P L D 1964 (W (PLP)

WAHIDUDDIN ARMED, J.‑In this writ petition M/s. Pakistan Tobacco Co. Ltd., who are carrying on the business of manu facture and sale of cigarettes and tobaccos of various brands, and have its factories located both in East and West Pakistan, including amongst them a factory at Mauripur in Sind Industrial Trading Estate, have challenged the competency of the Karachi Municipal Corporation to levy Terminal Tax on the goods imported and used in its Mauripur factory. They have further challenged Rule 5‑B of the Terminal Tax Rules, Chapter V, Schedule 8 of the Municipal Act, 1947 reproduced below :‑ Raw materials and finished products thereof belonging to factories situated in the area comprised within the Sind Industrial Trading Estate, and passing the limits of Karachi Municipal Corporation on their way to or from such factories shall be taxed each time at half the schedule rates, provided that such factories maintain current accounts with the Corporation in accordance with Rule 24 of the Terminal Tax Rules, and such goods are transported from the barrier of entry to the barrier of exit within two hours, without change of Bulk and further that the officer in charge of exit barrier certifies the goods to have passed through. This rule is in operation with effect from the 1st of July 1957 within the Municipal limits of Karachi Municipal Corporation.

2. The petitioners have alleged that in the calendar years 1962 and 1963 they had to pay a sum of Rs. 2,10,548.16 and Rs.1,17,147.84 respectively as Terminal Tax. This imposition and recovery is challenged on numerous legal grounds. Their case is that after the repeal of the City of Karachi Municipal Act of 1933 by the Municipal Administration Ordinance X of 1960, the respondent‑Corporation is no longer competent to charge any Terminal Tax whatsoever on the goods imported within the Karachi Municipal limits. It is contended that after the promulgation of the above‑mentioned Ordinance, the Karachi Municipal Corporation did not obtain the sanction of the Provincial Government to levy tax under item No. 4 of the Third Schedule and for this reason it cannot collect any Terminal Tax. In the alternative it is contended that even if no such permission is necessary the tax contemplated under item No. 4 cannot be levied because the goods imported in their factory are not consumed, used or sold within the Karachi Municipal limits and being in transit are not chargeable for any such tax. Besides other grounds the validity of Rule 5‑B is challenged on the ground that it purports to levy Terminal Tax on goods in transit, which is neither permissible under the Karachi Municipal Act, 1933 nor under the Municipal Ordinance, 1960.

3. On these grounds the petitioners have claimed that the respondent be directed to refrain from imposing and recovering any tax on those goods which pass through the Karachi Municipal limits on their way to the Mauripur factory or from the factory to destinations outside Karachi Municipal limits. It is further claimed that Rule 5‑B of Chapter V, Schedule 8 of the Municipal Rules be declared as ultra vires of the City of Karachi Municipal Act as also of the Municipal Ordinance X of 1960. Finally it is prayed that the respondent‑Corporation be directed to refund the amounts illegally realised as Terminal Tax under the above‑mentioned Rule or otherwise.

4. The writ petition is resisted on behalf of Karachi Municipal Corporation. The respondent's case is that the petitioner‑company are carrying on the business of manufacture and sale of goods through their Head Office situated within the Municipal limits. It is stated in the written statement that all the goods destined to East Pakistan are unloaded in the K. P. T. Area and then reloaded for export in K. M. C. limits. Respondent has justified the collection of Terminal Tax on the goods belonging to the petitioners on the grounds that these are imported into the city on account of sale and purchase transactions concluded in petitioners' office at Mcleod Road, Karachi and are loaded and unloaded in K. M. C. limits.

5. The writ petition is further contested on the ground that the relevant repealed provision of the Karachi Municipal Committee Act, 1933 stands saved under section 4 (2) of the Municipal Ordinance which is in the following terms :‑ "4 (2) Where an enactment stands repealed under sub‑section (1), any appointment, rule, regulation, or bye‑law made, notification, order or notice issued, tax imposed or assessed, contract entered into, suit instituted or action taken under such enactment shall, so far as it is not inconsistent with the provisions of this Ordinance and the rules, be deemed to have been respectively made, issued, imposed or assessed, entered into, instituted or taken under this Ordinance." The alleged recovery of Terminal Tax in the years 1962 and 1963 is denied on the ground that in the absence of the details of the alleged payments it was not possible to make any positive statement.

