P L D 1976 Karachi 712 (PLP)

ABDUL KADIR SHEIKH, C.J.-Petitioners in all these five Constitution petitions own cinema-houses in the limits of Karachi, Malir and Hyderabad Cantonments. They have challenged the authority of the Provincial Govern ment to impose and collect entertainment duty in respect of their cinema houses under the provision of West Pakistan Entertainments Duty Act, 1958 mainly on the ground that the areas in which their Cinema-houses are situated being Centrally Administered Areas under the Cantonments Act, 1924 are not included within the territorial limits of the Provincial Government and as such the legal authority to levy and recover taxes vests in the Cantonment Boards under the provisions of section 60 of the Cantonments Act, 1924. It may be mentioned at the outset that petitioners were threatened with recovery of the entertainment duty both by the Cantonment Boards concern ed and the machinery of the Provincial Government, and finding themselves placed in quandry, for being forced to pay the duty to two Governmental agencies simultaneously, they approached this Court for relief under these petitions under Article 98 of the Constitution of 1962 read with Clause 6 of the Provincial Constitution Order of 1969. It is relevant in this behalf to reproduce letter No. 8/I, C/5137 dated 20th October 1971 from Cantonment Executive Officer, Karachi Cantonment addressed to the Director of Excise and Taxation, Karachi. It reads as fallows:- (This letter and the others to be referred hereafter have been produced by the petitioners in Constitution Petition No. 429 of 1.971 and since file of this case was treated at the arguments as common to all the cases, we. would do likewise for the purpose of this judgment) "Your attention is invited to the legal opinion given by the Ministry of Law and circulated vide Government of Pakistan, Ministry of Defence letter No. 103/G/AD(C)/ML & C/70/2781/D-5, dated the 25th August 1970 (copy enclosed) wherein the Central Government has opined that, irrespective of the existing laws and rules, the Provincial Government cannot enact any Ordinance or levy any taxes on the centrally adminis tered areas. The jurisdiction of the Provincial Government with regard to any taxation on any business/property has therefore been, barred in the centrally administered areas. As such your department being an organ of the Provincial Government does not have any, jurisdiction to recover any tax/duty from the cinemas of Karachi Cantonment which is a centrally administered area. (2) You are therefore requested not to recover any tax, cess, rates, duty or charges or any other levy from the cinemas located within the limits of Karachi Cantonment." Copies of this letter were sent to the petitioners and also the Excise and Taxation Officer (Entertainment), Karachi with the remarks that "He will please stop, forthwith, recovery of tax, cess, rates, duty or charges or any other levy of any nature from cinemas located within the limits of Karachi Cantonment." The petitioners, on receipt of this communication, addressed letter dated 21-10-1971 to the Director of Excise and Taxation, Karachi pointing out their inability to defy the order of the Cantonment Authorities who had the exclusive authority to grant cinema-licences and collect Cinema tax etc. At this stage, it would be appropriate to elucidate by reproducing two letters the position of the Provincial Governments, as it was then projected,. regarding the powers of Cantonment Board in relation to cinema-houses in their Cantonment-limits. The first letter is the one addressed by the District Magistrate, Karachi under No. 38/x/3082 of 1969 dated 31st March 1969 to the petitioners. It reads as under:- "It has been decided by the Government that the inspection of cinema houses located in Cantonment Boards will be carried out by the Engineers of Cantonment Boards concerned under the command of the Army and the responsibility of issuing licences to these cinema houses will be of the President of Cantonment Boards concerned. Accordingly you are directed to obtain the Performance Licence from the Cantonment Authorities by 15th April 1969 and by this date the licences issued and renewed by the District Magistrate, Karachi should be deposited in this office positively." The second letter No. 10/3/G/AD(C)/ML & C/70/278/D-5 dated 25-8-1970 from the Government of Pakistan in the Ministry of D.