LUMS Exempt From Cantonment Property Tax Before 2023 Amendment

What happened

The Lahore High Court has ruled that the Lahore University of Management Sciences (LUMS) is exempt from cantonment property tax for periods before a 2023 amendment to the Cantonments Act, 1924. This decision was made after LUMS and the National Management Foundation, the non-profit society that established the university, filed a petition against the Cantonment Board’s demands for property tax. The court declared that the conditions requiring buildings to be open to the public and generate no income did not apply to educational institutions under the earlier law.

The dispute centered on Section 99(2)(b) of the Cantonments Act, which provided exemptions for educational buildings. LUMS argued that the conditions concerning public access and the absence of income did not apply to educational institutions under the provision’s earlier wording. The court agreed with LUMS, stating that the 2023 amendment introduced a substantive change that could not be applied retrospectively.

Who is affected

The ruling affects LUMS and potentially other educational institutions in cantonment areas. The court’s decision clarifies that educational buildings are exempt from property tax under the earlier law, and that the mere charging of tuition fees does not establish a commercial purpose. This decision may have implications for other universities and colleges in similar situations.

The National Management Foundation, the non-profit society that established LUMS, is also affected by the ruling. The foundation had filed the petition along with LUMS, and the court’s decision is a victory for the foundation’s efforts to secure exemption from property tax for the university.

Key dates and details

The Cantonment Board had been demanding property tax from LUMS since 2007, but the university had contested the levy, claiming exemption under Section 99(2)(b) of the Cantonments Act. The board’s demands were based on the assumption that LUMS was not exempt from property tax because it charged tuition fees and generated income. However, the court has now ruled that this assumption was incorrect.

The 2023 amendment to the Cantonments Act introduced changes to the exemption provisions, including the requirement that educational buildings be open to the public and generate no income. However, the court has ruled that this amendment cannot be applied retrospectively, and that LUMS is exempt from property tax for periods before the amendment.

What you should do

If you are a student or staff member at LUMS, you do not need to take any action in response to this ruling. The court’s decision is a victory for the university, and it will not affect your studies or employment.

If you are an administrator or manager at another educational institution in a cantonment area, you may want to review your institution’s exemption status in light of this ruling. You should consult with your institution’s legal counsel to determine whether you are eligible for exemption from property tax under the earlier law. You may also want to consider filing a petition with the relevant authorities to secure exemption from property tax.