Last Updated: Wednesday April 16, 2008
His Excellency
Mr.
Pervaiz Musharraf
President
Islamic
President
House
Phone No. 0092-51-???.
|
Ref.
No. |
NLA/ 2007/057 |
Date: |
|
Subject: Application
of the Land Revenue Act, 1967, on the areas not meant for under the law,
Capital Value Tax and certain other issues.
Dear Sir,
FOR ENTIRE
With due respect,
some factual aspects on the application of subject law are hereby brought in your
kind notice in the wider interest of nation.
Section 3 of the
subject law is reproduced below:---
“3. Exclusion of certain land from operation of this Act.--- (1) Except so far
as may be necessary for the record, recovery and administration of village-cess,
or for purposes of survey, nothing in this Act applies to land which is
occupied as the site of a town or village, and is not assessed to land revenue.
(2) It
shall be lawful for the Collector acting under the general or special orders of
the Board of Revenue, to determine, for the purposes of this Act, what lands
are included within the site of a town or village, and to fix and from time to
time to vary the limits of the same, regard being had to all the subsisting
rights of the land owners.”
As the section
3(1) of the Land Revenue Act, 1967 (hereinafter referred to as the “Act”)
clearly bars the application of the Act on the areas not meant for under the
law, why the Patwar Khanajats are existing and functioning in the urban areas
throughout
It is worth
mentioning here that locality of the Lahore is supposed to be a urban land in
the perspective of Valuation Table issued by Collector under section 27-A of
the Stamp Act, 1899, therefore need to remaining continue of Patwar Khanajats
becomes illegal.
Also please note
that section 116 of the same Act is inconsistent with section 3 which is
reproduced below:---
“116. Revenue survey may be introduced by Board of Revenue in any part
of Province:---(1) It shall be
lawful for the Board of Revenue, whenever it may deem expedient, to direct by
notification, the survey of any land in any part of the Province with a view to
the settlement of land revenue, the preparation of records-of-rights and
preservation thereof, or for any other similar purpose, and such survey shall
be called a revenue survey.
(2) A
revenue survey may extend to the lands of any village, town, or city generally,
or to such land only as may be specified in the notification.
(3)
Subject to the orders of the Board of Revenue, it shall be lawful for the
officers conducting any such survey to except[1] any land to which it may
not seem expedient that such survey should extend.”
The other reasons
necessitating to take action are as follows:---
In number of
verdicts of higher and superior courts, it has been held that mutation under
Act is neither ownership nor document but mere a record prepared and attested
on the bases of title deed made adopting the legal measures.
Record of the
revenue is meant for fiscal[2] purpose only and is
neither record of ownership nor it creates Title[3]. By this way record of the
revenue is nothing to do with urban area under Act.
All the
Sub-Registrars demand proof of ownership before granting permission for Local
Commission and before registration of Sale Deeds particularly in term of Fards
where property falls in Revenue whereas Registration Act, 1908, did not empower
Sub-Registrar to probe into ownership of property which was subject matter of
sale transaction[4].
As a matter of
policy, Sub-Registrar concerned collects the mutation fee and send a copy of
registered document to relevant Patwari for mutation but mutation is never
effected automatically without payment of Fee[5]. Such mutation is even
otherwise is illegal so far as law is concerned on urban land.
Mutation in
(12) Notwithstanding anything contained in the
foregoing subsection, the Revenue officer shall in cases of transfer by
registered deeds, have the mutations entered and attested within a period of
thirty days, on receipt of the registration memorandum alongwith a photo copy
of the registered deed, without summoning the parties.
Procedure in
Issuance of Fards
(Extracts from the register of periodic Record-of-Rights) for sale, loan,
surrender, gift, NEC etc. involve huge finance[6] however law does not
provide any provision for their issuance and these documents entail no legal
effect. It is not only illegal but big source of corruption and exploitation of
layman and the people having no knowledge of law.
