2017 PLP 217 (CLCN)

AZIZ-UR-REHMAN, J.

By means of this Constitutional Petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 filed on 01.06.2004, the Petitioner viz. 'The Karachi Stock Exchange [Guarantee] Limited' [In short KSE] has sought the following reliefs:- "a) Declare that the First Demand Notice, the Second Demand Notice and the Warrant Notice are illegal and devoid of force/effect. b) Declare that the Respondents may only levy water charges upon the Petitioner to the extent that water is actually provided to the Petitioner. c) Declare that the amount recovered to date by the Respondents from the Petitioner on account of purported water charges, conservancy tax and fire tax have been recovered without lawful authority. d) Permanently restrain the Respondents and any person acting through or under them or on their behalf from taking any coercive or prejudicial action against the Petitioner on the basis of the First Demand Notice, the Second Demand Notice and/or the Warrant Notice, including disconnecting or otherwise impairing the sewerage system in place at the subject premises. e) Permanently restrain the Respondents from demanding further water charges until such time as water is actually supplied to the Petitioner. f) Grant the Petitioner the costs incurred in the petition. g) Grant the Petitioner any other relief that this Hon'ble Court may deem fit and proper in the circumstances of the case."

2. Briefly the relevant facts in the background are as follows:-

3. The Petitioner is a company limited by guarantee and duly incorporated under the Companies Act, 1913 and has also been licensed to carry on its' business of Stock Exchange by the Securities and Exchange Commission of Pakistan under the Securities and Exchange Ordinance, 1969 while, the Respondent No.1 is an autonomous body duly established under the Karachi Water and Sewerage Board Act, 1996 [Act X of 1996]. Respondent No.2, is an officer/functionary of Respondent No.1. Per averments made in the Memo of Petition [In short MoP] the premises of the Petitioner's Company i.e. the Karachi Stock Exchange [Guarantee] Limited, is being used for carrying out the function of stock exchange since, the creation of Pakistan. According to the Petitioner's version, all the bills sent to and received by the Petitioner till the filing of the instant Constitution Petition for and on account of 'water' and 'sewerage' charges etc. have been regularly paid by the Petitioner in full and that too despite the fact that for 'several years', the Respondents have failed and/or avoided to supply any water to the Petitioner premises.

4. Abruptly, on 10.2.2000, the Petitioner, received a letter No.DDT/A/ dated 8.2.2000 [Annexure 'A' to the MoP] from the office of the Deputy Director Taxes Division 'A', KW&SB Karachi, which was strangely marked as 'Reminder' of an earlier letter allegedly having been sent to the Petitioner vis-a-vis submission of certain documents in respect of and pertaining to the 'Petitioner's premises'. Nevertheless, the Petitioner on 11.02.2000 [Annexure 'B' to the MoP], promptly responded the aforesaid letter of 08.02.2000 wherein, the Petitioner, inter alia, informed the 'concerned office' of Respondent No.1 that its' so-called prior letter referred to by the Respondent No.1, had never been received by the Petitioner. The Petitioner along with its' letter of reply also enclosed a 'paid copy of the last bill'. The Petitioner in response of its' letter dated 11.02.2000 received another letter dated 19.02.2000 [Annexure 'C' to the MoP] from Respondent No.2 enclosing therewith a Revised and Amended bill of Respondent No.1 purportedly covering the so-called 'arrears' for 'water', 'conservancy' and 'fire charges' in the sum of Rs.4,930,167/-. [Forty Nine Lacs Thirty Thousand One Hundred Sixty Seven only].

5. The Petitioner, through its' letter dated 28.02.2000 [Annexure 'D' to the MoP], however, seriously disputed/contested the alleged 'claim of arrears' and consequently, asked the Respondent No.1 for an 'amended bill' confined only to the extent of 'current dues'. The Petitioner, accordingly, in response thereof, received a bill only for 'current dues'. Upon receipt of the 'amended bill', the same was promptly deposited by the Petitioner, of course, in full, however, despite the fact that water was never provided. The Respondent No.2, thereafter, vide its' letter of 20.11.2002 bearing Reference No.DDTSAD/554/2002, 'called upon' the Petitioner to provide copies of the 'P.T.1' and the last KW&SB's 'payment challan' in respect of the Petitioner' premises. The Petitioner, accordingly, addressed a letter No.Gen-7012 dated 25.11.2002 [Annexure 'F' to the MoP] to the Respondent No.2 whereby, photocopies of the 'requisite documents' as 'elicited were again sent/enclosed'. The Respondent No.2, merely, by a comprehendible letter No.DDT/ST/783/2003 of 22.09.2003, again 'called upon' the Petitioner to provide complete update challan along with P.T.1. The Respondents, asking so, however, ignored that all the relevant information previously elicited had in fact was already provided by the Petitioner vide its' letter No.Gen-7012 dated November 25, 2002 [Annexure 'F' to the MoP]. The Petitioner nevertheless again responded promptly vide its' letter No.KSE/Gen-6825 dated 26.09.2003 and also enclosed therewith copies of the 'paid challan' for Urban Immovable Property Tax for the years 2001-2002, 2002-2003 and 2003-2004. [Annexure 'H' to the MoP].

6. The Respondent No.2. thereafter, in its' own wisdom however, sent a 'demand notice' dated 22.03.2004 [First Demand Notice] in respect of the so-called rebated bill pertaining to alleged arrears with a threat for unspecified 'coercive measures' if, the bill so demanded was not paid by 06.04.2004. It is significant to note, that the said 'First Demand Notice' dated 22nd March, 2004 [Annexure 'I' to the MoP] did not specify any provision of law under which any such notice for the alleged arrears could be issued, coercive measures as threatened and/or taken justified. Besides, it did not disclose any basis on which the 'alleged arrears' were calculated and/or therefor any exact period otherwise specified. Moreover, no any opportunity of hearing as required under the law was given to the Petitioner vis-a-vis to 'show cause' as to why the 'purported arrears' were not recoverable from the Petitioner as per 'First Demand Notice' of 22th March, 2004. Nevertheless, the Petitioner, under such scenario wrote a letter Ref. No.KSE/Gen-2974 dated 14.04.2004 [Annexure 'J' to the MoP] to the Respondent No.2 regarding the 'First Demand Notice', whereby, the Respondent No.2 was informed in clear words that the Petitioner has already made full payment of all the bills regularly sent to and received from Respondents in respect of the charges up to the period of 2003-2004. The petition along with its' letter of 14.04.2004 while, enclosing copies of the already duly paid bills also asked for the withdrawal of the Demand Notice in respect of the so-called arrears. The Respondent No.2, thereafter, vide its' letter dated 04.05.2004, bearing Reference No.DDT/SAD/T/209/2004 i.e. 'Second Demand Notice' [Annexure 'K' to the MoP] in its' own wisdom offered a clarification for the alleged 'arrears' having been claimed in terms of the so-called 'Statements of Outstanding' Dues and Payment.

