P L D 2011 Lahore 165 (PLP)

MAMOON RASHID SHEIKH, J.

With the consent of the parties this petition is being treated as a Pacca matter and shall be decided on the basis of the available record.

2. The brief facts giving rise to the petition, as given in the petition, are that the petitioner purchased the residential plot in question (fully described in para-1 of the petition) from one Atif Shamsher, through the sale-deed in dispute, for a total consideration of Rs.9,20,

000. The sale-deed in dispute after completion was presented by the petitioner to respondent No.2 for registration against a receipt therefor. However, when the petitioner approached respondent No.2 for collecting the (registered) sale-deed, he was informed that the sale-deed in dispute had not been registered as the tax on transfer of immovable property (lands and buildings), hereinafter referred to as "the TIP Tax", in respect of 'the plot in question had not been paid. The petitioner approached respondent No.1 for payment of the TIP Tax. Upon inquiry he was informed that the TIP Tax would be chargeable at the rate of 1% of the value of the plot in question according to the valuation table prepared by respondent No.1. The petitioner protested against the demand as according to him the TIP Tax was chargeable on the basis of the consideration mentioned in the sale-deed in dispute. The petitioner was, however, directed to pay the TIP Tax as demanded by respondent No.1.

3. The petitioner assails the demand of respondent No.1, inter alia, on the grounds that it is against the provisions of section 60 of the Cantonments Act, 1924, read with Notification bearing S.R.O. No.1786(1)/73 dated 26-12-1973. Under the law respondent No.1 can only charge the TIP Tax on the basis of the consideration mentioned in the sale-deed in dispute and, moreover, respondent No.2 has no authority to retain the sale-deed in dispute.

4. The learned counsel for the petitioner submits that under section 60 of the Act, ibid, read with the Notification, ibid, respondent No.1 has the authority to collect the TIP Tax within its limits. The TIP Tax is, however, to be charged and collected at the rate of 1% of the sale consideration mentioned in the sale-deed in dispute. The demand of respondent No.1 for charging of the TIP Tax according to the valuation table prepared by respondent No.1 is illegal and without jurisdiction. Further' submits that the consideration mentioned in the sale-deed in dispute is in consonance with the value of the plot in question as given in the valuation table (Notification No. 296DO(R)/HRC dated 24-6-2008) prepared by the District Officer (Revenue), Rawalpindi, under section 27-A of the Stamp Act, 1899. The consideration mentioned in the sale-deed in dispute is by no stretch of the imagination less than the value of the plot in question mentioned in the said valuation table. The respondents can only charge and collect the TIP Tax in terms of section 60 of the Cantonments Act, 1924, read with Notification bearing S.R.O. No.1786(I)/73 dated 26-12-1973 and the consideration as given in the sale-deed in dispute which in turn is based on the valuation as given in Notification No.296 DO(R)/FIRC dated 24-6-2008 read with section 27-A of the Stamp Act, 1899.

5. Relies on the judgments reported as Sardar Ali Shah and another v. Cantonment Board Taxila through Executive Officer (2009 MLD 1462), Okara Textiles Limited and another v. Deputy District Officer (Registration). Okara and another (PLD 2007 Lahore 507), Sheikh Alla-ud-Din v. Cantonment Executive Officer, Walton Road. Lahore (PLD 2009 Lahore 389).

6. Further submits that the petitioner is willing to pay the TIP Tax leviable at the current rate but according to the consideration mentioned in the sale-deed in dispute.

7. The learned counsel for the respondents submits that the petitioner is liable to pay the TIP Tax according to the valuation table prepared by respondent No.1. Further submits that the rate of the TIP Tax has been enhanced from 1% to 3% by virtue of Notification No.296 DO(R)/HRC, dated 24-6-2008. Prays that the petition may be dismissed.

8. I have examined the record with the assistance of the learned counsel for the parties. I find that the matter in issue revolves around the interpretation of S.R.O. No.1786(I)/73 dated 26-12-1973. The relevant portions whereof are being reproduced hereunder for ease of reference:-- "S.R.O.No.1786(I)/73.

In exercise of the powers conferred by section 60 of the Cantonments Act, 1924 (II of 1924), the Cantonment Board, Rawalpindi, with the previous sanction of the Federal Government hereby imposes a tax on transfer of immovable property (lands and buildings) within the limits of the Rawalpindi Cantonment payable by the transferee at the rate of 1 per cent of the consideration money of such property: Provided that the tax shall not be charged on the-- (a) transfer of immovable property acquired for construction of mosques and other places of worship; (b) transfer of evacuee property made at the first time to a claimant; and (c) transfer of property to the legal heirs after the demise of the owner or owners.

2. In case no consideration money is paid to the transferor, or is concealed or is deliberately shown less, then market value assessed by the Cantonment Board authorities shall be taken as consideration money for the purposes of assessment of the tax. 3 (Emphasis provided)

9. From a perusal of the above, it is evident that the TIP Tax is to be charged according to the consideration mentioned in the instrument of sale. In this case the sale-deed in dispute. And not according to the valuation table prepared by the concerned Cantonment Board (respondent No.1). I find support for the above from the judgment in Safdar Ali Shah's case (supra) wherein Mr. Justice Maulvi Anwarul Haq (as he then was), inter alia, held that: "(3) I have gone through this file. I find that Annexure-C 1 has been prepared by the Executive Officer of the respondent-Board proposing increase in the rates already fixed by the Collector in terms of section 27-A of the Stamp Act, 1899. There being no legal basis for the said rates proposed by the Executive Officer either in terms of said section 27-A or section 60 of the Cantonments Act, 1924, the same are wholly without lawful authority and the petitioners cannot be asked to pay TIP with reference to the said proposed rates. Apart from this relevant S.R.Os. issued by the respondent-Board itself which are Annexures R.I and R.2 the Board is competent to recover TIP Tax at the rate of 2% (later enhanced to 5%) of the consideration money paid by the transferee. The mode of charging and levying the tax having been, thus, prescribed the respondent-Board otherwise will not be having any lawful authority to charge the tax on any amount other than consideration paid by the transferee, which of course is to be determined from the transfer document."

10. It is an admitted fact that the sale of the plot in question took place and the sale-deed in dispute was presented before respondent No.2 for registration. Respondent No.2, however, citing non-payment of the TIP Tax declined to register the sale-deed in dispute. The TIP Tax was not paid as respondent No.1 sought to charge it according to its own rates. This demand of respondent No.1, as has been held above, is illegal and without lawful authority. The amount of TIP Tax to be levied on a given sale-deed is to be based on the consideration mentioned in the sale-deed and not according to the valuation table prepared by respondent No.1. In the instant case, the sale consideration has been mentioned in .the sale-deed in dispute in the amount of Rs.9,20,000 which admittedly is according to the valuation table prepared by the D.O.R. (Rawalpindi).

11. Under the circumstances, this petition is accepted and respondent No.1 is directed to calculate the TIP Tax leviable on the sale-deed in dispute on the basis of the sale consideration mentioned therein. The petitioner shall, however, be liable to pay the TIP Tax at the current rate which according to the learned counsel for the respondents is 3 per cent. Respondent No.2 in turn is directed to complete the formalities for registration of the sale-deed in dispute after payment of the TIP Tax as mentioned hereinabove and to deliver the registered sale-deed to the petitioner against a proper receipt.

12. There is no order as to costs. M.H./A-19/L Petition allowe