It is notable
thing that the lives of the Revenue People particularly Patwaris is beyond
their ostensible sources. Properties which they hold such as expensive
accommodations, mobile phones, cars etc. are open secret to prove the
contention. People who cannot afford their shoes and dresses so far as their
monthly salaries are concerned, they use such expensive things! Lahore
Development Authority (LDA) is on the same footing. It is reasonable believe
that the amount collected as land revenue, annually, would not be so enough
than of whatever is gone in the pockets of revenue people. Would you like to
probe the matter? Would you like to take immediate action under existing
Pakistani penal laws?
You are humbly and
vehemently requested to make arrangement to put the record of revenue into fire
relating to land not meant for under the law for the prevention of its use any
more for the purpose whatsoever. Patwar Khanajats are required to be dismantled
immediately established for the areas not falling in the agriculture or
cultivating land.
-------------------
FOR
No authority could
produce Gazette Notification so far as the collection of tax on transfer of
immovable property is concerned but even than the same is being received
without any plausible and lawful authority. It clearly reflects that the all
amount which has still been received on account of TIP is illegal and without
lawful authority and needs to be reimbursed to the persons from it has been collected
with interest. No tax can be imposed without Gazette Notification.
Relevant portion
of the law relating to tax on the transfer of property is reproduced below:---
“3. Levy of tax.--A Local
Government for a Tehsil/Town may levy tax on the transfer of immovable property
situated within its limits as provided in Part II of the Second Schedule of the
Punjab Local Government Ordinance, 2001.
(2) The rate of
the tax shall be fixed as percentage of the amount of consideration of transfer
of property.”
The only available
letter of government is letter No. SO(Elec) (LG)2-1/2001, dated
It is obvious from
the language of the enactment that only “a
Local Government for Tehsil/Town may levy tax on the transfer of immovable
property”, but the above referred letter is issued by the authority not
competent to issue such thing, i.e., Government of the
Another error
crept in the law is that Part-II of the First Schedule does not contain the
provision relating to tax on transfer of immovable property but the same is
available in Part-III of the Second Schedule.
-------------------
FOR ENTIRE
Please recall the
legislation and notifications on the levy of Capital Value Tax on capital value
of assets.
Section 7 of the
Finance Act, 1990 (as amended from time to time) is reproduced:---
“7. Levy of tax on Capital Value of certain
things:- (1) A tax on the capital
value of assets, to be called the capital value tax, shall be payable by
every individual 1[, association of persons, firm or a company
which] acquires by purchase 2[gift,
exchange, 3[power of
attorney,] surrender or relinquishment of rights by the owner (whether
effected orally or by deed or obtained through court decree) except by
inheritance, or gift from spouse, parents, grand parents, a brother and a
sister] an asset or a right to the use thereof for more than twenty years, 4[
] 5[or purchase of modaraba
certificate or a registered instrument of redeemable capital as defined in the
Companies Ordinance, 1984 (XLVII of 1984), or shares of a public company,
listed on a registered stock exchange in Pakistan by a resident person defined
in section 81 of the Income Tax Ordinance, 2001 (XLIX of 2001)] such as is
specified in sub-section (2), 6[at the rates specified in that
sub-section].”
The language of
the above section in English clearly states that Capital Value Tax is not
applicable on Power of Attorney except where assets are acquired through it.
Even then Capital Value Tax is not applicable on Power of Attorney but on the
instrument by which assets are acquired/transferred such as Sale Deed, Gift
Deed, Exchange Deed, Surrender Deed, Relinquish Deed, or Court Decree etc.
It is understood
that Power of Attorney is not an “acquisition of assets” but mere delegation of
power to sign some other instruments including transfer deeds.
Registration
Authorities are consistently demanding not only the payment of Capital Value
Tax on Power of Attorneys but at the rate of 2% of DC Rate even where value is
not recorded, without annexing any support of law.
On the complaint
to IT Authorities, they do not reply the pubic queries indispensably. Their
replies are indigestible thinking thus not acceptable even to the person of
common prudence.
Please take notice
whether any authority in
There is no any
legal document in English Language supporting the impugned contention of
Registration Authorities, as stated earlier.
In the light of
above, you are therefore, requested to please bring us out of this dilemma
taking measures to stop illegal practice of charge of Capital Value Tax on
Power of Attorneys.