7. The Respondent No.2 instead of showing rationale/justification for the alleged claim of arrears in the sum of Rs. 37,77,708/- with a rebate of Rs.9,44,427/- [Net alleged arrears payable comes to Rs.28,33,283/-] as per 'bills' sent to the Petitioner under the 'First Demand Notice' surprisingly under the bill enclosed along with '2nd Demand notice' of 19th May, 2004 [Annexure 'L' to the MoP], even a greater amount of arrears in the sum of Rs.4,068,391/-, was mentioned which demand indeed, reflects the falsity and bogus nature of the 'so-called' arrears. Likewise, the 'Second Demand Notice', also did not specify any provision of law under which the demand for arrears could be made. Besides, once again, the Petitioner was not provided any opportunity for 'showing cause' against the levy sought to be imposed by means of and through the aforesaid 'demand notices'. Such 'alleged arrears' beside self-conflicting, inconsistent were never demanded and/or shown in the bills having been regularly sent to and paid by the Petitioner. The Petitioner, it is important to note, has never defaulted in respect of any bill sent to and received by the Petitioner. And this factum of the regular payment has never been denied by the Respondents. In perpetuation of the 'Second Demand Notice', the Respondents issued a three (3) days' 'Warrant Notice' dated 19.05.2004 [Annexure 'L' to the MoP] where under a coercive penal action against the Petitioner, for recovery of the 'alleged amount' of 'arrears' was threatened within 3 days from date of receipt thereof . It is significant to note, that even the three (3) days' Warrant Notice' did not 'specify' any 'provision of law' enabling thereby the issuance of such 'Demand Notices'/'Warrant Notice', and/or the initiation of coercive action for the so-called arrears w.e.f. 1972 to 2004.

8. Under the aforesaid circumstance, the Petitioner while, apprehending such 'coercive action' as threatened in terms of the 'First Demand Notice', the 'Second Demand Notice' and/or the 'Warrant Notice', and to avoid disruption of the workings of the Karachi Stock Exchange and causing thereby, irreparable losses to the Petitioner, as well as to the public at large, the Petitioner, has thus approached this Court through the instant Constitution Petition under Article 199 of theislamic Republic of Pakistan, 1973 'inter alia' for permanently restraining the Respondents from taking any 'coercive' and/or 'prejudicial action' against the Petitioner pursuant to the 'First Demand Notice' [Annexure 'I' to the MoP], the 'Second Demand Notice' [Annexure 'K' to the MoP] and/or the 'Warrant Notice' [Annexure 'L' to the MoP] which impugned 'Demand Notices'/' warrant notice' as per the Petitioner's version, are liable to be declared as being devoid of any legal effect and enforceability. The alleged arrears are not only without any foundation but also without supply of any water. The Respondent No.1, per version of the Petitioner, is also liable to refund the money wrongly received by the Respondents from the Petitioner. The Petitioner, as averred, has no other 'alternate' and/or 'efficacious' remedy for redressal of its' grievance as such this petition under Article 199 of the Constitution of Islamic Republic of Pakistan 1973 has been filed for redressal of its' grievance against the alleged claim of arrears.

9. On 04.06.2004, when the above petition came-up before the Court then the Court while, issuing notice to the Respondents, in the meantime the respondents were restrained from taking any 'coercive action' in terms of impugned notices/warrant notice. For ready reference order dated 04.06.2004 is reproduced herein below:- "

1. Granted.

2. Deferred.

3. Granted subject to all just exceptions.

4. Notice.

5. By this application the Petitioner seeks injunction restraining the Respondents from taking coercive action in terms of demand notice dated 22.03.2004, demand notice dated 04.05.2004 and warrant notice dated 19.05.2004. Notice to Respondents. In the meantime, Respondents are restrainedfrom taking any coercive action." [Underlining is ours]

10. Upon Service, one Zulfiqar Ali son of Mir Hassan Brohi, Deputy Director Tax [Saddar Town], filed 'counter affidavit' on behalf of the Respondent No.1, wherein, the contents of the MoP and/or injunction application under Order XXXIX, Rules 1 and 2, read with section 151, C.P.C. and Article [4-A] of the Constitution of the Islamic Republic of Pakistan 1973 bearing C.M.A. No.2684 of 2004, however, were not denied and/or controverted by the Respondents specifically. In the 'counter affidavit' so filed, nevertheless, it was asserted that an amount of Rs.4,930,167/- is outstanding against the Petitioner on account of 'water', 'sewerage', 'conservancy charges' and 'fire tax'.

11. The Petitioner, in response thereto, nevertheless, filed a detailed and comprehensive 'affidavit-in-Rejoinder' wherein, the amount of arrears, as claimed by the Respondents was specifically denied/ controverted inter alia as being false, frivolous and without any foundation. Subsequently, vide order dated 22.03.2007, the concerned officer of Respondent No.1 who was then present in Court was directed to file 'Demand notices' in order to ascertain the discrepancies viz-a-viz the arrears w.e.f. 1972 upto 2004. This order was passed with a view to ascertain as to whether any demand for arrears in any of the bills already sent to and fully paid by the Petitioner was made and if yes, whether the Petitioner was/is actually in arrears. Order dated 22.03.2007 being relevant reads as follows:- "Learned counsel for the Petitioner has pointed out certain discrepancies in the demand of arrears w.e.f 1972 Mr. Manzoor Ahmed along with officer concerned present in Court are directed to file Demand Notices in order to ascertain whether any demand was made and the Petitioner is in arrear thereof, with advance copy to the learned counsel for the Petitioner, written seven days. Petitioner to pay the current dues. Subject to claim of adjustment or refund, if any. Adjourned" [Underlining is ours].

