P L D 2003 Lahore 730 (PLP)

MIAN SAQIB NISAR, J.--Writ Petitions Nos. 7559 of 2000, 7560 of 2000, 18615 of 2001 and 18643 of 2001, are being disposed of together, as common questions of law and facts are involved in all these matters.

2. Briefly stated the facts of the cases are that, the petitioners had purchased their respective properties situated in Defence Housing Society, Lahore and had applied to the Cantonment Board for the transfer of the same in their names; the concerned officer of the Board has refused to give effect to the transfers in the Board record; until and unless the petitioners had paid 3% tax on the immovable properties as levied through Notification No.382(1)94 dated 14-5-1994 of the Board. The petitioners have challenged the Vires of the above Notification and the refusal of the Board, mainly on the ground that, under section 60 of the Cantonments Act, 1924, the Board though with the previous sanction of the Central Government, has the power to impose any tax in any cantonment, but such tax could only be imposed, if it is leviable in the municipality in the Province, where such cantonment is situate. It is stated that under section 137 of the Local Government Ordinance, 1979, the Local Council could levy taxes, which were enumerated in the Second Schedule of the Ordinance and previously the tax on immovable property was permissible as per Item No.5 of the said Schedule. But, vide amending Ordinance No.XLIX of 1999, coming into force on 28-9-1999, Item No.5 has been omitted, therefore, as the Local, Councils, on account of the above amendment, was left with no power to impose the tax on immovable property, resultantly, the Cantonment Board on the basis of the impugned notification could not demand the said tax. It is also submitted that the impugned Notification and the demand of the Board to claim the tax is violative of the provisions of Article 25 of the Constitution, because the municipality in which, the Cantonment Board, Lahore is situate, has dispensed with the levy of tax on immovable property with effect from the amending Ordinance dated 28-9-1999, therefore It would be sheer discriminatory to impose tax on the transfers of the properties situate in the jurisdiction of Cantonment Board of the same Municipality, resultantly, said Notification is liable to be struck down.

3. We have heard the learned counsel for the parties. Section 60 of the Cantonments Act, 1924 reads as follows:-- "General power of taxation.

(1) The Board may, with the previous sanction of the [Central Government] impose in any cantonment 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]." From the above provision, it is clear that the powers of the Board to impose taxes is circumscribed by reference to another law, meaning thereby that only such taxes can be imposed by the Board, which are legally permissible in the municipality in the Province, where such Cantonment Board is situate. The intention of the Legislature and the rationale behind the above is vivid and is based upon the rule of equality; the Municipality and Board areas have been considered and brought at par for the purposes of the imposition of the local taxes. Therefore, as through the amending Ordinance No.XLIX of 1999, Item No.5 of the Second Schedule to the Ordinance, has been omitted leaving no power with the Municipality, under the Ordinance, 1979, to impose the tax on the immovable property, resultantly, under section 60 of the Act 1924, which envisages the imposition of only those taxes, which can be imposed in a Municipality and the said section is governed by the principles of legislation by reference, therefore, the moment, the referred legislation was amended omitting the imposition of the tax on immovable property in the Municipality, the power of the Board to impose and claim the omitted taxes diminished, and the Notification No.382(1) 94 dated 14-5-1994, automatically lost its legal effect, thus, the Board has no jurisdiction to claim the tax on immovable property at the time of giving effect of transfer in favour of the petitioners, which are after the' amending Ordinance XLIX of 1999.

4. However, having determined the legal questions on the factual premise, we find that in the cases of W.P. No.7559 of 2000, and W.P. No. 18615 of 2001, the transfers in favour of the petitioners are dates 22-12-1999 and 25-5-2001, which are after the enforcement of the amending Ordinance, therefore, the cantonment board in these two cases, could not demand the impugned tax. But, in W.P. No.7560 of 2000, and W.P. No.18643 of 2001, the sales are prior to the amendment of the Second Schedule, thus qua these two transactions, the board is well within its jurisdiction to claim the relevant tax. Consequently, to the extent of W.P. No.7559 of 2000 and W.P. No. 18615 of 2001, the demand of the Board is declared as illegal and unlawful. Whereas, with regard to the other two petitions, the Board is justified to claim the tax, which petitions are hereby dismissed.

5. As regards the argument of the learned counsel for the petitioners that the impugned notification violates Article 25 of the Constitution, suffice it to say that, before the amending Ordinance, as the tax on immovable property was leviable in the Municipality of Lahore, where the respondent Board is situate, thus, the case of the petitioners is at par with the transferees of the immovable properties of the municipality. The plea therefore, has no force. In the light of above, W.P. No.7559 of 1999 and W.P. No. 18615 of 2001 are allowed, declaring the demand of tax by the Board as without jurisdiction and lawful authority. But for the other two writ petitions, the Board is justified to claim the tax, therefore, these two writ petitions are accordingly dismissed. S.A.K./N-321/L Order accordingly.