Also please note
that what will ensue if it is presumed that Capital Value Tax has been levied
on Power of Attorney? Following is notable:---
1. It amounts Double
Taxation, once at the time of execution of Power of Attorney which is merely
delegation of authority and secondly at the time of an execution of conveyance
deed.
2. Levy of Capital
Value Tax on Power of Attorney amounts taxation without transaction of
conveyance.
3. Definition of
Urban Areas in Notifications is not in conformity of earth realities.
4. Cultivation area
is also included in the definition of Urban Area which is undesirable.
Cultivation areas are also subject to land revenue.
5. Under the
Notifications of Central Board of Revenue all the target deeds are conveyance
deeds except to Power of Attorney.
6. Power of Attorney
is a deed, which can be revoked at any time on the behest of its Maker or Donor
or Principal. What will be the status of Capital Value Tax when the same will
be revoked? Therefore, so called, levy of Capital Value Tax on Power of
Attorney is, in any way, unreasonable
and inconsistent.
7. Capital Value Tax
is levied in the pretext of prevention of speculation of land so that its
prices may be controlled. Power of Attorney is not subject matter of such contention
of parliament. This contention was also expressed in News Clippings.
8. Even it is
presumed that Power of Attorney is transfer of property then Capital Value Tax
may also be levied on Rent Deeds and Lease Deeds. It may also be extended on
the
Till now
Registration Authorities have collected billions of rupees on account of
Capital Value Tax on Power of Attorneys. Central Board of Revenue is on the
back of such Registration Authorities. They have caused huge financial loss to
general public. Would you like to send Reference
against these authorities on appropriate forum?
Please resolve the
problem at your earliest as the matter has became headache for the general
public.
-------------------
FOR ENTIRE
Under section 27-A
of the Stamp Act, 1899, Valuation Table can be issued only for the urban
property but Collectors’ include the agricultural property also in Valuation
Table, which is beyond their authority. It is wrongful loss to general public
on the one hand and wrongful gain on the other hand to public exchequer. Why?
This practice may be eliminated at once and wrongful gain may be reimbursed to
those from whom it is received wrongfully.
-------------------
FOR
This refers to
Notification No. 13-2004/31-ST(I), dated
According to
Clause B(iv) of the said Notification, the maximum Stamp Duty payable for the
mortgage deeds for housing finance executed in favour of Banking Companies of
every denomination has been fixed to Rs. 1,500/-.
All Deputy
District Officers (Registration)/Sub-Registrars in
Please resolve all
the matters in accordance to law.
Yours
faithfully,
Nasir Nazir Butt
for NASIR
LAW ASSOCIATES
c. c.: Prime
Minister of Islamic
The Chairman,
Revenue Division, Central Board of Revenue,
The
Secretary Revenue, (Federal & Provincial).
The
Secretary Finance (Federal & Provincial).
Law
Commission of Islamic
Chief Ministers Punjab, Sindh, NWFP, &
Governors Punjab, Sindh, NWFP, &
Executive District Officer,
District Officer (Revenue),
Deputy District Officers (Revenue),
All Deputy District Officers (Registration),
Deputy District Officer (Revenue –
Consolidation),
All leading papers of
No. 251-2008/713-ST(I)
Board of Revenue,
To
Mr. Nasir
Nazir Butt
Advocate High Court
R/o 47-D/2,
Shah Kamal, Near Mosque
Aouqaf, Ichhra
SUBJECT: APPLICATION OF THE LAND REVENUE ACT,
1967, ON THE AREAS NOT MEANT FOR UNDER THE LAW, CAPITAL VALUE TAX AND CERTAIN
OTHER ISSUES.
MEMORANDUM:
Reference
No. NLA/2007/057, dated
2.
It is to
inform that the matter regarding Stamp duty & Registration on mortgage
deeds for Housing Finance has already been considered and also issued a letter
to the District Officer (Revenue), in the PUnjab, vide Memo: No.
726-2007/378-ST(I), dated 22-5-2007 (copy enclosed for ready reference).