12. Despite of such direction, nevertheless, the Respondents, failed and/or avoided to comply with the aforesaid order or otherwise, satisfy this Court about the 'alleged arrears' claimed by the respondent No. 1 w.e.f. 30.06.1972 up to 16.03.2004. Needless to say, the Petitioner admittedly is paying KW&SB's bills regularly and punctually. Again, on 26.10.2007 when the above petition came-up before the Court, then the following order was passed:- "On 22-03-2007 in presence of the officer concerned it was directed that the demand notices should be filed in order to examine whether any demand was made and the petitioner is in arrear thereof. Since then no documents have been filed to justify the claim, today also learned counsel for KW&SB submits that he has already requested in writing but the officer concerned has not communicated the required information. Under the circumstances, we would admit this petition for regular hearing. To be fixed within six months. [Underlining is ours] Ad interim orders passed on 22/3/2007 are accordingly confirmed."

13. Lastly, on 08.12.2015, when the above Constitution Petition came-up before us for Regular hearing then, we heard Mr. Yousuf Ali Sayeed, learned counsel for the Petitioner and Mr. Abrar Hassan, learned counsel for the Respondents and also gone with their assistance through the available record before us minutely.

14. Mr. Yousuf Ali Sayeed, learned counsel for the Petitioner vehemently argued that the issuance of 'First Demand Notice', 'Second Demand Notice' and 'Warrant Notice' [Annexures 'I', K and 'L' to the MoP respectively] is in flagrant disregard of the fundamental principle of 'natural justice' as enshrined in the maxim 'audi alteram partem' because of and obviously for the reason that the Petitioner herein, was not given any fair opportunity of being heard and/or to 'show any cause' as to why the 'alleged arrears' as claimed by the Respondent No.1, are not recoverable in terms of the aforesaid 'Demand Notices'/'Warrant Notice' all issued to the Petitioner in the year 2004 i.e. after 32 years. Mr. Yousuf Ali Sayeed further contended that the First 'Demand Notice', the Second 'Demand Notice' and the 'Warrant Notice' are not only patently illegal/defective/vague but also do not refer to any specific provision of law under which the same could be rightly issued and/or the alleged arrears otherwise, could be justified. Moreover, it is also not clear from the aforesaid 'Warrant Notice' as to how and under what 'Provision of law' the coercive action/measures, as threatened thereunder, can be initiated/taken. According to Mr. Yousuf Ali Sayeed, under section 7[ii] of the Karachi Water and Sewerage Board Act, 1996 Act X of 1996], the Respondents, are only within its' right to levy, collect or recover rates, charges of fees for water supply and sewerage services including arrears thereof but in no event, the Respondent No.1, is empowered to levy local taxes. Per learned counsel, much-less in view of the well settled distinction, inter se, a 'tax' and a 'fee'. Besides, per learned counsel for the Petitioner the levy of charges is linked with the supply of water. The Respondents in the case in hand, cannot levy any charges or fee on account of water, as no water was practically supplied at the 'subject premises' belonging to the Petitioner.

15. Per Mr. Yousuf Ali Sayeed, learned counsel for the Petitioner, the First 'Demand Notice', the Second 'Demand Notice' and the 'Warrant Notice' are not only at variance ' inter se' but besides, suffering from inconsistencies, also demonstrate the un-tenability and falsity of Respondents' claims of arrears. The Petitioner, evidently has already made full payment of all the bills received from the Respondent No.1 straight away from years 1972 to 2004. In view of up-to-date payment of all the bills no any arrears as alleged by the Respondent No.1 are payable. No any demand, it is significant to note, was previously made or any arrears, otherwise, were shown in any of the bills sent to and received by the Petitioner. The claim of Rs.49,30,167/- w.e.f. 1972 to 2004, only in the year, 2004 besides, being after thought does not seem justified under the facts and circumstances of the case. In any event the Respondent No.1 has no power and/or authority to demand the alleged amount of arrears in the sum of Rs. 40,68,391/- [See Annexure 'K' to the MoP] after 30/32 years. The Respondents, in no event, can compel the Petitioner to pay the same under the show and threat of 'coercive action' on the part of Respondents. The demands made by the Respondents in terms of the 'First Demand Notice', the 'Second Demand Notice' and the 'Warrant Notice' vis-a-vis the alleged arrears are not only baseless but also seem after thought as the demanded amount of alleged arrears was never shown and/or otherwise, ever demanded in any of the bills sent to and received by the Petitioner for the last 32 years. Moreover, the alleged claim of so-called arrears, per learned counsel for the Petitioner is not based on law and/or notification issued under Karachi Water and Sewerage Board Act, 1996 [Act X of 1996].

16. Mr. Yousuf Ali Sayeed, next contended in vehemence that the threatened actions by the Respondents regarding the 'so-called arrears' w.e.f. from 1972 upto 30 June, 2004 in the sum of Rs.40,68,396/- are not only mala fide but also illegal and prejudicial to the Petitioner's lawful business. Mr. Yousuf Ali Sayeed while, concluding his arguments emphatically prayed for the grant of the instant Petition as prayed otherwise, the Petitioner shall be seriously prejudiced. In support of his contentions, Mr. Yousuf Ali Sayeed, learned counsel for the Petitioner also placed reliance on the case of Nizar Ali v. Karachi Water and Sewerage Board and another [2004 CLC 578], wherein the Division Bench of this Court regarding levy of Tax and collecting of charges, observed as follows:-

9. We have carefully considered the respective contentions of learned counsel from both sides. Though prima facie the terms of the schedule do appear to support Mr. Karim Khan's contention, we cannot overlook the principle that the schedule must conform to the requirement of the parents statute. Indeed if water charges were collectable by the Petitioner irrespective of the question whether any services were rendered, such a levy could only be treated as a tax for general revenue purposes. We have not been able to find any provision in Karachi Water and Sewerage Board Act, 1996 enabling the Petitioner to levy any tax. In fact both sections 7 and 8 indicate that it is only competent to collect a charge for supply of water. No doubt the rates prescribed in such cases may not invariably conform to the quantum of services rendered but it has to be shown that some service was being rendered. We may also add that at one time the Petitioner was a part of the Karachi Metropolitan Corporation, which had the authority to levy local taxes but we are extremely doubtful whether the Legislature ever intended to confer the power to levy taxes upon autonomous corporations like the one the Petitioner has become pursuant to the 1996 Act. In the circumstances, we are of the view that the water rate relating to commercial premises not connected with water line is only intended to serve a national purpose for determining the quantum of water charges payable but does not authorize the Petitioner to collect charges from a person who is not provided with any services contemplated in the 1996, Act. The petition is accordingly allowed and the Petitioner are restrained from collecting water charges till such time as supply to the Petitioner 's premises is made. [Underlining is ours]

