1987 PLP 9 (SCMR)

Date of hearing: 22nd October, 1986. ABDUL KADIR SHAIKH, J.‑‑Facts of this case briefly stated are that the appellant‑Company is running a hotel in a portion of Kashmir building, situated on McLeod Road, Lahore. The hotel comprises of 232 lodging units which, in the relevant years, were rented out at Rs.7 each, per day. Out of above accommodation, 117 units were said to have the provision of telephone‑apparatus to cater for use within and outside the premises. For this service, there was additional hotel‑charge at Rs.2.50 per day. In 1965, West Pakistan Finance Act, 1965 (Act 1 of 1965) was enacted with effect from 1st July, 1965, which under its section 12, imposed tax on such hotels the minimum daily charge for a single lodging unit of which, including charges in respect of fan, air‑condition, light and heat exceeded Rs.7 per day. The case of the appellant was considered by the District Excise and Taxation Officer who by the order, dated 14th June, 1966 held that the lodging‑units installed with telephone facility, charged at Rs.9.50 per day, were liable to tax. This order was challenged before the Director, Excise and Taxation who finally, by the order, dated 18th November, 1966, took the view that as the telephone charges were entirely separate, these could not be covered by the provisions contained in section 12(2)(b) of the Act, and, therefore, set aside the demand of the tax. Later, however by the West Pakistan Finance (Amendment) Ordinance, section 12 of the Act was amended with retrospective effect, in that, the following explanation was added, and it was deemed to have been always so added. The amended provision reads as under:‑ "Section 12(i)(b).‑‑No tax shall be levied on any hotel where the maximum daily charge for a single lodging unit does not exceed Rs.7. Explanation.‑‑ In this subsection, maximum daily charge for single lodging t includes charges in respect of fans, air‑condition, light, heat, telephone, bedding and all other payments connected with the lodging unit, except the portion, if any, directly attributable to supply of foodstuff." After the above amendment in the law, the Excise and Taxation Officer, Lahore, by the memorandum, dated 3rd June, 1970, called upon the appellant‑Company to deposit Rs.42, 440 as tax for the year 1965‑66 immediately, and further directed the appellant to produce the accounts in respect of all the lodging units of the hotel during the years 1966‑67, 1967‑68, 1968‑69 and 1969‑70 within a week of the receipt of the said letter in order to determine the amount of tax recoverable from the hotel. Appellant challenged this order in a Constitution petition in Lahore High Court and the learned Judge who heard the case held by the impugned judgment, dated 22nd March, 1977 that the Amending Ordinance did not affect the tax in respect of the year 1965‑66 as it was a "past and closed transaction" which cannot be re‑opened but so far as the rest of the years were concerned, the Excise and Taxation Department was entitled to assess the tax as the tax liability for those years had not been finalised when the Amending Ordinance came into force. Leave to appeal was granted from the judgment of the High Court by this Court in order to examine the plea raised on behalf of the appellant that notice of levy of tax should have been issued within a reasonable time before the end of the years concerned, and since no such action was taken, the matter of tax‑liability was deemed to be a past and closed transaction. At the hearing today learned counsel for the appellant, however, raised a totally different plea in support of the appeal, and it is that the question of recovery of tax for the years from 1967‑68 to 1969‑70 had also become past and closed transactions, as was in respect of the year 1965‑66, and on the reasoning that prevailed with the learned Judge in the High Court, the appellant is also not liable to pay the tax for the remaining years. We find that this plea was neither raised in the Constitution petition nor at the hearing before the High Court. On the other hand learned Assistant Advocate‑General who appears for the respondent vehemently denied the assertion made by the learned counsel for the appellant that the question of tax recovery for the years from 1967‑68 to 1969‑70 or any of those years was finalised before the Amending Ordinance was enforced. According to the learned Assistant Advocate? General, appellant had not even submitted the tax return, nor the accounts in respect of the lodging units for any of the aforesaid years. It was also not shown before the High Court that the question of tax recovery had been finalised before the Amending Ordinance came into, effect. We, therefore, cannot find any fault with the High Court fort reaching the conclusion that the second part of the impugned memorandum dated, 3rd June, 1970 issued by the Excise and Taxation Officer Lahore to the appellant requiring the production of the accounts in respect of the lodging units for the years 1967‑68 to 1969‑70 was valid' in law. For these reasons, there is no merit in the plea raised by the learned counsel in support of the appeal. The pleas on which the leave to appeal was granted were not urged at the hearing of the appeal and these are, therefore, recalled from the leave granting order, and the appeal is dismissed with no order as to costs. M.I.???? ????? ????????????????????????????????????????????????????????????????????????????????????????? Appeal dismissed.