6. The petitioners in further affidavit filed on their behalf have made an attempt to explain that leaf tobacco from various parts in the former N.‑W. F. P. and the Punjab regions are transported in wagon loads direct to their Mauripur factory at Sind Industrial Trading Estate without being unloaded anywhere within the Karachi Municipal limits and are unloaded at a Railway siding at the Mauripur factory where Railway clerks on giving delivery collect the railway receipts. In respect of wrapping and packing materials it is alleged that these are dispatched from Lahore and Jhelum in truck loads, which are only in transit through the Karachi Municipal limits.

7. In reply the respondent‑Corporation have admitted that a Railway Station has been set up in Sind Industrial Trading Estate area after the decision of the Supreme Court in the case of Textile Mill‑Owners' Association, sometime in January, 1963. But they have denied to have recovered the impugned tax on the goods imported in wagons and unloaded at the said Railway Station. They have asserted that it is recovered only on such goods which are imported from upcountry, and unloaded or reloaded within Municipal limits. In respect of the goods brought in trucks taken to petitioners' Mauripur factory it is explained that no tax is charged on them unless‑ (i) They are found to contain such other materials in addi tion to packing materials which are to be unloaded within K. M. C. limits, and (ii) contain such goods of other parties as are to be unloaded in Municipal limits, and for which purpose the entire goods are first unloaded, and thereafter the petitioners' exclusive goods are reloaded for their destination.

8. It will thus be noticed that the respondent not only are denying the factum of the alleged recoveries but have also disputed the fact and allegation of charging the impugned tax on the goods in transit. Therefore, the question whether the amounts in dispute were in fact recovered and have any connection with the goods in transit cannot be decided without full and effective investigation, which would involve enquiry in the nature of rendition of accounts. In writ jurisdiction this Court has always declined to investigate disputed facts of this nature. We would, I therefore, refrain from giving any finding on this dispute. It i open to the petitioners, if so advised, to approach the ordinary Civil Court of competent jurisdiction for the redress of this grievance.

9. We will now proceed to consider the dispute between the parties about the competency of the Karachi Municipal Corpora tion to charge Terminal Tax on the goods imported or exported from within the Municipal limits. The learned counsel for the petitioners has challenged the competency of the Karachi Municipal Corporation to charge Terminal Tax on two‑fold grounds; Firstly, that the respondent‑Corporation is not competent to charge Terminal Tax under the Municipal Administration, Ordinance, 1960 and secondly, that rule 5‑B of the Municipal Rules is ultra vires both of the Karachi Municipal Act, 1933 and the Municipal Administration Ordinance X of 1960. These grounds will be discussed separately.

10. In support of the first ground that the Karachi Municipal Corporation after coming into force of the Municipal Administration Ordinance X of 1960 is not competent to charge any Terminal Tax, Mr. M. Anwar, the learned counsel for the petitioner contended that the items of taxation authorised by the Ordinance are limited to item Nos. 1 to 26 in its Third Schedule and the impugned Tax Is not covered by any of them. The learned counsel contended that at best the respondent could rely on item No. 26 of the Schedule but it would not be applicable unless it is proved that there exist a statute under which the Provincial Government is authorised or empowered to levy the Tax of this nature. In this connection the learned counsel referred us to section 33 of the Municipal Ordinance X of 1960 and the various items in the relevant Schedule. Under section 33 of the Ordinance a Municipal Committee, with the previous sanction of the Government, is empowered to levy in the prescribed manner the taxes mentioned in the Third Schedule. Items Nos. 4 and 5 of the said Schedule are in the following terms :‑ "(4) Tax on the import of goods for consumption, use or sale in a Municipality; (5) Tax on the export of goods from a Municipality." It is contended that none of these items are applicable for the goods in dispute neither are consumed, used or sold within the respondent Municipal limits nor are exported from its limits. The learned counsel then referred to item No. 26 which is in the following terms "(26) Any other tax which the Government is empowered to levy by law." The learned counsel contended that after the enforcement of Ordinance No. X of 1960, the West Pakistan Government has not been empowered to levy Terminal Tax within its territory. The result would be that no Municipality was competent to charge this tax and the position of the Karachi Municipal Corporation being not different from other Municipalities, it was also not competent to levy this tax within its limits. In such circumstances, he contended that the Terminal Tax already levied by the respondent‑Corporation would not be saved under section 4 (2) of the said Ordinance. In short, the argument is that since under the Karachi Municipal Administration Ordinance, 1960 no Terminal Tax is permissible to be levied, the Terminal Tax charged by the Municipal Committee under the Karachi Municipal Act, 1933 stands repealed and the respondent‑Cor poration is no longer competent to levy it.