-fence addressed to the Chief Secretaries of all the Provincial Governments reads as follows:- "Sir, Subject:-Jurisdiction of Province fn Cantonment Areas. - I am directed to say that the question of the Jurisdiction of the Provinces in Cantonment areas has been carefully considered in the light of the constitutional provision as contained in entries I(a) and 49 of the Third Schedule and Article 149 of the 1962 Constitution and also keeping in view the relevant constitutional development after the enforcement of the Government of India Act, 1915, and the legal provisions incorporat ed in Cantonments Act, 1864 onwards. It has been held that the powers of the Central Government in respect of a "Cantonment Area" not only includes its delimination, local self-Government in such areas, the constitution and functions and powers of local authorities for such areas but also matters germane to these subjects. These matters are those which reasonably or historically fall within the scope of locals self-Government or are essential for its substance. In short all these subjects on which provision exists in the Cantonments Act. 1924 or, matters brought within the jurisdiction of Municipal Committees under the Municipal Administration Ordinance, 1960, are the exclusive' concern of the Cantonment Boards and the Central Government,. without in any way curtailing the generality of these matters, it will" be of advantage to specify certain subjects in respect of which the Provinces have no jurisdiction in Cantonment areas. These matters are- (a) taxes on trades, professions and callings,. (b) taxes on lands and buildings, (c) control and regulation of cinema-houses and their licensing, (d) all other taxes which a Municipal Committee is competent to impose,. irrespective of the fact whether such tax has or has not been imposed,) under the Municipal Administration Ordinance, 1960, (e) cattle trespass, (f) all other matters which affect the interest of the Defence Services or local self-Government of Cantonments." Petitioners have produced copy of the directive issued by the Chief Secretary to the Government of Punjab to all the Divisional Commissioners and the District Magistrates under letter No. S.O.T. VIII-221/67 dated 28-12-1970 which is to the effect that the decision of the Central Government was to be strictly followed, and further that "The Provincial Government has no jurisdiction over cinema-houses in Cantonment Areas, and all powers regarding control, regulation, licensing of cinema-houses and also all -matters germane to all these subjects vest with the respective Cantonment Boards". It was in view of this background that petitioners felt themselves bound to obey the directive of the Cantonment Board contained in letter No. 8/ 1C/5137 dated 20-10-1971 referred to earlier. The Director of Excise and Taxation, Karachi, however, threatened under letter No. T-1/66/71-Entt/2387 dated 26-10-1971 that in case of non-payment, the entertainment duty will be recovered from petitioners by coercive measures. this letter reads as follows : "To The Proprietor (all falling within Cantonment Areas) (1) Capri Cinema (2) Nishat Cinema (3) Naz Cinema (4) Imperial Cinema (5) Gulzar Cinema (6) Drive-in Cinema, Karachi. Subject. Recovery of Entertainment Duty/Tax under the Provincial Entertainments Duty Act, 1958. The taxes levied by Provincial Government are recoverable in Canton ment Area as per law. The Entertainment Duty is being levied and recovered at the rate of 50 % of Admission Fee under section 3(l) of the West Pakistan Entertainments Duty Act, 1958 and the said Act extends to whole of West Pakistan (Now Sind) except the Special areas. In this case it will be appreciated that the Cantonment Area is not exempt from levy of Provincial taxes as "Special Area". (2) Further the communication of the Ministry of Defence referred to in the Cantonment Executive Officer letter No. 8/1. C/5137 dated 20-10-1971 seeks to have authority for Cantonment areas in respect of taxes which pertain to Local Government. It does not seek to debar provincial authority in matters which are provincial subjects such as law and order, Entertainment Duty etc. (3) You are therefore directed that the taxes i.e. Entertainment Duty and Welfare Cess levied by the Provincial Government may please be paid regularly otherwise the same-.will be recovered by coercive measures under the Land Revenue Code." By the time these petitions came up for regular heating, the position of -the Federal Government via-a-via the Provincial Governments regarding the recovery of entertainment duty has been settled and it may be stated by ,reproducing letter No. F 79/13-5/71 dated 13-11-1974 addressed by the Additional Secretary to the Government of Pakistan, in the Ministry of Defence, Rawalpindi to the Chief Secretaries of all the Provincial Governments. It reads: "Sir, Subject:-Recovery of entertainment duty by Provincial Governments from Cinema Houses in Cantonment Areas. I am directed to say that the question of recovery of entertainment duty by Provincial Governments from cinema-houses in Cantonment areas has been examined and it has been decided that the Provincial