17. In rebuttal Mr. Abrar Hasan, learned counsel for the Respondents forcefully contended that the Petitioner is in arrears of a huge amount of Rs.49,30,167/- on account of 'water', 'sewerage', 'conservancy charges' and 'fire tax' and has thus failed to make payment of the said amount though it is the legal and moral obligation of the petitioner to pay the outstanding amount of Respondent No.1 in time. Per Mr. Abrar Hasan, learned counsel for the Respondents, the 'Provisional Revised bill' dated 19.02.2000 along with demand notice [Annexure to the MoP] issued by the Respondent/KW&SB, is quite in-accordance with 'Notification' issued by Govt. of Sindh on schedule of tariff provided. Moreover, the Respondent/KW&SB vide its' letter dated 22.03.2004 [Annexure 'I' to the MoP] had also informed the petitioner vis-a-vis the rebate extended to the commercial consumer[s] by Respondent/ KW&SB and its' payment by 06.04.2004. The letter dated 22nd March, 2004 regarding the arrears in the sum of Rs.2,833,283/- [i.e. Rs.37,77,708/- (-) Rs.96,894 as rebate], referred to by the Respondent/KW&SB reads as follows:- "OFFICE OF THE DEPUTY DIRECTOR TAXES (R.R) SADDAR TOWN "KARACHI WATER AND SEWERAGE BAORD" 1st Floor Co-Operative Market Saddar Karachi No.DDT/SAD/T/128 2004 DATED: 22-03-2004 To, Mr./Mrs. M/s. KARACHI STOCK EXCHANGE PLOT NO.RY.3/3/2 B6.4.57 RAILWAY QUARTER KARACHI SUBJECT: FACILITY TO THE N.A.R.V BASED CONSUMERS IN SADDAR TOWN KW&SB It is to inform you that KW&SB has decided to give relief to the N.A.R.V based commercial consumer on the arrear amount up-to 2000/2001. In this respect the rebated Bill of Total arrears on your property up-to 2000/2001 is being issued to you for payment within due date 06-04-2004. If the rebated bill is not paid by the due date total arrears will be recovered through coercive measures in this respect warrant notice will follows. [Underlining is ours] You are therefore requested to make the payment as early as possible and to avail this facility. Your Co-operation appreciated in advance. SD/- ZULFIQAR ALI BROHI Deputy Director Taxes Saddar Town KARACHI Deputy Director Taxes Saddar Town KW&SB"

18. Per Mr. Abrar Hussain, learned counsel for the Respondent, (KW&SB), the demand of Respondent No.1 regarding the arrears is quite in accordance with law and as alleged, the Respondent No.1 has never threatened the Petitioner of any coercive action. The Respondent, KW&SB according Mr. Abrar Hussain has also provided opportunity of hearing 'vis- a-vis' clearance of the outstanding dues on account of 'water', 'conservancy', 'sewerage' and 'fire tax'. Moreover, no illegality and/or irregularity as alleged by the Petitioner was ever committed by the concerned Department of Respondent No.1 [KW&SB] in preparation of bill and demand amount from the Petitioner. Besides, Mr. Abrar Hasan, learned counsel for the Respondent No.1, vehemently argued that the question pertains to the arrears w.e.f. 1972 to 2004 involve disputed questions of law and facts which in no event can be looked into or considered under the exercise of constitutional jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973. Lastly, Mr. Abrar Hasan, learned counsel for the Respondent forcefully submitted that the instant petition as framed and filed is liable to be dismissed with cost.

19. In support of his contention, Mr. Abrar Hussain, learned counsel for Respondent No.1 [KW&SB], placed reliance on the cases of [a] Collector of Customs and others v. Sheikh Spinning Mills [1999 SCMR 1402] [b] Messrs Karimi and Company v. The Karachi Municipal Corporation [1974 SCMR 440] [c] All Pakistan Textile Mills Association and others v. Province of Sindh through Secretary and others [2004 YLR 192] [d] ABN Amro Bank v. Karachi Water and Sewerage Board [2009 YLR 775] and [e] Collector of Customs Lahore and others v. Universal Gateway Trading Corporation and another [2005 SCMR 37]. The relevant portions therefrom respectively read as follows:- [a]. 1999 SCMR 1402:

