1968 PLP 915 (PTD)

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17. Scale and payment of compensation.‑(1) In addition to any compensation which may be payable under paragraph 18, compensation for land resumed under paragraph 16, shall be paid according to the following scale, that is to say : (a) for the first 18,000 produce index units, at the rate of Rs. 5 per unit ; (b) for the next 24,000 produce index units, at the rate of Rs. 4 per unit ; (c) for the next 36,000 produce index units, at the rate of Rs. 3 per unit (d) for the next 72,000 produce index units, at the rate of Rs. 2 per unit s and (e) for the balance, at the rate of Re. 1 per produce index unit:, It was urged that the assessment of the land for the purposes of payment of compensation to the land‑owner under the above mentioned para. is an arbitrary Schedule, made by the Government for the assessment of the value. Reference was also made to "Land Reforms in West Pakistan", Vol. I, para. 143 at page 110, which says :‑ "The Land Reforms Commission devoted considerable time . . . It, however, agreed that for the reasons given below, a fair compensation may be paid to the landlords . . . ." It was argued that in view of this para., fair compensation means, compensation which is not based on market value, as under para. 144 of the same Chapter, it was observed .:‑ "Compensation has to be adequate and reasonable as contemplated in Article 15 of the Constitution . . . . According to the calculation made it transpired that payment of compensa tion on the basis of Rs. 20 per produce index units on the whole will be fair and equitable although there may be cases in which it may not be commensurate with the actual market value." Continuing his argument, the learned counsel submitted that the very basis of compensation described by Martial Law Regulation No. 64 was opposed to the very concept of the "principal value" as understood under section 38 (1) of the Estate Duty Act, and according to subsection (2) of the above section, while estimating the principal value under this section, "the Controller shall fix the price of the property according to the market price at the time ox the deceased's death and shall not make any reduction, in the estimate on account of the estimate being made on the assumption that the whole property is to be placed on the market at one and the same time." It was, therefore, urged that to take into consideration the compensation scale under the "Land Reforms" for the purpose of Estate Duty was not only irrelevant, but unauthorized, because the only thing which the Act says "is not to be taken into consideration", has been taken. The scheme for the payment of compensation under Martial Law Regulation No. 64 is opposed to the provision of the Estate Duty Act. A Court may refer to evidence material which is not opposed to the purpose of law, which is to be determined but in the instant case, Martial Law Regulation No. 64 was diametrically opposed to the Act. The Tribunal took into consideration the provision of Martial Law Regulation No. 64 in determining the principal value of Mardan lands, and Martial Law Regulation was irrelevant and opposed to the concept of the principal value under the Estate Duty Act. Relying on irrelevant evidence is a question of law. "

6. It is not known as to what would have been the finding of the Tribunal if Martial Law Regulation No. 64 had been excluded from consideration, and in fact it would be a case of no evidence to differ with the finding of the Controller. Once a question of law arises, the Tribunal has no discretion in the matter and has to refer it to the High Court unless it came to the conclusion that the question sought to be referred is frivolous. Reliance was placed on Hukam Chand Jagadhar Mal v. Commissioner of Income‑tax, Punjab (A I R 1935 Lah. 637) wherein it was observed at p. 638 :‑ "Whether a, debt is a bad debt and if so at what point of time it became a bad debt, are questions of fact to be decided In the event of a dispute by the appropriate tribunal and not by the ipse dixit of any one else. This is no doubt so, but the conclusion of the appropriate Tribunal must be based on relevant and admissible evidence and the question whether there is such evidence to support the conclusions arrived at by the Income‑tax authorities, will still remain a question of law open to consideration by this Court. We require the Commissioner to state the case and refer it to this Court. The question that we formulate is, whether there is any relevant and admissible evidence to support the conclusion that the sum of Rs. 26,721 became a bad debt in 1929. Costs will abide the event." The conclusion must be based on relevant and admissible evidence. While concluding his argument, the learned counsel for the petitioner urged that the conclusion must be based on relevant and admissible evidence, and since in this case Martial Law Regulation No. 64 was relied upon as the basis for the assessment of the valuation of the land, there is a point of law td be considered and the tribunal was bound to have referred the case for the opinion of the High Court.