Govern ments may recover entertainment duty from cinema-houses in Canton ment areas with immediate effect. It may however be pointed out that certain owners of cinema-houses in cantonments had obtained stay orders from the respective High Courts. It is, therefore, necessary that the Provincial Governments should instruct their Advocate- Generals to submit applications for vacation of these orders. The Ministry of Defence and the Cantonment Boards on their part would extend every assistance in the matter. (2) I am further to say that the above agreement of the Ministry of Defence does not prejudice its rights to claim a share for the Canton ment Boards out of the receipts from entertainment duty when the over all issue of Provincial Tax Jurisdiction in Cantonment areas is sorted out. It may also be pointed out that the above agreement does not pertain to the grant of licences to cinema-houses in Cantonment areas by the Cantonment Boards and recovery of licence fee. This is in accordance with the provision of section 124 of the Cantonments Act, 1924, extract enclosed for convenience of reference." So far Cantonment Boards are concerned, the threat of recovery of ,entertainment duty in respect of petitioners' cinema-houses has disappeared in view of the latest decision of the Federal Government. Even otherwise, in view of admitted legal position the Cantonment Boards are presently not authorised to levy or recover the entertainment-duty under section 60 of the Cantonments Act, 1924. This provision of law reads as follows: Section

60. General power of taxation.-(1) The Boards may, with the previous sanction of the Central Government, impose in any Canton ment any tax which, under any enactment for the time being in force, may be imposed in any Municipality in. the Province wherein such Cantonment is situated. (2) Any tax imposed under this section shall take effect from the date of its notification in the official Gazette. Learned counsel appearing for the respective Cantonment Boards admitted at the Bar that the Central Government has at no time granted the requisite sanction under section 60 to the Cantonment Boards to impose the entertainment duty on Cinema-houses, and such duty cannot therefore bed levied in respect of the petitioners' Cinema-houses. Learned counsel for the petitioners did not controvert this position, and we have therefore no hesita tion in reaching the conclusion that the action of the Cantonment Boards in imposing or collecting entertainment duty from petitioners' house was without lawful authority. This, however, is not the end of the controversy. It was submitted by learned counsel for the petitioners that the Provincial Government, in any case, is divested of any authority in law to impose and collect entertainment duty for the reason that the Cinema-houses being located in Cantonment Areas are not within the limits of the Province and the Cantonment Boards have the exclusive power, with previous sanction from the Federal Government, to impose the entertainment duty. It is, however, unnecessary for us to decide in these cases whether Canton ment Boards, with the requisite previous sanction from the Federal Government, is competent to impose entertainment-duty for such a situation has not arisen. If this arises, the stand taken by learned Advocate-General is that so far as the Provincial Legislature is concerned, it cannot be divested of the legislative authority to impose and collect the entertainment-duty, even though in result the petitioners may be liable to payment of same duty to two different Agencies of the Government. In this behalf, learned Advocate-General relied upon a reported decision of the Bombay High Court in Cantonment Board Poona v. Western India Theatres Limited (A I R 1954 Bom. 261). The relevant passage of the judgment reads as under: "But instances are not, wanting in this country in which taxes are levied twice upon the same thing, once for the benefit of the Provincial Government and in the second instance for the benefit of the Local Self-Government bodies, for example, the District Local Board or the. Municipality. The two instances which occur to one at once are that of land revenue and local fund cess and the urban property tax levied in the City of Bombay for the purpose of Provincial Government and the house tax which is levied by the Municipality at Bombay for its own finances. When a similar question arose before the Judges of the Nagpur High Court in the case of 'Mulji Sicka & Co. v. District Council, Bhandara A I R 1945 Nag. 171, they found themselves unable to accept the contention that there was anything in the Constitution. which required them to hold that a tax was illegal on the ground that it involved double taxation in respect of the same subject-matter, and with