5. The controversy arising for determination in these appeals is to ascertain the exact nature of levy as to whether it is a customs duty in contradistinction to the terms 'fee' and 'tax'. As far as fix is concerned, it is distinguishable from tax. The distinction between "tax" and "fee" lies primarily in the fact that a tax is levied as a part of common burden while a fee is paid for a special benefit or privilege. Fees confer a special capacity although the special advantage as for example, in the case of registration fee for documents or marriage licence is secondary to the primary motive or regulation in the public interest. Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. It is the special benefit accruing to the individual, which is the reason for payment in the case of fees. In the case of a tax, the particular advantage if it exists at all, is an incidental result of State action. 'This distinction was elaborated by a Division Bench of the Dacca High Court in the case reported as Abdul Majid and another v. Province of East Pakistan and others (PLD 1960 Dacca 502) and it was held unless the fee is earmarked or specified for rendering services to the payee, it would amount to a tax and not a fee. In another judgment, reported as Muhammad Ismail and Co. v. Chief Cotton Inspector, Multan Division (PLD 1966 SC 388), this concept was highlighted. The then Provincial Commissioner of West Pakistan under the provisions of the West Pakistan Cotton (Control) Act (IV of 1949) imposed a fee on unginned cotton received in factories for ginning. The challenge was thrown to the validity of the fee on the ground that under clause (p) of section 30 of the Act entitled the Government to realize fee to meet the salaries of the staff only whereas, rule 26 exceeded that power and authorized the Government to impose fee even to cover the cost of improvement of agriculture relating to the cotton crop grown in West Pakistan. Section 30(p), of the Act, empowered the Government to levy the fee on the occupiers of the cotton ginning, cotton pressing or cotton-seed oil factories, by the cotton dealers or by the managers of companies to cover the expenses incurred by the Government on the administration of the Act. After careful consideration of all the facts, the nature of the Act, section 30 read with rule 26 and the validation clause, this Court agreed with the High Court that the levy was a fee for services to be rendered and could only be realised from the persons, who were benefited by those services. It was found that the occupiers of the cotton ginning factories were benefited, if not directly, at least indirectly by the measures taken, for the improvement of cotton under the Act. [Underlining is ours]. [b]. 1974 SCMR 440: The view I have taken is fully supported by our decision in Civil Appeal No. K-25 of 1947 (Messrs Hussain D'Silva Enterprises v. The Karachi Municipal Corporation) decided on the 20th of May, 1969. In this case the validity of conservancy tax levied under seaion 99(1) of the City of Karachi Municipal Act, 1933, was challenged on the ground that no arrangements for the removal of sewage, offensive matter and rubbish from the premises of the appellant was undertaken by the municipal agency. It was held that inasmuch as such arrangements had been made for the area concerned the levy of conservancy tax on the appellant's premises was legal ....As a general rule, the validity of the imposition of a municipal tax can be challenged either on the ground that the requisite power has not been conferred on the municipality concerned by the statute or the charter which governs its functions and powers; or that the imposition is not for the purposes of the municipality. The challenge cannot, however, be based on the ground that the municipality has failed to carry out its duties and obligations in a certain locality or for the benefit of certain individuals, as, municipal taxation is intended for carrying on the administration of the municipality as a whole. The failure, neglect, or inability of the municipality to perform its functions in a certain locality, comprised within the municipal area, does not relieve the citizen of his liability to pay municipal taxes, whose imposition has been authorised by law, as the liability to pay arises on account of the presence of the citizen, or the property taxed, in the area of the municipality concerned, and not as a quid pro quo for concrete services rendered. The well-established concept underlying the functioning of local government institutions is that such general taxes are for the collective good of the municipal community as a whole, and are not to be regarded as being in the nature of payment for particular utilities or services provided by the municipal administration. There are, however, exceptions to this rule such as are to be found in sections 99 and 100 of the City of Karachi Municipal Act, 1933 (hereafter referred to as the Act). which contemplate that conservancy and water taxes are to be levied only if certain services and supplies are provided to the buildings and localities concerned. It appears, therefore, that the Legislature has itself taken care to specify those charges and taxes, the payment of which would depend on the performance of certain duties and services. This condition cannot be extended to other taxes not so specified. [Underlining is ours] [c] 2004 YLR 192

14. The next contention advanced on behalf of the Petitioner was that conservancy tax was essentially in the nature of a fee for services rendered and the extent of the levy must bear a reasonable nexus with the cost of the service. It was argued that a sudden revision of rates having an impact of 10 to 20 times from what was payable earlier ex facie established that such revision was arbitrary and liable to be struck down on this ground alone. It may be explained at the outset that though the Sindh Local Government Ordinance used the generic expression "tax" to cover any tax, fee or cess the basic distinction between a tax and a fee is recognized by several pronouncements of the Honourable Supreme Court i.e. Muhammad Ismail v. Chief Cotton Inspector (PLD 1966 SC 388), Government of N.W.F.P. v. Rahimullah (1992 SCMR 750) and Collector of Customs v. Shaikh Spinning Mills (1999 SCMR 1402) need to be kept in view. The consistent view of the Honourable Supreme Court appears to be that while both tax and fee are compulsory exactions the essential difference lies in the fact that while a tax is levied for the purposes of the general revenues of the state a fee is imposed for the purposes of the specific services and its burden falls upon persons to whom such services are provided. It has therefore been held that while it may not be possible to charge fee only on the basis of the actual value of such services collected with mathematical precession some co-relations between the value of services and the quantum of fee must exist. [Underlining is ours]. [d] 2009 YLR 775

12. Thus, the settled principle of law is to the effect that as a general rule the validity of the imposition of a municipal tax can be challenged either on the ground that the requisite power has not been conferred on the municipality concerned by the statue or the charter, which governs its functions and powers; or that the imposition is not for the purposes of the municipality. The challenge cannot be based on the ground that the municipality has failed to carry out its duties and obligations in a certain locality or for the benefit of certain individuals, as municipal taxation is intended for carrying on the administration of the municipality as a whole. Further that the failure, neglect, or inability of the municipality taxes, whose imposition has been authorized by law, as the liability to pay arises on account of the presence of the citizen or the property taxes, in the area of the municipality concerned and not as a quid pro quo for concerned services rendered. [Underlining is ours] [e] 2005 SCMR 37: 7. ... The Constitutional jurisdiction should have not been exercised for the reason that alternate efficacious remedies should have been invoked as were available under sections 179, 193, 194 A and 196 of the Customs Act, 1969, which could have been conveniently availed by the respondents by approaching concerned forum available in the hierarchy of customs laws. Besides that the jurisdiction conferred upon such forum, cannot be exercised by the High Court under the garb of Article 199 of the Constitution of Islamic Republic of Pakistan, because "the object of the writs is to curb excess of jurisdiction, to keep inferior Courts and Tribunals within their bounds, and the writ jurisdiction is appropriate only in all such-cases where "substantial right" of an applicant has been so, far invaded as to prejudicially affect him if the proceeding or judgment remains un-reversed. But where substantial justice had been done, High Court declined interference despite some irregularity in proceedings. Where orders passed by Authorities below were based on evidence on record and law applicable on the subject, it could not be interfered with by High Court in exercise of Constitutional jurisdiction where petitioner failed to demonstrate before Court as to what injustice has been caused to him, where substantial justice had been done and no prejudice of any kind caused to any party interference was declined by High Court in Constitutional jurisdiction. Constitutional jurisdiction should be exercised with extra care and caution bearing in mind that there is a basic difference between want of jurisdiction and an illegal or irregular exercise thereof. The defect, if any, in an order can, according to the procedure established by law, be corrected by appeal or revision. The jurisdiction under this Article will not be made available for interfering with the orders of the Courts below simply on procedural matters or on the plane claim of propriety. The power under this Article is not intended merely, for correcting their errors in law or on fact." Dr. Sajjad Ahmad v. Dr. Muhammad Bashir PLD 1979 Lah.