7. The learned counsel for the respondent made a reference to section 38 of the Estate Duty Act, and urged that in view of subsection (1) of the above‑mentioned section, the principal value of the property shall be estimated to be the price which, in the opinion of the Controller, it would fetch if sold in the open market at the time of the death of the deceased. How the Controller has to form the opinion that the land would have fetched so much price at the time of the death of the deceased, and so it means that anything which may influence him would enable him to forth an opinion, which shows that there is absence of procedure to be followed by the Controller in coming to the conclusion about the market value of the land. This section does not lay down that the Controller has to follow certain procedure while assessing the value of the property, and so he is the final deciding authority. Once the tribunal had determined as to what is the principal value, the Department must demonstrate before it that a question' of law arises which has been erroneously answered, and the Appellate Tribunal shall if in its opinion a question of law arises out of such an order, state the case for the opinion of the High Court, as contemplated by section 59‑A of the Act. The Mardan lands had been valued by the Revenue authorities at Rs.1,85,47,317, but the Controller valued the Mardan and Peshawar lands at Rs. 1,76,79,100, and so it follows that he has not followed the mode provided by the Revenue authorities. In para. 4 of the judgment, the Tribunal observed that there were three known methods open to the Controller for the valuation of agricultural lands, namely : ‑ (i) Market price which is obtained on the basis . of sale of similar lands in the locality; (ii) Multiple of 20 times the net income from the property; and (iii) Multiple of land revenue. It was observed :‑ "According to the report of District Revenue authorities no significant sales took place of identical lands in the locality during the five years preceding the death of late Nawab of Hoti. The other two methods have also not been followed by the Controller." It. is, therefore, obvious that in the opinion of the Tribunal, the finding of the Controller was sketchy and based on no evidence. The Controller had acted without any basis for his order, because it was vague. Having rejected the order of the Controller, the Tribunal undertook to find out the market value: They have the knowledge that Mardan lands are inferior to Peshawar. They also relied upon in support of this view on the produce index unit, regarding the fertility and productivity of land. In coming to the conclusion that the lands of Peshawar are more productive, fertile and superior than the lands of Mardan, the tribunal in para. 6 of the judgment observed: "The Peshawar lands passing to the Accountable person lie in Charsadda Tehsil, Peshawar district, the area which is known for its fertility and productivity and superior in all respects to the lands of the District of Mardan and even lands in other parts of Peshawar District. The price index prepared for the purposes of carrying into effect the provisions of Martial Law Regulation No. 64 which is an official document proves in unmistakable terms the otherwise known superiority of Charsadda lands over Mardan lands . . . . In our view the price ‑index cited and relied upon by the appellant furnishes a good broad basis for determining the value of Mardan lands and can safely be taken as a guide, based as it is one factor, among' others, of sales in the localities and income."

8. The learned Appellate Tribunal had relied upon the produce index unit not with a view to assess the land for the purpose of compensation but with a view to satisfy itself about its fertility and productivity. The produce index unit relied upon by the Tribunal gives 100 units of production from Peshawar' lands and 63 from Mardan lands, and so it is obvious that the Peshawar lands in view of this index unit are more fertile and productive. This index was also accepted by the Controller, because on account of this index, he, valued the Peshawar lands at the rate of Rs. 1,000 per acre, as its produce units were 100, whereas the unit production of Mardan was 63, and in view of this calculation, the lands of Mardan could have been valued at Rs. 630 but the Controller valued it at Rs. 1,

200. The Tribunal, however, reduced it td Rs. 800 per acre, which is Rs. 170 more than the valuation on the basis of the index produce unit, and this increase has been explained by the Tribunal by stating:‑ "It, however, appears that the framers of the price index did not take into consideration the growing increase in the sugar‑cane production in Mardan District which started near about the death of 'the late Nawab, and for this reason the gap in the prices of lands in the district should not be as high as shown in the said index."

9. In para. 3 of the order, dated the 30th of June 1966, the Tribunal while refusing to state the case to the High Court observed‑:‑ "'The learned‑counsel appearing in support of the application submitted‑that he had no objection to the valuation placed upon the Maidan lands. What, he said, he objected to was the basis adopted for the purpose of such valuation." It is, therefore; clear that the valuation placed on the Mardan lands was not 'objected to by the learned counsel before the Tribunal, but the objection Was with regard to the basis adopted for the purpose of Valuation, and so it is obvious that this objec tion is of academic interest, which cannot be gone into, and it does not mean that the order passed by the tribunal refusing to state the case to the High Court on this ground is frivolous. Any question of law which is purely academic and the answer to which would have 'no bearing on any actual right or liability of the tax‑payer, should not be answered but the High Court, and should not, in the first instance, be made the subject of a reference to the Court. The observation made by the tribunal in para. 3 of the judgment reproduced above, would show that there is no basis for the contention of the learned counsel for the petitioner that, the finding of the tribunal is incorrect, as he had no objection to he valuation placed upon the Mardan lands. Furthermore, the learned counsel for the Department has not said sword in this petition, challenging the observation made by the Tribunal ‑ about the concession made by him, nor he has filed an affidavit in this Court showing that he had not made this concession.

10. The petitioner has to show that there is a point of law which requires determination by the High Court. The fact that the Tribunal while assessing the Mardan lands at Rs. 800 per acre had among other factors partly relied upon the produce index units is a finding of fact and in order to refer a question to the High Court arising out of the order of the Tribunal must be one of law. The learned counsel for the petitioner failed to show that the tribunal while assessing the Mardan lands at Rs. 800 per acre had no material before, and that the order passed by ii was frivolous or perverse, and so finding no force in this applica tion, we dismiss it with costs. K. B. A. Petition dismissed.