respect we are in agreement with the view which had been expressed in that case." As already stated, we need not, however, embark upon this question in view of the well-settled principle as well as the rule laid down by the Supreme Court of Pakistan in Doaba Goods Forwarding Agency Ltd. v. Province of Punjab (1975 S C M R 527), that "the High Court's function under Article 98 of the Constitution of 1962 is not to pronounce upon the validity of laws or notifications. etc. as merely an academic exercise, but it is only where a person is aggrieved, that is to say, adversely affected by such a law that he may invoke the jurisdiction of the High Court and then the High Court would in a concrete: case deal with the legal position." The question that needs consideration, however, is whether the Provincial. Legislature is competent to impose entertainment-duty in respect of Cinema houses situated in Cantonment Areas within its territory. We may now reproduce the relevant provisions of the West Pakistan Entertainment Duty, Act, 1958. First of all it may be mentioned that the object of the Act, as reflected from its preamble, is "to consolidate the law relating to levy of a duty in respect of admission to entertainments in West Pakistan". The provisions of the Act, which came into force at once by virtue of subsec tion (2) of section 1, were extended to the whole of West Pakistan, except the Special Areas, and the Federal Capital. The incident of the levy imposed as "entertainment-duty" is contained in section 3 in these words: "Section

3. Duty on payment for admission to entertainment.-(1) There shall be levied and paid to the Government on all payments for admission to any entertainment, a duty (hereinafter referred to as the "entertainments duty") at the rate of fifty per cent of such payment, excluding the amount of the duty: Provided that where the proprietor of an entertainment admits any person to any place of entertainment without any payment or on payment of an amount less than the amount normally charged for admission thereto, the entertainments duty shall nevertheless be levied and paid on the amount which would have been normally charged for admission to that place." It is noteworthy to just mention at this stage that the incident of duty falls on "payment for admission to any entertainment. The expression "payment for admission" is defined in the Act as to Include- (i) any payment made by a person who having been admitted to one part of a place of entertainment, is subsequently admitted to another part thereof for admission to which a payment involving duty or additional duty is required ; (ii) any payment for seats or other accommodation in a place of enter tainment ; (iii) any payment for any purpose whatsoever connected with an entertain ment which a person is required to make as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment." The expression "admission to an entertainment" has also been defined as ,to include admission to any place in which the entertainment is held". The method of levy of the duty and penalty for non-compliance has been ;prescribed in sections 5 and 6 in these words :- "5.-(1) Save as otherwise provided by this Act, no person shall be admitted on payment to any entertainment where the payment is subject to entertainments duty except- (i) with a ticket stamped with an impressed, embossed, engraved or adhensive stamp (not before used) issued by the Government for the purposes of revenue and denoting that proper entertainments duty has been paid ; or (ii) with a ticket sealed or printed in the manner prescribed by rules framed by the Government. (2) The Government may, on the application of the proprietor of any entertainment in respect of which the entertainments duty is payable under section 3, permit the proprietor on such conditions as the Government may prescribe to pay the amount of the duty due- (a) by a consolidated payment ; or (b) in accordance with returns of the payments for admission to the entertainment and on account of the duty ; or (c) in accordance with the results recorded by any mechanical contrivance that automatically registers the number of persons admitted. (3) The provisions of subsection (1) shall not apply to any entertainment in respect of which the duty is payable in accordance with the provi sions of subsection (2). Section