11. The contention of the learned counsel has received our anxious consideration. Recently the validity of the Terminal Tax charged by the Karachi Municipal Committee under the Karachi Municipal Act, 1933 came up for consideration before the Supreme Court in the case of Pakistan Textile Mill‑Owners' Association v. Administrator of Karachi (P L D 1963 S C 137) In this connection, their Lordships at page 144 of the report observed as under :‑ Again, so far as the Municipal Administration Ordinance of 1960 is concerned, we do not think that its provisions could have any relevancy in determining the powers of the Chief Commissioner vis‑a‑vis the Karachi Municipal Corporation in 1957, for, the validity of the revised Schedule introduced by the Notification of 1957 had to be judged by the state of the law prevailing on that date. In any event, its provisions do not make any appreciable change, for under section 3 (19) thereof `Government' still means in the case of the Federal Capital the Central Government and in other cases the Provincial Government and the power of taxation given by section 33 thereof extends to the items enumerated in the Third Schedule. Terminal Tax finds no specific mention in this Schedule, but in Item 26 of the said Schedule a general power is given to levy any other tax which the Government is empowered to levy by law'. If terminal tax is taken to fall into this general category, then again it must be a tax which the Government is empower ed to levy by law. In April 1960, when Ordinance X of 1960, was promulgated the City of Karachi was no longer the Federal Capital, hence the appropriate Government was the Provincial Government of West Pakistan which had no power to levy any terminal tax on goods imported by sea or air. Thus in the above‑mentioned case the points raised were indirectly before the Supreme Court and the impugned tax was found to be invalid only in respect of goods imported by sea or air on the ground that the Provincial Government had no power to levy terminal tax on such goods. In other respect the impugned tax was held to be valid. While considering the power of the Provincial Government to levy tax their Lordships only considered the subjects which were within the sphere of its legislation. Their Lordships did not approach the question from the point of view whether the Provincial Government was empowered to do so by any statute. Being satisfied that it had no such constitutional power the impugned tax was declared as invalid to that extent the learned counsel, however, contended that these observations support petitioners' case in so far as it is clearly stated that the levy of such tax could only be held valid if It is found that the Provincial Government had power to levy it.

12. In view of this, we would examine this argument in detail. There is no doubt that the word "Government" mentioned 'in section 33 and item No. 26 refers to Provincial Government, both under the Municipal Administration Ordinance, 1960 and l In section 2 (28) of the General Clauses Act. It is, therefore, perfectly clear that under item No. 26 a Municipal Committee is competent to levy only such taxes which the West Pakistan Government is empowered to levy by law. Mr. M. Anwar contended that under the Constitutional provisions applicable at the material time a Provincial Government had no competency to levy any tax without the authority of the Provincial Legislature. In this connection we were referred to Article 93 of 1956 Con stitution, which is in the following terms :‑ "No tax shall be levied for the purposes of a Province except by or under the authority of an Act of the Provincial Legislature." The learned counsel contended that the Provincial Govern ment which consisted of the Provincial Governor was only entrusted with the executive authority of the Province and had no power to levy any tax without a statute passed by the Legislature. He then pointed out that whenever the Legislature intended to confer power on a Municipality to levy tax of the nature which a Legislature could impose, it used different language. In support he referred to section 96 (2) (d) of the Karachi Municipal Act, 1933, which is as under :‑ "Any other tax which the Provincial Legislature has power under the Government of India Act, 1935, to impose in the Province."

