Last Updated: Wednesday April 16, 2008

His Excellency

Mr. Pervaiz Musharraf


Islamic Republic of Pakistan

President House


Phone No. 0092-51-???.


Ref. No.

NLA/ 2007/057


February 04, 2008

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,


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 Pakistan?

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 Baluchistan effects automatically. Relevant portion of law is reproduced here below:---

Baluchistan Amendment

            (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 Punjab is also same. Sub-Registrar collects the mutation fee and send a memorandum along-with the copy of registered deed to Patwari concerned through proper channel but Patwari never honour such dispatch. Why?

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.



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 2nd July, 2001, issued by the Government of the Punjab, Local Government & Rural Development Department. This letter is issued by the Deputy Secretary (General).

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 Punjab.

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.



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 Pakistan except to National or Provincial Assembly has right to levy tax? Or is there any authority except to higher/superior courts to interpret law? May any authority impose its thinking to general public except to express provisions of legislation? Central Board of Revenue has levied Capital Value Tax on Power of Attorneys without any lawful authority.

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 Military Land in Cantonment Areas. Why these deeds and areas are excluded from the levy of Capital Value Tax?

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.



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.



This refers to Notification No. 13-2004/31-ST(I), dated 10 January 2004 of Government of the Punjab.

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 Lahore are not complying with the rates specified in the said Notification. They charge Stamp Duty @ 0.2% on the mortgage deeds executed in favour of Banking Companies for housing finance. This is contrary to the spirit of the said Notification.

Please resolve all the matters in accordance to law.


Yours faithfully,





Nasir Nazir Butt


c. c.:     Prime Minister of Islamic Republic of Pakistan.

The Chairman, Revenue Division, Central Board of Revenue, Constitution Avenue, ISLAMABAD.

            The Secretary Revenue, (Federal & Provincial).

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All leading papers of Pakistan – through e-mails.

No. 251-2008/713-ST(I)

Board of Revenue, Punjab

Lahore, dated the 10-04-2008


                        Mr. Nasir Nazir Butt

                        Advocate High Court

                        R/o 47-D/2, Islam Street, Karnal Pura

                        Shah Kamal, Near Mosque Aouqaf, Ichhra







                                    Reference No. NLA/2007/057, dated 04-02-2008, on the subject cited above.

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).





No. 726-2007/378-ST(I)

Board of Revenue, Punjab,

Lahore, dated 22nd May-2007





                        All District Officers (Revenue)

                        In the Punjab.






                        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, Punjab, in letter & spirit, vide notifications mentioned above (copies enclosed).



                                                                                    SECRETARY (SETTLEMENTS)

                                                                                    BOARD OF REVENUE PUNJAB


No. 726-2007/379-ST(I)


            A copy is forwarded for information to:---


1.                  The Provincial Chief, House Building Finance Corporation Peshawar, with reference to his No. HBFC/ZOP/PC/2007/2202, dated 27-4-2007.

2.                  The Provincial Chief (Punjab), House Building Finance Corporation, Z.O.Lahore.



                                                                                    SECRETARY (SETTLEMENTS)

                                                                                    BOARD OF REVENUE PUNJAB



Author’s Opinion: This clarification does not serve the purpose put up in the letter under reference.

September 15, 2003

[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 Lahore 490.

[5] Heavy bribe.