6. Penalty for non-compliance with sections 4 and S.-If any, person is admitted to any place of entertainment and the provisions, of section 4 or section 5, as the case may be, are not complied with, or the payment of entertainments duty is otherwise evaded, or in the case of any cinema, the entertainments duty is not paid in accordance with the provisions of section 6-A, the Collector shall, in addition to, the recovery of the entertainments duty evaded underpaid or not paid, impose on the proprietor of the entertainment, a penalty not exceeding a sum of five hundred rupees, or a sum not greater than five times the entertainments duty the payment of which was evaded, underpaid or not paid, whichever is greater: Provided that no such penalty shall be imposed unless the person on whom it is to be imposed or his duly authorised agent is given an opportunity of being heard by the Collector, or by an Officer authorised by him in this behalf. It has already been noticed that the incident of entertainment-duty is in respect of the payment for admission to an entertainment, and not on the proprietor of the entertainment, who is, however made liable to the recovery of entertainment duty in respect of the payment of entertainment to which the person concerned is admitted. In other words, the incident of duty imposed by the Act being on the payment for admission to entertainment, therefore, falls on the person admitted to entertainment which is subject to entertainment duty. The West Pakistan Entertainment of Duty Act, 1958 was passed by the Provincial Legislature on 23-4-1958. So far as its competency regarding the field of legislative powers is concerned, there can be hardly any doubt as it surely fell under Entry No. 88 of the Provincial List, "tax on luxuries includ ing taxes on entertainments, amusements . . . . : ' It is, therefore, clear that by its very nature, on the well established principle of "pith and subsistance", the Provincial Legislature was fully competent to make laws in respect of duties on entertainment. This position so far as power of law-making by the Provincial Legislature is concerned remains intact upto this day. Doubts were not even cast at the hearing before us as to the competency of law-making power of the Provincial Legislature. The contention raised by learned counsel for petitioners is that levy of an entertainment duty in respect of cinema-houses situated in Canton ment Area being the exclusive function of Cantonment Boards by virtue of section 60 of the Cantonment Act, 1924 the law-making power of the Provincial Legislature is excluded for the reasons that the field of Legislation is occupied by the Central Legislature. Since this argument has reference to law-making powers of Central Legislature in respect of Cantonments and the powers of the Cantonment Boards, we may usefully refer to the observations of their Lordships of the Supreme Court in Pakistan v. Province of Punjab (P L D 1975 S C 37), to which extensive references were made by the learned counsel on either side. In that case their Lordships were dealing with an argument advanced on behalf of the Central Government that the lands in Cantonment limits are immune from the incident of tax payable under the West Pakistan Urban Immovable Property Tax Act, 1958. So far as the status of Cantonment Board is concerned their Lordships have held as follows:- "Section 60 gives the Cantonment Board the power to impose in any Cantonment any tax which, under any enactment !or the time being in force, may be imposed in any Municipality in the Province wherein such Cantonment is situated, with previous sanction of the Central Government." And further that: "there is no material difference, therefore between the Cantonment Board and other Municipal Authorities, but lands and buildings vested in the Municipal Authorities do not vest in the Provincial Government " So far as the lands in Cantonments area concerned, their Lordships held that: "the mere fact that a property is situated in the Cantonment area does not, however, make it a property of the Central Government because there may well be other kinds of properties vested in the Board which is not a property vested in the Central Government." After analysis of the various provisions of the Cantonment Act, 1924 and the West Pakistan Urban Immovable Property Tax Act, 1968, their Lordships then observed as follows: "The question that has to be considered next is as to the validity of the tax itself. Now, the tax sought to be levied by the Urban Immovable Property ,Tax Act is a tax on the annual value of buildings and lands in a rating area specified by the Government by a notification. Taxes on lands and buildings come within item 75 of the Fifth Schedule to the Constitution of 1956, and with regard to these, the Provincial Legislatures had by reason of the provisions of clause (3) of Article 106 of the said Constitution exclusive power to make laws for the province or any part thereof. The taxation was accordingly validly imposed by a competent Legislature in the proper exercise of its powers. `h he only question was whether a Cantonment area formed under Article 106 of the Constitution a part of the province which made the law. '1f it