The Islamabad High Court (IHC) has ordered the federal government to dissolve the Capital Development Authority (CDA). In a written verdict, Justice Mohsin Akhtar Kayani ruled that the CDA has no legal authority to impose taxes.
The court stated that if any individual or institution has been charged by the CDA under the names of “direct access” or “right of way” charges, such amounts must be refunded. The federal government has been directed to begin and complete the process of dissolving the CDA.
Justice Kayani further ruled that, after dissolution, all powers and assets of the CDA should be transferred to the Metropolitan Corporation. The rights of Islamabad’s citizens must be safeguarded under the law.
The decision came in response to a petition filed by the Tijji Housing Society and its residents. In the judgment, the court nullified the CDA’s SRO (Statutory Regulatory Order) dated 9 June 2015 concerning right of way and access charges. All actions taken by the CDA under this SRO were declared illegal, and the court ordered that any money collected under it must be refunded.
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The judgment observed that the CDA Ordinance was originally enacted for the establishment of the federal government and for carrying out developmental work. However, with new legislation and governance structures in place, the ordinance has lost its practical relevance.
The court concluded that the purpose of establishing the CDA has now been fulfilled and that the government should proceed with its dissolution. It also directed that the administration of Islamabad must remain transparent and accountable after the transfer of powers.
Additionally, the verdict stated that all administrative, regulatory, and municipal functions in Islamabad fall under the Local Government Act, which provides for governance through elected representatives. Under this law, taxes cannot be imposed without the approval of the local government. Therefore, the CDA has no legal authority to impose taxes.
It is worth noting that the CDA had imposed right-of-access taxes on petrol pumps and CNG stations, and direct access taxes on private housing societies with roads connecting to main highways, all of which were challenged in the High Court.
