P L D 1985 Lahore 347 (PLP)

3. - Petitioner took the matter in revision which, too, was dismissed by the Commissioner Lahore Division vide order dated 14-11-1964. Learned Commissioner relying on a judgment of this Court reported as P L D 1963 (W. P.) Lah 517 and the Departmental instructions reproduced in his order held that the provisional transferees of evacuee properties were liable to pay the tax.

4. Feeling aggrieved with the afore-referred orders, petitioner approached this Court through a petition under Article 98 of 1962 Constitution to have the impugned orders quashed and to seek a declaration that the demand of the property tax for the aforementioned' period was without lawful authority.

5. Learned counsel appearing in support of this petition submitted that the property in question after its acquisition under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act; XXVIII of 1958, hereinafter described as Act XXVIII of 1958 vested in the Central Government wholly and absolutely, free from all encumbrances and as such it was exempt from the . property tax by virtue .of the provisions contained in section 4 of Act V of 1958. For better appreciation of the submission made by the learned counsel, provisions relied upon by him may be referred to. Relevant provisions of section 3 of Act XXVIII of 1958 are as follows : "3. (1) Power to a4quire evacuee property.-The Central Government may for any of the purposes. of this Act, by Notification in the official Gazette, acquire any Evacuee Property within the Federal Territory of Karachi other than Agricultural Land. (2) As and when so required by the Central Government the Government of West Pakistan shall, for any of the purposes of this Act, by notification in the official Gazette, acquire such evacuee property, other than agricultural , land situated in the province excluding the Federal Territory of Karachi, as the Central Government may deem it necessary to acquire. (3) On the publication of a Notification under subsection (1) or subsection (2), the right, title and interest, of any evacuee in the evacuee property specified in the Notification, shall with effect from the date, of such publication, be extinguished, and the evacuee property shall vest wholly and absolutely in the Central Government free from all encumbrances." Section 4 of Act V of 1958 in its relevant aspect is as under : "

4. The tax shall not be leviable in respect of the following properties, namely : (a) buildings acid lands vesting in the Federal Government ;

6. Precise argument of' the learned counsel for the petitioner on the basis of the afore-referred provisions was that since section 4 of Act V of 1958 provided that the tax shall not be leviable in respect of the buildings and lands vesting in the Federal Government and since the property in dispute, on the publication of Notification issued under section 3 of Act XXVIII of 1958', vested in the Central Government, it was exempt from the payment of property tax. It was further submitted by the learned counsel that the property continued to vest in the Central Government until the ' issuance of Permanent Transfer Deed. It was, therefore, argued that the demand of the property tax for the years in question was not sustainable in law. Argument of the learned counsel would have substance only if the word `vest' used in both the afore-referred provisions has the same meaning. It will, however,, be seen that the word `vest' used in these two provisions refers to two different concepts of ownership. Evacuee property acquired under section 3 of Act XXVIII of 1958 vested in the Federal Government for the purposes of the said Act. Federal Government did not own such a property in its full proprietary sense insofar as it could not use it for any of its own purposes or for purposes other than those of the Act. Reference to the relevant provisions of Act XXVIII of 1958 reproduced hereinabove would show that a limitation was imposed- on the Central Government in respect of the Evacuee Properties vested in it after acquisition. This limitation was contained in the words "for any of the purposes of this Act" which words qualify the acquisition and place all such acquired properties in a class by itself. Exact nature and scope of the `vesting' under section 3 of Act XXVIII of 1958 came to be examined in Abdus Salmn v. Waheeduddin (P L D 1963. Lab. 517) wherein it was held that "such property does not belong to or vest in the Government so as to entitle it to use it for its own purposes or for any purposes other than those of the Act. Such entire property thus does not vest in the Central Government in the sense in which, for instance, the property which devolved on it under Article 231, or accrued to it under Article 133, or was acquired by it under Article 134 of the late Constitution, vested in it." Similar view was expressed in Rahim Bakhsh v. Ch. Ahmad Bakhsh and others (P L D 1964 S C 189). Repelling' the argument that the property acquired by the Central Government under section 3 of Act XXVIII of 1958 was excluded from the operation of the Rent Restriction Ordinance by virtue of a Notification issued under section 3 of the said Ordinance, their Lordships of the Supreme Court held that the vesting of the property in the Central Government under section 3 of the Act XXVIII of 1958 was for certain purposes of the Act and not absolutely. It was observed in that case that "the notification under section 3 of the Ordinance is apparently designed to cover only those properties which vest in the Central Government, absolutely, as owners. The Central Government in the present case is under 'a statutory duty to dispose of the properties for the purposes of the Act, by its transfer to claimants and others. Undoubtedly, certain rights have been conferred by and under the Act on the P. T. O. holder. Section 30 of the Act declares that, persons in possession of any evacuee .property and those who have been declared to be tenants occupying such property, from a certain date, would be deemed to be tenants of the transferee on the same terms and conditions as to payment of rent or otherwise, on which they held it immediately before the transfer. Moreover, paragraph 37 of the Settlement Scheme No. 1, framed under section 16 (1) (b) and (c) of the Act, gives express right to lease out and mortgage the property, to a transferee. No doubt, he is not allowed to.. alienate the property otherwise and--may even forfeit his right of possession if he fails to pay off the sums due to. the Department. That however does not detract from the rights that he possesses so long as he observes the conditions of the transfer. It is not therefore correct to say that all rights in the property still vest. in the Central Government and that consequently, the case is taken out of the purview of the Ordinance, in pursuance of the notification issued under section 3 thereof".