13. Therefore, the learned counsel strongly contended that in law the Legislature must be deemed to have knowledge of this position and when under Item No. 26 it enacted "any other tax which the Government is empowered to levy by law" it meant only those taxes which the Government is empowered to levy under a statute passed by the Legislature. In our judgment, the contention of the learned counsel has no force. In the first place, in 1960, when Ordinance X of 1960 was promulgated there was no Provincial Legislature in existence. Both the executive and the legislative authority vested in the Governor or the President. It could, therefore, be legitimately argued that the word "Government" referred to in the Ordinance, was used in its broad Constitutional sense. It cannot be denied that the Municipal Ordinance X of 1960 was enacted at a time when the executive head of the Provincial Government was fully competent to legislate without referring to the Legislature on any subject including taxation. Such seems to be the effect of clause 5 of the Laws (Continuance in Force) Order, 1958. In the second place, the language used in item No. 26 does not require that the tax levied: must be such which the Government is empowered to levy under C law. On the other hand it provides that it should be "any other tax which the Government is empowered to levy by law". In other words, it permits a Municipal Committee to levy such tax which the Provincial Government is competent to levy through the agencies, means or instrument of the law. The word "law" in the context not only includes a statute but also Constitutional Law. What is therefore to be seen is whether the Provincial Government which at the material time meant the Governor had the power to legislate on the subject of the tax in question. Judging from this angle the answer must be in the affirmative.

14. Assuming for the sake of argument that petitioners' contention is correct, there is little doubt that under section 4 (2) of Ordinance No. X of 1960 reproduced above, the terminal tax charged immediately before its enforcement by the Karachi Municipal Corporation validly remained into operation. Under the above‑mentioned saving clause where an enactment stands repealed any tax imposed under such enactment shall as far as it is not inconsistent with the said Ordinance, be deemed to have been respectively imposed under it. Petitioners' counsel was unable to satisfy us that the impugned tax charged under the repealed enactment by the respondent was in any sense or way inconsistent with the Municipal Ordinance. It is not disputed that the West Pakistan Government could levy such tax under the authority of its Legislature, and once this position is accepted it is not possible to hold that the impugned tax is inconsistent to the provisions of the Municipal Ordinance.

15. Besides, we find much force in the contention of Mr. Fazale Haq, the learned counsel for the respondent that under Article 237 of 1962 Constitution the impugned tax is saved and enforceable until it is varied or abolished by Act of the appro priate Legislature. The Supreme Court upheld the validity of the impugned tax in Textile Mill‑Owners' Association's case and on this basis also the validity of the terminal tax charged by the Karachi Municipal Committee cannot be questioned. It is argued that the tax and fees referred to in the above‑mentioned provision of law are only those which were validly levied. This argument is not sound for there is no such reservation. It refers to all Taxes levied under any law in force immediately before the commencing day. In the above‑mentioned judgment the Supreme Court upheld the validity of the impugned Tax. Their Lordships' interpretation of similar Constitutional provisions at page 142 of the report is as under :‑ "So far, however, as the terminal tax on goods imported by Railway is concerned, it must be held that the Chief Commis sioner could validly sanction the revision of the Schedule for, he being the Provincial Government for the City of Karachi would be the competent authority to grant such sanction in 1957 under the Act of 1933. The latter Act was an existing law which was continued in force by Article 224 of the late Constitution. The sanction of the Chief Commissioner, there fore, to the revision of the tax in respect of such goods was competently given in his capacity as the Provincial Government of Karachi whose executive power certainly extended to all matters in respect of which a Provincial Legislature could legislate." We would, therefore, hold that the terminal tax charged by the Municipal Committee immediately before the promulgation of Ordinance X of 1960 being not inconsistent with the provision of the Karachi Municipal Act and having been validated by Article 237 of the present Constitution, is valid and did not become ineffective as contended on behalf of the petitioners.

