2009 PLP 1184 (MLD)

KHAWAJA FAROOQ SAEED, J.

This writ petition has been filed to challenge the demand notice, dated 19-3-2009 sent by the property tax department.

2. The brief facts of the case are that the petitioner obtained the demised premises on rent decades ago @ Rs.100 per month. At that time the property was not constructed and there were only one or two dilapidated rooms thereon. He, therefore, raised constructed on the said plot and started an' industry. Earlier when the property tax was within reasonable limit, the owner kept on paying the same. However, now for the reason of full-fledged construction the same has increased many fold.

3. The petitioner firstly challenged the said notice by filing an application before the Director General Excise and Taxation, Lahore, which has been rejected and secondly before, the Civil Judge in his capacity as Rent Controller.

4. The claim remains that under the provision of the Property Tax Act it is only the owner of the property who is liable to pay the property tax, while, the petitioner is a tenant.

5. The respondent case on the other hand is that section 14 provides for the payment of the property tax by the tenant and not by the owner.

6. It is a case of total misconception. Section 14 does not create a charge. It only comes in substitute where the original person/landlord fails to discharge his obligation. The tenant, therefore, is required to pay the said property tax, but that also to the extent of its rent and nothing beyond. However, the department is not debarred to attach the property obviously after fulfilment of the legal requirements for the purpose of recovery of its taxes against the landlord even if it results in disclosure of the business of the tenant.

7. In fact it is section 3 of the Property Tax Act that creates a charge on owner of building or the land. The relevant provision is section 3 which is reproduced as under: "(3) Levy of Tax.--(1) Government may by notification specify urban areas where tax shall be levied under this Act: Provided that one urban area may be divided into two or more rating areas or several urban areas may be grouped as one rating area. (2) There shall be charge, levied and paid a tax on the annual value of buildings and lands in a rating area at the rate of 10 percent of such annual value: Provided that where a building is occupied (for residential purpose) by the owner himself the tax shall be levied at the said rate of one half of the annual value of such building if the owner or any member of his family does not own any other property in that rating area: Provided further that Government may by notification, remit for reasons to be recorded in whole or in part, the payment of the tax by any class of persons in respect of any category of property. Explanation.

The annual value for the purposes of this section shall be the aggregate annual value of all buildings and lands owned by the same person in a rating area."

8. From the above is clear that under section 3(2) the charge of property tax is on `buildings and lands'. The very use of the two words separately makes it clear that the charge is conjunctively as well as disjunctively. There was obviously no bar on the legislature to use some other words like `immovable' property or `assets' in place of the words buildings and lands. Thus on one hand building and land can be charged to property tax jointly while if it is owned by different persons it can be charged separately in the hands of building or land. The charge in this Taxing Statute, therefore, being not on a person but on building and land the responsibility of payment of tax shall be on owner of building to the extent of structure and on the owner of land to the extent of said land.

9. The notice issued by the department, dated 19-3-2009 has been challenged before the Director General Excise and Taxation and is pending, hence, the alternate remedy has already been invoked by the petitioner.

10. Furthermore, the petitioner had earlier approached Rent Controller for seeking direction to deposit a sum of Rs. 50,000 in the account of the present petitioner/tenant which he paid to the authorities of Property Tax department to get the premises de-attached. Learned Rent Controller declined the same and the reasons inter alia include : -- (i) that the petitioner is paying rent @ Rs.14,520 per annum while the tax has been imposed @ Rs.6103 per month meaning thereby Rs.73,238 per annum; (ii) that the building has been raised by the petitioner on the plot, hence, it is he who is enjoying the rights over the said building in terms of property tax. This has not further been challenged anywhere else.

11. The upshot of the above discussion, therefore, is very clear. The petitioner having already availed the alternate remedy in terms of filing application before Director General Excise and Taxation should not have filed this petition. The application of the petitioner before Director General Excise and Taxation, therefore, being pending he is directed to approach him for an earlier redressal of the grievance.

12. Dismissed. M.H./M-446/L Petition dismissed.