LAHORE: Lahore High Court Justice Umar Ata Bandial on Friday extended stay against the recovery of capital value tax (CVT) from the employees’ old-age benefits institution (EOBI) and its officers until February 22.

The judge also gave time to the Punjab government law officer to file his reply by the next hearing.

The petitioner, EOBI had challenged the imposition of CVT by the provincial government under section 6 of the Punjab Finance Act, 2010.

The judge had already restrained the tax department from taking coercive measures for the recovery of CVT from the institution, and sought replies from the Board of Revenue and other respondents.

The petitioner’s counsel, Mansoor Usman Awan, submitted that the CVT had first been levied by the federal government under section 7 (pf) of the Finance Act, 1989. He said that after the 18th Amendment, the power to collect CVT had not been transferred to the provinces and this was apparently the first demand and recovery notice sent by the provincial government through the Board of Revenue to a statuary body.

Awan argued that section 6 of the act imposed CVT on transfer of immoveable property by a person, which did not include a statutory corporate body like the petitioner, and pertained to transfer between members of a family which again was not a transaction undertaken by the petitioner (EOBI) as a transferee from the Ministry of Defence.

He requested that the impugned notice issued to the petitioner should be declared unconstitutional and without lawful authority.