ISL AMABAD: In a significant development with far-reaching implications for the capital`s governance system, Justice Mohsin Akhtar Kayani of Islamabad High Court (IHC) has not only struck down a tax imposed by the Capital Development Authority (CDA) but also ordered the complete dissolution of the 65-year-old civic agency, directing allitsfunctions and assets to be transferred to the Metropolitan Corporation Islamabad (MCI).

In a 27-page judgement on a petition filed by owners of fuel stations on Islamabad Expressway, the judge declared SRO No 576(I)/2015, which imposed right of way (ROW) charges on housing societies and businesses accessing major roads, `illegal, ultra vires and without lawful authority.

The court ruled that the CDA had no legal authority to impose ROW charges after the enactment of the Islamabad Capital Territory (ICT) Local Government Act 2015.

The court found the SRO in violation of constitutional mandates (Articles 77 and 140A), requiring taxation powers to rest with parliament and devolved local governments.

The judgement confirmed thatSection 15-A of the CDA Ordinance 1960, which previously allowed the civic agency to perform municipal functions, stood repealed by the 2015 Local Government Act. CDA`s reliance on it was `not permissible by any stretch of imagination.

All municipal functions, especially taxation, now lie exclusively with the elected MCI under the ICT Local Government Act 2015. The CDA has `no jurisdiction or authority` to impose or collect such levies, the court ruled.

It directed the federal government to initiate the dissolution of the CDA under Section 52 of its founding ordinance, transferring all `powers, assets, and functions to the Metropolitan Corporation Islamabad(MCI).` The judgement stated that CDA has `lost its operative relevance.

Justice Kayani also ordered that all ROW charges collected under the illegal SRO must be refunded to affected entities and individuals.

The judgement dismantled CDA`s legal arguments and found the concept of `Right of Way charges` alien to Pakistan`s tax law, absent from the CDA ordinance, the repealed Municipal Administration Ordinance 1960 and the schedules of the ICT Local Government Act 2015.

The CDA failed to follow mandatory procedures for imposing taxes, such as public notification, inviting objections and holding hearings requirements under both the old MAO 1960 frame-work (while Section 15-A was active) and the current ICT LGA 2015.

`The ICT Local Government Act 2015, being a special and later law, implicitly repealed CDA`s municipal powers (specifically Section 15-A) when establishing the elected MCI.

The two frameworks cannot stand together,` read the judgement, adding taxation must serve a public purpose and be levied by elected representatives or under parliamentary authority. An unelecte d body like CDA imposing charges on citizens violated Articles 23 and 24 of the Constitution protectingproperty rights.

The judgement reinforces the MCI`s supremacy in local governance observing that only MCI can levy municipal taxes, strictly following procedures under Sections 88, 89 and 90 of the ICT LGA, including public proposals and hearings.

As per the court order, all property tax and similar levies collected by CDA after 2015 rightfully belonged to MCI. The auditor general was ordered to audit and ensure transfer of these funds.

MCI was instructed to prepare schemes to deliver essential utilities (water, sanitation, roads) within union councils funded by lawfully collected taxes.

Justice Kayani concluded: `It is now time... to formally dissolve the Authority [CDA] as its original mandate has been fulfilled.

The entire administrative, regulatory and municipal framework... is now governed under the ICT Local Government Act, 2015. The transition aims to establish a transparent, accountable and lawful municipal framework` for Islamabad`s citizens.