7. The aforementioned pronouncements place it beyond doubt that the property acquired under section 3 of the Act XXVIII of 1958 vested in the Central Government' for purposes of the Act that not as an absolute owners.' `Vesting' of the property in the Federal Government as envisaged under B section 4 of Act V of 1958, on the other hand is in ordinary sense i. e. vesting in title as absolute owner with no qualifications, limitation or restrictions on its full rights of ownership. Exemption from property tax under C section 4 is available to the properties belonging to the Federal Government in the fullest sense of ownership. In the aforesaid view of the matter, I am clearly of the view that `vesting' under section 3 of Act XXVIII of 1958 and section 4 of Act V of 19j8 contemplates two different concepts and cannot be construed to convey the same meaning. Evacuee properties acquired under section 3 of Act D XXVIII of 1958 did not `vest' in the Federal Government within the meaning of section 4 of Act V of 1958 and as such 'they were not exempt from the property tax. Property in dispute was, therefore, liable to the property tax.

8. Apart from what has been held above, case may be examined from yet another angle. Property tax .was sought to be recovered from the petitioner after the property in dispute had been provisionally transferred to her and not for the period when it was held by the Central Government on its being vested in pit. After such a provisional transfer, property could: not be said to be the property of the Central Government notwithstanding the fact that the title therein did not pass fully and completely to the transferee. A transferee may not be taken to be an absolute owner under, the Displaced Persons Settlement Laws but he can still be treated as an. owner for certain other purposes and laws. It was so observed in an IE unreported case titled Habibullah and another v. The Director (Headquarters) Exise and Taxation Punjab (W. P. No. 3070 of 1976) decided on 1-2-1977.) In that case also, provisional transferees had. challenged the levy and demand of property tax and it was held that they wire liable to pay the property tax for the property provisionally transferred to them. Judgment in that case was, upheld by the Supreme Court of Pakistan and the case is reported V11 1983 S C M R 1323. View taken. by the learned Single Judge of this court was maintained by the Honourable Supreme Court that a provisional Transferee of evacuee property, though not-. full owner under Displaced Persons (Compensation and Rehabilitation) Act, 1958 was owner for the purposes of liability to pay the property tax. This view was, of course, expressed on the amended definition of "owner" in section 2 of Act V of 11958 which included a provisional transferee. Be that as it may, provisional transferee was liable to pay the property tax even before the definition of `owner' was amended. Paragraph 37 of the Settlement Scheme No. 1, as observed in P L D !964 S C 189 gave express right to a transferee to lease out and mortgage the property provisionally transferred to him which right is an incidence of ownership. If a provisional transferee could lease out the. property and recover the rent, he should no doubt be liable to pay the property tax. Needlees to emphasise that the rent includes the element of house or property tax. Liability of P. T. O. holders to pay the property tax was also duly notified through memoranda issued by the Chief Settlement Commissioner. Learned counsel appearing for the respondents drew my attention to the instructions issued by the Chief Settlement Commissioner on the subject of payment of house or, property tax of evacuee property transferred to claimants, non-claimants and locals. First memo. in this behalf was issued on 2nd of May, 1960 which is available at page 138 of the Manual of Settlement Law and Procedure, 1960 Edition and which is reproduced hereunder : "I am directed to refer to the above-mentioned subject and to state that in most of the cases the evacuee property have been transferred to claimants, non-claimants and locals under the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1958. The Provisional Transferees have been allowed to use the properties in any manner they like and they are not required to pay rent etc. to this Department. In such cases the Provisional Transferees are liable to pay the house taxes etc. It is, therefore, requested that instructions may kindly be issued to all the local bodies in West Pakistan to recover the tax from the Provisional Transferees from the date of issue of Provisional Transfer Orders." Second memo. dated 25th June, 1960 issued in this behalf is printed at page 204/205 of the aforesaid manual. Relevant portion of this memo. is to the following effect : "(v) Generally, rent includes the element of property or house tax. Since the transferees become entitled to recover rents of the properties transferred to them from the date of issue of Provisional Transfer Orders, they will be liable to pay such taxes of Government Department or Local Bodies from the date of issue of Provisional Transfer Order. The payment of such taxes for the period prior to the issue of P. T. O. will be governed by the rules to be notified by the Central Government under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, as amended to date".