16. The next question for consideration is whether Rule 5‑B referred to above is ultra vines of the provisions of the Karachi Municipal Act so as to make it ineffective under the provisions of Ordinance X of 1960, Mr. M. Anwar, the learned counsel for the petitioner contended that under the above‑mentioned rule, the respondent‑Corporation is charging terminal tax at concessional rates on goods which are transported from the barrier of entry to the barrier of exit within two hours, without change of bulk, which in other words means that they are charging terminal tax on the goods in transit. This contention also has not much force. The object of this rule is to grant relief in certain cases in respect of the goods which are subject to terminal tax. In case of goods which are transported from the barrier of entry of the Karachi Municipal Committee to the barrier of exit, terminal tax is to be charged only at half of the Schedule rate provided such goods are transported within two hours without change of bulk. It would be, therefore, too much to hold that it applies only to the goods in transit. One can visualise that it would cover those goods also which are brought within the Municipal limits or unload ed there or received some other service before they are transport ed from the barrier of the entry to the barrier of exit. If such goods are transported within two hours without change of bulk then a certain advantage is available to the owner of the goods in the payment of the terminal tax. Surely, in such cases it cannot be contended that the impugned tax is being charged on the goods in transit. We find no reason to disbelieve the affidavit filed on behalf of the respondent‑Corporation that they are not charging any terminal tax on the goods in transit. It is clearly stated in it that terminal tax is charged only on those goods which are either loaded or unloaded within the K. M. C. limits or on those which are unloaded in the K. P. T. area and then reloaded for despatch to East Pakistan.

17. It is urged that on this admission a limited relief of declaration in respect of goods in transit be granted. We find no justification to grant. such relief on the facts of this case. The law on the point needs no further elucidation. In the case of Textile Mill‑Owners' Association referred to above it was at length discussed by the Supreme Court. In this connection their Lordships observed at page 146 of the report as under "Under the definition given in the Rules framed by the Municipal Corporation the word `import' means the bringing in of goods into the terminal tax limits from outside those limits. In the present case the goods are, in fact, so brought in, unloaded and stored there along with other goods similarly brought in, then reloaded for transshipment to the factory. In every sense of the term, therefore, the goods are in our view, imported into the Municipal limits of Karachi. We see no reason, therefore, to give any artificial meaning to the word `import' as sought to be contended by the learned counsel. `Import' and `Export' in their ordinary and natural sense mean to bring into or to take out of or away from a particular place. The introduction of the notion that there must also necessarily be a mixing up in mass with other goods within those limits seems to us to impose an unjustifiable restriction upon the meaning of the word `import'. In a taxing statute, as in any other statute, we see no reason to depart from the general rule that words used in a statute must first be given their ordinary and natural meaning. It is only when such an ordinary meaning does not make sense that resort can be made to discovering other appropriate meanings. In the present case no such difficulty is created by giving the words `import' and `export' their ordinary and natural meaning." Their Lordships further observed :‑ The word `terminal' must also have reference to a terminus a quo or ad quem. Thus goods merely in transit are not liable for such a terminal tax, as their journey has really no terminal point within the Municipal limits. In the case of the goods of the appellants, on the other hand, there is clearly such a terminal point, namely, the rail head, and the tax is levied at such terminal point. We see no justification, therefore, for holding that the levy of the terminal tax upon goods brought in by rail was, in any way, illegal or ultra vires. This is the law declared by the highest Judicial Court in this country. It is binding on the parties. According to the view taken in that case if the respondent‑Corporation charge tax on goods which are merely in transit their action would be clearly illegal. But if goods are brought in, unloaded and stored within the Municipal limits or some service is rendered to them within the Municipal limits, the right of the Municipal Committee to charge terminal tax on them cannot be challenged.

18. After carefully considering the arguments advanced by the petitioners' counsel we hold that Rule 5‑B promulgated in 1957 under the Karachi Municipal Act is not ultra vires of the Karachi Municipal Act, 1933. We further hold that under the Municipal Administration Ordinance X 'of 1960, the Karachi Municipal Corporation has got full power to collect and levy terminal tax. The repeal of the Karachi Municipal Act, 1933 by the Municipal Administration Ordinance X of 1960 has not made any material difference in this respect. We further hold that the Karachi Municipal Corporation is not entitled to charge any tax on the goods in transit. In the circumstances of the present case, however, we do not consider that any writ should be issued to the Karachi Municipal Corporation in regard to the allegation that certain amounts have been recovered from the petitioners in respect of the goods in transit because there is no material before us to come to any such conclusion. On the material available in this matter it is not possible to decide this dispute.

19. In the result, we find no force in this writ petition and dismiss it with costs. K.B.A. Petition dismissed