304. There is no cavil with the proposition that "the provision as contained in Article 199 does not empower the High Court to interfere with the decision of a Court or Tribunal of inferior jurisdiction merely because the same is wrong as in that case it would make the High Court's jurisdiction as that of the Appellate Court's jurisdiction as that of the Appellate Court which is not the intention of the Legislature. K.M. Asaf v. Abdullah Malik PLD 1976 Lah. 158. [Underlining is ours] . . .

20. Heard.

21. At the very outset we would like to take-up the question of maintainability of the instant Constitution Petition which according to Mr. Abrar Hasan, learned counsel for the Respondent No.1 [KW&SB] is not maintainable under law as according to him serious disputed questions of fact vis-a-vis the amount of arrears claimed by the Respondent Board cannot be adjudicated under the constitutional jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973. As far as this contention of learned counsel for Respondent No.1 is concerned the same needs no debate, however, it is significant to note that the Respondents herein have failed and/or avoided to deny even a 'single word' of the Memo of Petition [In short MoP] in its' Counter Affidavit' filed in the present petition. Being relevant the main paras 1 to 5 of the 'Counter Affidavit' are reproduced herein below:- . . . "1). That I am working as Dy. Director Tax (Saddar Town) with the Respondent, (KW&SB) and fully conversant with the facts of the case. 2) That I say that a huge amount of Rs.49,30,167/- is outstanding against the Petitioner on account of water, Sewerage, conservancy charges and fire tax who has failed to make the payment and it is the legal and moral obligation of the petitioner to deposit the said bill in time. 3) That I say that Provisional Revised bill and demand dated 19.02.2000 was issued to the Petitioner by the Respondent, KW&SB in-accordance with Notification issued by Govt. of Sindh on schedule of tariff provided under provision of law. 4) That I say that the Respondent, (KW&SB) vide its letter dated 22.03.2004 informed the petitioner about the relief extended by the Respondent (KW&SB) to the commercial consumer in general based on NARV on the arrear amount for payment by 06.04.2004 and furnished the rebated bill of Rs.2,833,283/- and Rs.96,894/- for payment but even then failed to make the payment. 5) That I say that the Respondent, (KW&SB) takes the action against the defaulter in accordance with Law and never threatened the Petitioner as alleged. The Respondent, KW&SB has also provided opportunity of hearing to the Petitioner for clearance of outstanding dues of water, conservancy, Sewerage and fire tax and no illegality or irregularity is ever committed by the Department in preparation of bill of the Petitioner."

22. Adversely, Mr. Yousuf Ali Sayeed, argued that the Petitioner has not been provided any opportunity of being heard viz-a-viz the alleged claim of arrears pertaining to the last 32 years [w.e.f. 1972 upto 2004]. According to Mr. Yousuf Ali Sayeed, the claim put forward by the Respondent No.1 for the last 32 years besides without any foundation is not supported by any law/notification. Learned counsel next contended that if, there was any arrears 'as alleged' by the Respondent Board then why the Respondents remained mum for the last about 32 years.

23. In the case in hand, it is significant to note that the contents of the MoP have gone un-rebutted as such the contention of Mr. Abrar Hasan to the effect that the dispute regarding the alleged arrears and demand thereof by the Respondents in the case in hand cannot be resolved under the exercise of constitutional jurisdiction besides not convincing is against the law of natural justice as far as the case in hand is concerned. Moreover, the demand of the alleged arrears for the years 1972 to 2004 is based on no materials, and/or otherwise, supported by any law/notification. In 'Para-3' of 'Counter Affidavit', no doubt, a reference to the so-called/un-specified notification has been made however, no copy thereof was enclosed with counter affidavit' so as to justify and/or demonstrate on the basis thereof the genuineness of the alleged claim of 'so-called arrears'. Inter alia on this score as well, the 'threat advanced' under Demand notice dated 22-04-2005 to the Petitioner by the Respondent No.1 [KW&SB] not only seems prejudicial to the interest/reputation of the Petitioner but also against its' fundamental rights. Under these circumstances and in view of non-providing any opportunity of hearing regarding the alleged arrears pertaining to the past 32 years, we are of the view that against the illegal demand of arrears and also against the threat advanced to the Petitioner by which the Petitioner has directly and adversely affected. As being aggrieved by the impugned demands, the Petitioner is left with no other adequate or efficacious remedy except to file this petition for relief from this Court under its' Constitutional Jurisdiction on the grounds/pleas raised by the Petitioner. The instant petition under such circumstances is maintainable particularly when the 'so-called arrears' have never been notified/shown in any of the bills sent to and received by the Petitioner right away from the years 1972 upto 2004. The letter of threat advanced by Respondent No.2 vide its' letter bearing No.DDT/SAD/T/128/2004 dated 22nd March, 2004 reads as follows:- "OFFICE OF THE DEPUTY DIRECTOR TAXES (R.R) SADDAR TOWN "KARACHI WATER AND SEWERAGE BAORD" 1st Floor Co-Operative Market Saddar Karachi No.DDT/SAD/T/128 2004 DATED: 22-03-2004 To, MR./MRS. M/s KARACHI STOCK EXCHANGE PLOT NO.RY.3/3/2 B6.4.57 RAILWAY QUARTER KARACHI SUBJECT: FACILITY TO THE N.A.R. V BASED CONSUMERS IN SADDAR TOWN, KW&SB It is to inform you that KW&SB has decided to give relief to the N.A.R. V based commercial consumer on the arrear amount up-to 2000/2001. In this respect the rebated Bill of Total arrears on your property up-to 2000/2001 is being issued to you for payment within due date 06-04-2004. If the rebated bill is not paid by the due date total arrears will be recovered through coercive measures in this respect warrant notice will follow. [Underlining is ours] You are therefore requested to make the payment as early as possible and to avail this facility. Your Co-operation appreciated in advance. SD/- ZULFIQAR ALI BROHI Deputy Director Taxes Saddar Town KARACHI Deputy Director Taxes Saddar Town KW&SB"