9. Learned counsel for the respondents submitted that the memoranda; instructions afore-referred formed part of the terms and conditions of the provisional transfer of the evacuee properties and as such the petitioner was bound by these conditions and was, therefore, liable to pay the property tax from the date the property in dispute was provisionally transferred to her. F Submission of the learned counsel has considerable force. In fact, these instructions appear to be supported by the then existing definition of "owner" in Act V of 1958. Before its amendment in 1963, "owner" was defined as follows :. "owner" includes a mortgagee with possession, a lessee in perpetuity and a trustee having possession of a trust property." A provisional transferee; as noted above, was already clothed with some of the attributes of an "owner". He could certainly be equated with G a lessee in perpetuity or a trustee. Perhaps his status was better and superior. He would, therefore, fall within the scope of the aforequoted definition of "owner" and would be liable to pay property tax.

10. Liability of the provisional transferee to pay the property tax which even otherwise existed as indicated hereinabove was placed beyond any doubt by amending the definition of "owner" so as to include a provisional and permanent transferee of an evacuee property within its scope. Definition of "owner' as amended by West Pakistan Urban Immovable Property Tax (Amendment) Ordinance (XXVIII of 1963) is as follows :- "(a) "owner" includes a mortgagee with possession, a lessee in perpetuity, a trustee having possession of a trust property and a person to whom an evacuee property has been transferred provisionally or permanently under the Displaced Persons (Rehabilitation and Compensation) Act, 1958 (Act No. XXVIII 1958)."

11. Learned counsel for the petitioner submitted that the amending Ordinance of 1963 was made effective on and from the 1st day of July, 1963. He, therefore, argued that the petitioner could not be treated as "owner" so as to make him liable to pay the property tax for the period prior to 'the enforcement of the amending Ordinance. This argument loses sight of the fact that the liability of P. T. O. holder to pay the property tat from the date of issue of P. T. O. was already there. Amendment -made in the definition of "owner" only gave statutory recognition to the existing position. Even otherwise, amendment made in the definition of "owner" was declaratory and explanatory in nature. It was just intended to give statutory recognition to the position already existing. According to t consistent judicial interpretation, the declaratory statutes generally operate retrospectively. Blackstone J. in Nicol v. Verelet ((1779) 26_E. Rc 751) said declaratory statutes do not prove the law was otherwise before, but rather the reverse. A declaratory Act, said Coleridge, C. J. in Jones v(. Bannet ((1890) 63 L T 705) means to declare the law or to declare that which has always been the law, and there having been doubts which have arisen, Parliament declares what the law is and enacts that it shall continue what it then is.' Reference may be made to Messrs Dreamland Cinema, Multan v. Commissioner of Income-Tax, Lahore (P L D 1977 Lah.292). In view of the position aforestated, petitioner would be treated as "owner" for the purposes of property tax from the date the property in dispute was provisionally- transferred to her and not from the date of the Amending Ordinance. ,

12. In the aforesaid view of the matter, petitioner was liable to pay the property tax from the date the property in dispute was provisionally transferred to her. The impugned demand notice was, therefore, perfectly lawful. Resultantly this writ petition has no merit and the same is accordingly dismissed but there shall be no order as to costs in the facts and circumstances of the case. A. A.??? Petition dismissed.