did, then the law was applicable there but on the other hand, if a Cantonment area is an is land within a province in respect of which the Provincial Legislatures cannot at all legislate or is an area which is specifically exempted from the operation of such legislation by anything in the Constitution, then the law will have no application at all.". According to the Interim Constitution of 1972 and the permanent Constitution of 1973, the legislative field covers only Local Self-Govern ment in such area; the Constitution and powers within such areas of Cantonment authorities, the regulation of housing accommodation in such areas and the delimitation of such areas. Under the 1956 Consti tution also, the Federal Legislature had power to legislate with regard to "delimitation of Cantonment areas; local self-Government in Cantonment areas: constitution, powers and functions, within such areas of Cantonment authorities; control of house accommodation (including control of rents) in such areas." Under the 1935 Act, the power given to the Federal Legislature was to legislate for "Local self-Government in Cantonment areas, the constitution and powers within such areas of Cantonment authorities, the regulation of house accommodation in such areas, and the delimitation of such areas." In the 1962 Constitution, however, the powers are a little wider. It reads . as follows:- "(e) Cantonment areas, including- (i) the delimitation of such areas ; (ii) local self Government in such areas and the functions and powers of such authorities ; and (iii) the control of housing accommodation (including control of rents) in such areas." Nevertheless, if we read the legislative lists in the manner that they should be read, namely, that if there is a specific provision for a special subject in a particular item of a particular list, then that subject falls within that item of the said list and not under any general item. Since taxa tion on lands and buildings is specifically mentioned in the Provincial Legislative List as a separate item of legislation, legislation in respect of taxes on lands and buildings comes within the competence of the Provincial Legislature and the laws so made would apply in any part of the Province making the law, unless the area sought to be excluded has been specifically exempted under the law or under any constitutional provision. I have not been able to discover anything in any Constitu tion or any law to show that a Cantonment area is not to be included within the territorial limits of a Province in which it is situated. In the circumstances, I have come to the conclusion that the claim of the Central Government that all lands and buildings included in the cantonment area are exempt from payment of the Urban Immovable Property Tax imposed by the Provincial Legislatures of the Provinces of Pakistan is not tenable." Since tax on entertainment, as noticed earlier, is a separate field of law making specifically reserved for the Provincial Legislature the competence of the Provincial Legislature and the law so made would apply to all parts of the Province, unless the area sought to be excluded has been specifically exempted under the law or under any Constitutional provision. It has already been held by their Lordships of the Supreme Court that a Cantonment Area falls within the territorial limits of a Province in which it is situated. In the circumstances, the competence of the Provincial Legislature to make laws on the subject of entertainments, even if the entertainments are held at a place within Cantonment limits is not op.-n to any exception. We have, however, already observed that the incident of duty under the provisions of West Pakistan Entertainment Duty Act, 1958 falls on the payment for admission to an entertainment and is recovered from the Proprietor of the entertainment personally, only as a penalty, and not other wise. In the circumstances that by its very nature the duty is payable by the person admitted to entertainment, the owner of the Cinema-house is not liable to the incident of tax and he cannot, therefore, be said to be an aggrieved person within the meaning of Article 98 of the Constitution of 1962 or Article 199 of the present Constitution. On this view of the case alone these petitions must fail. For all these reasons, we find no substance in these petitions. These are, therefore, dismissed, but we leave the parties to bear their own costs. Learned counsel appearing for the respective Cantonment Boards sub mitted that petitioners will still be liable to payment of Cinema-tax at the rate of Rs. 10 per show which has been levied by virtue of Notification No. 1024/56 dated 2nd November 1956. Since there is no controversy in this regard, we need not make further observations. S. A. H. Petitions dismissed.