24. Mr. Yousuf Ali Sayeed, learned counsel for the Petitioner while referring to the Petitioner's letter No.Gen-535 dated February 11, 2000 and letter No.Gen-966 dated February 28, 2000, forcefully urged that the Petitioner in the case in hand is regularly paying all the bills for 'water', conservancy' and 'fire charges' etc. Per learned counsel, in all upto date paid bills w.e.f 1972 upto 2004, no any arrears as claimed, by Respondent No.1 [KW&SB] for a period about 32 years, were ever shown in the bills sent to and received by the Petitioner. For ready reference the Petitioner's aforesaid letters are reproduced herein below respectively:- A. Gen-535 February 11, 2000 The Deputy Director (Taxes) Division "A" Karachi Water and Sewerage Board Karim Centre Abdullah Haroon Road Saddar KARACHI Dear Sir, Please refer to your letter No.DDT/A dated February 10, 2000 which was received in this office on February 10, 2000. In this connection, we have to inform you that the letter bearing No.1187/98 dated November 20, 1998 as referred to in your letter under reference has not been received by this office. Moreover, we have to say that the Exchange building is not a unit of flats but it is an office of the Karachi Stock Exchange (Guarantee) Limited which is paying the bills for water, conservancy and fire regularly. Paid copy of the last bill received by this Exchange is enclosed herewith for your perusal and information. [Underlining is ours]. Thanking you, Yours faithfully, SD/- NISAR AHMED QAZI Assistant Secretary Encl: As above. B. Gen-966 February 28, 2000 The Deputy Director Taxes Karachi Water and Sewerage Board KARACHI Sub: REVISED BILL FOR PROPERTY NO.3/3/2(B6-4-57) KARACHI STOCK EXCHANGE BUILDING KARACHI Dear Sir, This is in response to your letter No.DDT/A/415/2000 dated February 19, 2000 enclosing therewith a revised and amended bill for water, conservancy and fire charges. In this regard, we have to submit that the Karachi Stock Exchange has always been paying its KWSB bills regularly. A copy of the last paid bill has already been sent to you along with our letter of February 02, 2000 and is also enclosed herewith. Moreover, we are not aware of any revision in the NARV of our property. You are, therefore, requested to kindly send us the amended bill for current dues, enabling us to make the payment. [Underlining is ours] Thanking you, Yours faithfully, SD/- NAUSHAD SHAFKAT Joint Secretary (Legal) Encl: As above.

25. From the aforesaid letter of the Petitioner it is abundantly clear that the Petitioner is regularly paying the bills for 'water', 'conservancy' and 'fire charges'. Besides, the revision of NARV of the subject premises was never appraised to the Petitioner. This factum is also evident from the letter No.DDTSAD/554/2202 dated 20.11.2002 of Respondent No.2 whereby the Petitioner was asked for the first time to submit sub-lease and last payment of challan in the office of Respondent No.2. The aforesaid letter of Deputy Director Taxes, KW&SB, Saddar Town, Karachi dated 20.11.2002 reads as follows:- KARACHI WATER AND SEWERAGE BAORD OFFICE OF THE DEPUTY DIRECTOR TAXES SADDAR TOWN COOPERATIVE MARKET 1ST FLOOR, SADDAR, KARACHI No.DDTSAD/554/2002 DATED: 20-11-2002 To, KARACHI STOCK EXCHANGE PLOT NO.RY.3/3/2 B6.4.57 RAILWAY QUARTER SUBJECT: INFORMATION ABOUT FLAT/PLOT It is noted during survey that your building/plot/office/shop/flat has been Bifurcated in that response, it is in your own interest that you provide the P.T.I, year 2000-2001 and last payment challan (KW&SB). You are therefore requested to please submit the sublease and last payment challan in this office within 7 days. In case of non-receipt of Documents, no response, KW&SB can disconnect these facilities and further legal action can be taken according to the rules by KW&SB/City Government. SD/ DEPUTY DIRECTOR Taxes Saddar Town KW & SB Deputy Director Taxes KW&SB, Saddar Town, Karachi

26. In response of the aforesaid letter the Petitioner promptly replied vide its' letter No.Gen-7012 dated November 25, 2002. The Petitioner's aforesaid letter reads as follows:- Gen-7012 November 25, 2002 The Deputy Director Taxes Saddar Town Cooperative Market (1st floor) Saddar KARACHI Dear Sir, We refer to your letter No.DDTSAD/554/2002 dated November 20, 2002 and enclose herewith one copy each of P.T.I. and the last paid Challan, as desired. Thanking you, Yours sincerely, SD/- SYED QAISER AZAM Joint Secretary Encl: As above. It is significant to note that none of the aforesaid letters have been denied by the Respondents.

27. No doubt, in the three [03] days' WARRANT NOTICE of 19th May, 2004 [Annexure 'L' to the MoP], the Respondent No.1 [KW&SB] once again demanded a sum of Rs.4,068,396/- [Forty Lacs Sixty Eight Thousand Three hundred Ninety Six Only] on account of CDGK [KMC]/KW&SB charges for the period of 30th June, 2004 only. This time, it is significant to note, the demanded amount was in the sum of Rs.40,68,396/- for the period 30th June, 2004 only. For better understanding and ready reference the aforesaid three (03) days' 'WARRANT OF NOTICE' of 19th May, 2004 is also reproduced herein below:- KARACHI WATER AND SEWERAGE BOARD WATER, SEWERAGE, CONSERVANCY AND FIRE TAX (WARRANT NOTICE) DEPUTY DIRECTOR TAXES CDGK (SADDAR TOWN) No.DDT/SAD/T/241/2004 Dated: 19-May-2004. THREE (3) DAYS WARRANT NOTICE Name: Karachi Stock Exchange. Address: Railway Quarter Karachi. Survey No. Ry 3/3/2 B6.4.57 Consumer No: A-002-0007-000. WATER CHARGES SEWERAGE CHARGES CONSERVANCY TAX FIRE TAX D.N. FEE AND MISC. TOTAL AMOUNT 2428847.00 775168.00 775168.00 89207.00 06.00 4068396.00 I have to inform you that sum of Rs.4068396. 00 is due against you on account of CDGK (KMC)/KWSB Charges for the period 30th June 2004 for non-payment of the claim, demand notice followed by warrant has been issued against you under the provisions of law. Unless the above amount which is inclusive of demand notice and warrant fees is paid within THREE DAYS from receipt hereof, there will be no other alternative but to take further actions for the recovery of the amount under the warrant issued. [Underlining is ours] Sd/- Zulfiqar Ali Brohi Deputy Director Taxes KW& S.B.

