1997 PLP 1486 (CLC)

Agha Tariq Mehmood for Respondent. Dates of hearing: 22nd and 23rd April This judgment will dispose of both the writ petitions above‑cited as common questions of law are involved, though facts are to some extent different.

2. The common law point raised in both the petitions is that the tax can only be levied through a Statute by a competent Legislature and as such the respondents by imposing commercialization fee have transgressed in the field of Legislature for which they have no legal right; that the levy of commercialization fee offended the provisions contained in the Punjab Local Government Ordinance, 1979, and the Punjab Local Councils (Taxation) Rules 1980, framed there under; that the levy of commercialization fee was not covered by the Second Schedule of the Ordinance (ibid) and, as such, the respondents had no jurisdiction to impose the same and lastly without conceding, it was contended that even if it is assumed that the respondents had power to levy the commercialization fee, even then the procedure prescribed for levying such tax as laid down in the relevant Statute and Rules was not followed. Finally, it was alleged that the notification issued for the levy of commercialization fee could not be given retrospective effect and on that ground too, it was bad in the eyes of law.

3. Elaborating the above points, it was submitted that the tax could only be levied through the Legislature and the Local Council or the Government was not competent to impose any tax as laid down in the Constitution of Islamic Republic of Pakistan, 1973. Since the Provincial Legislature had promulgated Punjab Local Government Ordinance, 1979, to regulate the working of the Local Councils in Punjab, therefore, any step towards taxation had to be taken under the provisions contained in the aforesaid Ordinance. In this regard, reference to section 137 (ibid) was made to show that a Local Council subject to the provisions of any other law may, and, if directed by the Government of Punjab, shall levy all or any of the taxes enumerated in the Second Schedule. Since the levy of commercialization fee/tax was not mentioned in the Second Schedule, therefore, its imposition would be ultra vires and ab initio illegal. Likewise, the taxation proposal had to be processed under Rules 3 to 9 of the Punjab Local Councils (Taxation) Rules, 1980, for which a procedure was clearly prescribed. Since the procedure laid therein was not followed by the respondents, therefore, it vitiated not only the taxation proposal but its subsequent imposition through the impugned notification.

4. To support the above proposition, reliance was placed on Qamar‑uz Zaman v. Zila Council, Bahawalpur through Chairman Zila Council (1990 MLD 1748 (Lahore), Messrs Unique Doubling Industries v. Union Council Kumahan and 4 others (1991 CLC Note 193 (Lahore), Messrs Nemat Flour Mills (Pvt.) Ltd. v. Government of Punjab and others (1991 CLC 1196 (Lahore), Mustahkam Cement v. Zila Council, Rawalpindi and 2 others (1992 CLC 1176 (Lahore), Flour Mills Association, Multan v. Province of Punjab through Secretary, Local Government, Lahore and 3 others (1993 MLD 779 (Lahore) and Zila Council, Sheikhupura through its Chairman v. M/s Mian Tyre & Rubber Co. (Pvt.) Ltd., Lahore Cantt. and others (PLD 1994 Supreme Court 212).

5. Learned counsel for the respondents contested the above propositions on the ground that the writ petitions were not competent against the impugned taxation because an appropriate and efficacious remedy was available to the petitioners to challenge the impugned notification in view of the provisions contained in sections 139, 153, 156 and 173 of the Ordinance (supra). Reliance was placed on Aslam Industries v. Punjab Government, etc. (1994 CLC 1003), Raja Muhammad Ramzan and others v. Union Council Thatta Khalil, District Rawalpindi (1994 MLD 930) and Jahangir Hussain v. Mayor, Municipal Corporation, Rawalpindi, etc. (1994 CLC 1610).

6. In rejoinder to the maintainability of the writ petitions, it was contended by the learned counsel for the petitioners that since in the instant case the tax was proposed at the direction of the Governemnt/Commissioner i.e. Controlling Authority, therefore, the latter being an appellate Authority, there was no chance of fair or impartial decision; that the Local Council had exercised the delegated authority of the appellate Court, therefore, in such cases, the appeal was not competent. Hence it could not be said that equally efficacious remedy was available to the petitioners under the law. As such, it was contended that the writ petitions were rightly instituted.

