1992 PLP 122 (MLD)

This judgment shall dispose of Writ Petitions Nos. 5605, 5929, 6057, 6605 and 6859 of 1991 in which similar questions fall for determination.

2. The petitioners in all these petitions except Writ Petition No.6859 of 1991 are manufacturing tyres and tubes which are being exported out of Sheikhupura District. The petitioner in Writ Petition No.6859 of 1991 however manufactures essence oils, crown erok, capsels and Carbon Di‑oxide Gas. The goods being manufactured by all the petitioners are liable to payment of export tax to the Zila Council, Sheikhupura respondent No.2. Previously the tax was being charged by Zila Council on the basis of the weight of the consignment but by virtue of the schedule enforced by it for the year 1991‑92, the petitioners have been asked to pay tax on per item basis rather than the weight of the consignment. This demand of the respondents has been challenged by the petitioners by filing these Constitutional petitions.

3. The learned counsel for the petitioners have contended that the levy of export tax on the basis of number and not weight of the goods is contrary to rule 6(6) of the Punjab Zila Council (Export Tax) Rules, 1990. It was further emphasised that the Government of Punjab vide its Memorandum No.SOV (LG) 5‑26/89, dated 21st of April, 1991 had decided that with a view to ensure Zila Council, Model Tax Schedule prepared by the Government be enforced by the Zila Council by completion of all formalities and that according to the said schedule the tax was chargeable on the basis of the weight and not number of the goods.

4. The learned counsel for the respondents Nos. 2 and 3 have however, defended the impugned action of respondents No.2 and 3 and had termed it to be unexceptionable. Reliance was placed by them on Rule 6(1) of the Punjab Zila Council Taxation Rules, 1991 to contend that the Zila Council was authorised by law to levy the tax on the basis of the schedule announced by it which provides for the payment of tax on the numbers of the goods. It was pointed out that with regard to many items the model tax schedule itself provides for charge on this basis. The learned counsel maintained that the model tax schedule prepared by the Government was meant for the, guidance of the Zila Council and did not have any binding effect.

5. According to section 137 of the Punjab Local Government Ordinance, 1979, a Local Council subject to the provision of any other law, may and if I directed by the Government shall levy all or any of the taxes enumerated in the Second Sched which inter alia includes imposition of export tax on goods. Section 138 provides that all taxes levied by the Zila Council are to be notified in the official Gazette and in the absence of any direction by the Government are subject to previous publication. Section 144 ordains that all taxes and other charges levied by a Local Council shall be imposed, assessed, leased, compounded, administered and regulated in such manner as may be prescribed by rules. In the exercise of power conferred by this section read with section 167 of the Punjab Local Government Ordinance, 1979, the Government of Punjab has promulgated Punjab Zila Council Export Tax Rules, 1990, rule 6 whereof reads thus: ‑‑ "

6. Assectment and collection of the tax.‑‑‑(1) The tax shall be assessed in accordance with the rates specified in the Export Tax Schedule. (2) Where a consignment consists of two or more classes of goods chargeable at different rates, each portion of the consignment shall be treated as a separate consignment. (3) The Clerk shall assess the tax payable on goods presented at the Tax Post and on receiving the amount issue a receipt in respect thereof in Form 3. (4) The receipt shall be prepared by the carbon process in duplicate and the original copy thereof shall be handed over to the exporter. (5) The total amount brought forward and the progressive total carried forward shall be shown on the duplicate copy of the receipt. (6) Export Tax shall be calculated on the gross weight of the consignment including packing and other containers. (7) If there is any dispute about the assessment or the liability of any goods to export tax, it shall be paid according to the demand of the Clerk, but the aggrieved person may appeal to the Taxation Officer within a period of 10 days from the date on which the disputed taxis paid."

6. There is merit in the contention of the learned counsel for the petitioner that in view of clear mandate of 'sub‑rule (6) of the aforesaid rule, the tax can only be levied on the weight of the consignment. This sub‑rule clearly requires the authorities to charge export tax on the basis of weight and not number. Consequently while recovering the tax the weight of the goods cannot be ignored. There is no warrant for working the tax on the basis of number of goods being exported rather than the weight thereof.

7. Reliance of the learned counsel for the respondents on sub‑rule (1) is of no avail. This sub‑rule merely prescribes that the tax shall be assessed in accordance with the rate specified in the aforesaid schedule. It cannot, however, be contended that the schedule need not conform to the other requirements of the rules. Power to levy tax at the rate specified in the schedule is not disputed but the objection is with respect to method of calculation i.e. whether it should be on the basis of weight of the consignment or the number of the goods contained therein. The learned counsel for the petitioner pointed out that in all the Zila Councils except Sheikhupura the tax is being calculated on the weight of the goods in question. Although the learned counsel for the respondents denied this fact but nothing has been placed on record to rebut this assertion in support of which the learned counsel for the petitioner had placed on record the notification issued by other Zila Councils like Rawalpindi. As a result of what has been stated above all these petitions are allowed and it is declared that the respondents have no lawful authority to recover or receive export tax from the petitioners on the goods being exported by them on the basis of the number but not the weight of the consignment. There shall be no order as to costs. AA./M‑34/L??????????????????????????????????????????????????????????????????????????????????????? Petitions allowed.