CHIEF INSPECTOR OF STAMPS
BOARD OF REVENUE,
….
No. 726-2007/378-ST(I)
Board of Revenue,
To
All District Officers
(Revenue)
In the
Subject: CHARGE OF STAMP DUTY AND
REGISTRATION FEE ON MORTGAGE FOR HOUSING FINANCE.
Memorandum:
Please refer to the
subject cited above.
2. The Provincial Chief, House
Building Finance Corporation, NWFP pointed out that the Board of Revenue,
Punjab issued instructions vide Notification No. 13-2004/31-ST(I), dated
10-1-2004 and No. 13-2004/38-ST(I), dated 10-1-2004 for charging of Stamp Duty
& Registration Fee on mortgage for Housing Finance at the rate mentioned
under Clause B of the said Notifications. Whereas the Sub-Registrars are still
charging Stamp Duty @ Rs. 0.25% and Registration Fee @ Rs. 0.25% from the
clients of House Building Finance Corporation.
3. All the Sub-Registrars in
your respective district may be directed to employ with the instructions issued
by the Board of Revenue,
SECRETARY
(SETTLEMENTS)
BOARD
OF REVENUE
No. 726-2007/379-ST(I)
A copy is forwarded for information
to:---
1.
The
Provincial Chief, House Building Finance Corporation
2.
The
Provincial Chief (
SECRETARY
(SETTLEMENTS)
BOARD
OF REVENUE
….
Author’s Opinion: This clarification does not serve the
purpose put up in the letter under reference.
[1] Probably the correct word is “exempt” rather “except”.
[2] Land revenue.
[3] 2007 YLR 1770, 2007 SCMR 729, 2007 SCMR 635, 2007 SCMR 236, PLD 2007 Supreme Court 287, 2007 MLD 1496, 2007 PLD 582, 2007 SCMR 1773, 2007 CLC 1580, 2007 CLC 36, 2007 MLD 1357, 2006 YLR 1464, 2004 SCMR 1530, 2004 CLC 203, 2004 YLR 2438, 2004 YLR 1188, 2004 YLR 1020, 2004 YLR 423, 2004 MLD 706, 2005 CLC 1571, 2006 CLC 1435, 2006 CLC 927, 2006 PLD 121, 2006 MLD 813, 2005 CLC 180, 2005 YLR 3253, 2005 YLR 1560, 2005 MLD 1152, 2005 CLC 745, 2004 PLD 147, 2004 SCMR 1723, 2004 CLC 1665, 2004 CLC 240, 2003 SCMR 780, 2003 CLC 857, 2003 CLC 1593, 2003 YLR 67, 2003 CLC 1220, 2002 PLC (C.S.) 522, 2002 CLC 300, 2002 YLR 2711, 2002 YLR 2636, 2002 MLD 334, 2002 CLC 88, 2002 YLR 2615, 2002 YLR 541, 2000 MLD 2015, 2000 YLR 2005, 2000 CLC 814, 2001 SCMR 609, 2001 SCMR 338, 2001 SCMR 1700, 2001 YLR 2256, 2001 YLR 2170, 2001 YLR 893, 2001 MLD 1654, 1999 MLD 2783, 1999 MLD 2302, 1999 MLD 1386, 1999 SCMR 1870, 1999 SCMR 1328, 1997 SCMR 974, 1996 MLD 1423, 1996 CLC 374, 1995 CLC 695, 1995 CLC 1816, 1995 CLC 1843, 1994 SCMR 1454, 1993 MLD 1078, 1993 MLD 763, 1991 CLC 127, 1991 SCMR 1990, 1989 MLD 3522, 1988 CLC 1812, 1988 CLC 1246, 1987 MLD 140, 1986 CLC 930, 1986 CLC 545, 1985 CLC 89, 1985 CLC 821, 1984 CLC 3413, 1984 CLC 3406, 1983 PSC 491, 1973 PLD 495, 1971 PLD 205, 1970 PLD 614, 1961 PLD 53, 1961 PLD 41.
[4] PLD 2007
[5] Heavy bribe.
[6] Illegally.
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