged the constitutional validity and interpretation of the amendment, asserting that cantonment boards remained barred from levying such taxes.

On July 2, 2025, the Peshawar High Court again granted interim relief, specifically restraining tax collection by the Cantonment Board and prohibiting sealing of properties and barring any adverse action against petitioners

The order implicitly endorsed the petitioners’ interpretation that federal bodies cannot usurp provincial taxation powers, casting doubt on the Cantonment Board’s authority under the 26th Amendment.