28. From the averments made and record available before us it is quite clear that Petitioner is always very much regular in payment of the bills vis-a-vis 'water', 'conservancy' and 'fire charges' sent to and received by the Petitioner since the years 1972 upto 2004. Moreover, despite direction of this Court, the Respondents have failed to produce any bill wherein any amount on account of 'so-called arrears' has been shown as payable by the Petitioner to the Respondents. The Petitioner, in response to the Respondents' letter No.DDT/SAD/T/128/2004 dated 22-03-2004 also wrote a detailed letter bearing Reference No.KSC/Gen-2974 April 14, 2004 [Annexure `J' to MoP] wherewith copies of the paid bills for the years 1997-2004 were also enclosed. In the reply letter a request for withdrawal of the challans regarding 'so-called arrears' in respect of 'water', ' conservancy' and ' fire charges' seemingly issued under some misunderstanding was also made. The letter No.KSE/Gen-2974 dated April 14, 2004 reads as follows:- THE KARACHI STOCK EXCHANCE (GUARANTEE) LIMITED STOCK EXCHANGE BUILDING STOCK EXCHANGE ROAD. KARACHI-74000, PAKISTAN UAN 111-001-122 FAX: (021) 2410825 WEBSITE: www.kse.nect.pK E-mail: gm@kse.com.pk Ref No.KSE/Gen-2974. April 14, 2004. Mr. Zulfiqar Ali Brohi Deputy Director Taxes Saddar Town, Karachi Water and Sewerage Board (KW&SB) 1st Floor, Co-Operative Market Saddar, Karachi. Subject: FACILITY TO THE N.A.R.V. BASED CONSUMERS IN SADDAR TOWN KW&SB Dear Sir, This is with reference to your letter No.DDT/SAD/T/128-2004 dated March 22, 2004 on the above subject enclosing therewith the following challans in respect of water, conservancy and fire charges including the alleged arrears for the period and amount as detailed below:- (i) Challan for arrears of water, conservancy and fire tax for the period up to June 30, 2001 Rs.2,833,283/- (Annex-A) (ii) Challan for arrears of water and Sewerage for the period 2002-2003 Rs.96,894/- (Annex-B) (iii) Challan for arrears of water and Sewerage for the period 2002-2003 Rs.96,894/- (Annex-C) (iv) Challan for conservancy and fire for the period 2003-2004 Rs.48,447/- (Annex-D) In this regard we would like to submit that the KSE has made full payment of the taxes up to the period 2003-2004 and it has/had been making payment as and when received the challans for payment. For our kind perusal, we enclose herewith the copies of the following bills duly paid by KSE which will clarify the factual position. (i) Copy of paid Challan of water, conservancy and fire for the period 1997-1998 Rs.213767/- (Annex-E) (ii) Copy of paid Challan of water, conservancy and fire for the period 1998-1999 Rs.326,049/- (Annex-F) (iii) Copy of paid Challan of water, conservancy and fire for the period 1999-2000 Rs.272,490/- (Annex-G) (iv) Copy of paid Challan of water, conservancy and fire for the period 2000-2001 Rs.256,518/- (Annex-H) (v) Copy of paid Challan of water and Sewerage for the period 2001-2002 Rs.262,998/- (Annex-I) (vi) Copy of paid Challan of conservancy and fire for the period 2001-2002 Rs.67,283/- (Annex-J) (vii) Copy of paid Challan of conservancy and fire for the period 2002-2003 Rs. 63, 681/- (Annex-K) (viii) Copy of paid Challan of water and Sewerage for the period 2002-2003 Rs. 256,518/- (Annex-L) (ix) Copy of paid Challan of conservancy and fire for the period 2003-2004 Rs. 63,681/- (Annex-M) (x) Copy of paid Challan of water and sewerage for the period 2003-2004 Rs. 262,998/- (Annex-N) THE perusal of the above mentioned bills will reveal that the KSE has/had been making payment of all challans including the period of 2003-2004 and the question of arrears standing against the KSE as such does not arise. It seems that these challans (mentioned as Rebated Bills of total arrears in your above referred letter) have been issued under some misunderstanding on the part of your office. In view of the above, we trust that this clarification would enable you to review the subject matter and you will be kind enough to withdraw the subject challans in respect of the related bills and kindly confirm in this regard. [Underlining is ours] Thanking you, Yours faithfully, Sd/- SYED QAISER AZAM Manager Encl: As above.

29. From all the above, it is quite clear and evident that the Petitioner has regularly paid 'water', 'conservancy' and 'fire charges' upto the year 2004 and the revision, if any, in the NARV of the Petitioner's premises was never done/communicated and/or any arrears of 'water', 'conservancy' and 'fire charges' based on that account was ever demanded or shown in any of the bills sent to and received by the Respondents. Moreover, the Petitioner received the amount of Bills upto the years 2004 without any protest, reservation of its' right, if any, and/or otherwise, take any action against the responsible officials of Respondent No. 1.

30. With regard to the contention of Mr. Yousuf Ali Sayeed that the Respondents since, have failed to supply any water to the Petitioner's premises as such they are not entitled to levy any water charges/taxes on the Petitioner in our view, seems mis-conceived as challenge to the imposition of water charges/taxes cannot be based on the ground, that the Respondents herein have failed to supply any water to the Petitioner's premises obviously for the reason that municipal taxation is always aimed to carry out the whole administration of municipality. It is significant to note that failure, neglect or the inability of Respondent No.1 [KW&SB] to perform its' functions faithfully, in no manner relieve the citizen within the jurisdiction of municipality to pay municipal taxes charges whose imposition otherwise is authorized by the law. On this aspect of the matter reliance can be placed on the case of S. Z. Mehdi v. Government of Sindh and 3 others [1990 CLC 352] wherein Division Bench of this Court observed as follows:- "There is no dispute that the water is being supplied in that locality or in that area. Therefore, applying the principles laid down in the aforesaid judgments failure or inability of Karachi Water and Sewerage Board and K.M.C. not to supply water to the Petitioners does not mean that the water rate cannot be charged from them particularly as water is being supplied in the locality or in that area."

31. For and in view of the above the First Demand Notice, the Second Demand Notice and Warrant Notice [Annexure 'I', 'K' and 'L' to the MoP respectively] are declared as illegal and devoid of any force and/or effect as the Respondents has failed to justify/establish its' claim and/ or demand for the alleged arrears w.e.f the years 1972 to 2004, in the sum of Rs.40,68,396/- [Rupees Forty Lac Sixty Eight Thousand Three Hundred and Ninty Six only].

32. The Petition stands disposed of accordingly along with pending applications. MH/K-3/Sindh Order accordingly.