7. Learned counsel for the respondents thereafter, contended that section 137 read with section 139 of the Punjab Local Government Ordinance, 1979, clearly authorized the levy of commercialization fee under a policy which had been formulated by the Punjab Government. Since the fee was to be exacted under the aforesaid policy upon the direction of the competent Authority i.e. the Government, therefore, the taxation/commercialization fee proposal was in accordance with the provisions contained in section 139 of the Ordinance ibid. Hence there was no legislative or legal flaw in the imposition of the fee in question. It was further contended that the procedure laid down in the Punjab Local Councils (Taxation) Rules, 1980, was strictly followed as would be clear from the publication of the proposals in the press and also by processing it through the House upon the report of sub‑committee constituted for the purpose. It was after the compliance of the technical formalities that the notification in question was issued. Hence there was no illegality or irregularity in the levy of the commercialization fee.

8. In view of the above submissions, it is to be seen whether the respondents were competent to levy the impugned commercialization fee. In this regard, a reference to section 139 of the Punjab Local Government Ordinance, 1979, will clearly show that the Government could direct a Local Council to levy any tax/fee irrespective of the fact that there was no entry regarding such fee or tax in the Second Schedule. The provisions contained in section 139 (ibid) are independent of the provisions and the powers to be exercised under section 137 of the Ordinance. Under section 137 of the Ordinance (ibid), a Local Council may levy a tax or fee provided it is enumerated in the second Schedule. However, if any direction is given by the Government, then the case would fall under section 139 (supra). In the instant case, the commercialization fee was A directed to be imposed by the Government upon a commercialization policy framed for orderly management of commercialized buildings. 'in such situation, it cannot be successfully urged by the petitioners that the commercialization fee in question was without jurisdiction as it did not fall within the second Schedule of the Ordinance. Even otherwise, the Schedule itself says that under Item No. 12 in part‑3 that a fee for the erection or re‑erection of buildings can be charged by the Local Council. The definition to 'erect or re erect a builiding' is given in clause (xii) of subsection (1) of section 3 of the Ordinance. It includes the construction of a new building or its structural conversion. Hence broadly speaking, it would be covered by the Second l Schedule as contended by the respondents. The formalities regarding imposition of the commercialization fee have been complied with in accordance with the relevant rules as the proposal was firstly published and considered by a Sub committee before its approval and imposition through a notification in the official Gazette. The mere fact that there may be some technical non‑compliance. , which of course has not been obviated in this case, would not mar the merit of the proposal itself. I, therefore, came to an irresistible conclusion that the commercialization fee was rightly imposed by the respondents in accordance with the relevant provisions of law.

9. The question regarding maintainability of these writ petitions is of not paramount value because in the instant case, the fee was levied at the direction of the appellate Authority and as such, it could be rightly urged that the remedy in the shape of appeal was neither appropriate nor equally efficacious. In fact, the filing of appeal might have proved as an exercise in futility. The 'principle of exhaustion' before filing the Constitutional petition would not be applicable irt this case. Hence the writ petitions were rightly instituted.

10. Now coming to the merits of the case. In Writ Petition No.366 of 1995, the petitioner after submitted the site‑plan had made construction over the site without getting the plan sanctioned. It appears that Writ Petition No. 17 of 1995 was instituted against the respondents which was disposed of on 8‑1‑1995 with the direction that the respondents shall decide the petition for building plan pending with them. However, according to the respondents, the petitioner never turned up to pursue the aforesaid petition because he was called upon to pay the commercialization fee to which he always avoided. On the contrary, the petitioner allegedly encroached upon the Municipal land while raising his construction for which he was served a notice, whereupon, he removed such encroachment but kept his doors illegally towards the Municipal sewerage‑line and erected a passage without any authority. It was, therefore, urged that since the commercialization fee was not paid nor the building plan was got approved, therefore, the petitioner had no case for the issuance of writ in his favour particularly when he approached the Court with solid hands by trespassing over the adjoining land of the Municipal Committee while raising the construction in question. Though it is denied that any such encroachment was made by the petitioner, but the fact remains that the building plan was not got approved, though the petitioner was repeatedly issued a notice by the respondents to pay the commercialization fee and get the building plan approved. In such a situation, the petitioner in the aforesaid writ petition has no case on merit.

11. The fate of the other writ petition (W.P. No.964 of 1996) is not C different from the writ petition afore‑discussed. The petitioners had a building which consisted of some shops and a residential portion which was to be re‑constructed on the commercial patron for which they were asked to deposit the commercialization fee but they throughout resisted, although no such fee was demanded for the shops proposed by the petitioners. Hence, the petitioners are to be blamed for themselves as they failed to pay the commercialization fee which has been held to be a lawful change in view of the discussion made above. Hence, the petition under reference is also without any merit.

12. In view of my above discussion, both the writ petitions are dismissed.l~ Cost to follow the event. A.A./A‑140/L Petition dismissed.