1991 PLP 354 (CLC)

(e) Punjab Local Government Ordinance (VI of 1979)

S. 153

Constitution of Pakistan (1973), Art. 199

Constitutional jurisdiction, exercise of

Government's power to exercise general supervision on and control over Local Councils being not an adequate and efficacious remedy non-availing of such remedy by petitioner, could not bar Constitutional remedy for redress of. grievance over improper levying of tax. Ch: Mushtaq Ahmad Khan for Petitioner. Muhammad Nawaz Bhatti for Respondents Nos.l and

2. Nemo for Respondents Nos. 3 to

5. Date of hearing: 30th October, 1990. This judgment shall dispose of Writ Petitions Nos. 6252/90,6552/90, 7062/90 and 7172 of 1990 in which common questions of law and facts arise.

2. The petitioners in all these petitions are carrying on their businesses in the local area falling within the jurisdiction of Union Council Dulu Khurd, Tehsil Lahore Cantt. District Lahore (respondent No.1). The petitioners have impugned the notification, dated 16th August, 1990, whereby the respondent No.1 in the exercise of powers conferred upon it by section 137 of the Punjab Local Government Ordinance, 1979 read with the Second Schedule has imposed a tax/octroi on the goods imported into the local area. The main plank of attack by the petitioners is the tax levied in a manner which is violative of the Act and the Rules on the subject. The respondents, on the other hand, have contended that the impugned notification has been issued strictly-in accordance with law and is not liable to be questioned before this Court.

3. In order to appreciate the respective contentions of the parties, it is necessary to make reference to the various provisions governing the subject. Section 137 of the Punjab Local Government Ordinance, 1979 authorises a Local Council, subject to the provisions of any other law, to levy all or any of the taxes enumerated in the Second Schedule. Section 138 of the Ordinance ordains that all taxes levied by a local council shall be notified and shall, unless otherwise directed A by the Government, be subject to previous publication. Section 144 of the Local Government Ordinance directs that all taxes and other charges levied by local council shall be imposed, assessed, leased, compounded, administered and regulated in such manner as may be provided by the Rules.

4. The Governor of Punjab in the exercise of powers conferred upon him by section 144 read with section 167 of the Punjab Local Government Ordinance, 1979 (Punjab Ordinance VI of 1979) has framed the Punjab Local Councils (Taxation) Rules, 1980 which prescribe the procedure to be followed by the Local Council while imposing any tax which it is authorised by the Ordinance to levy. According to rule 3 of these Rules, while framing the annual budget or the revised budget of the Local Council, the Chairman of the Local Council has to review the financial position of the Local Council and if in his opinion, the financial position calls for any change in the tax structure, he has to draw up a taxation proposal which is to be incorporated in the Appendix to the budget. Sub- rule (2) requires that there shall be a separate taxation proposal for each tax.' After the annual or revised budget has been sanctioned in accordance with section 130 of the Ordinance, the Chairman is required by rule 4 to issue a public notice in respect of each taxation proposal which has inter alia to specify, the main features of the proposed tax, the class of persons and description of property or both, affected thereby, the amount or rate of tax to be imposed, increased, reduced or modified; the justification for taxation proposal. Similarly, the Chairman has to publish a taxation programme specifying the date which shall be not less than 30 days from the publication of the preliminary taxation proposal, by which the objections. and suggestions to preliminary taxation proposal can be filed by the inhabitants. Under sub-rule (5), the Local Council has to appoint a Sub-Committee consisting of the Chairman and such other members as may be specified to examine the objections and suggestions received. The Sub Committee after hearing the suggestions in public on the close of the hearing is required to draw up and to send to the Local Council by the. date specified for the purpose in the taxation programme, a detailed report under sub-rule (4) of rule

5. Thereafter, the Local Council has to consider the report of the Sub- Committee in a special meeting convened for this purpose on the date mentioned in the taxation programme as required by rule 4 (2) (b). If the Chairman accepts the report of the Sub-Committee he has to modify the taxation proposal accordingly but if he does not agree with the recommendation of the Sub Committee he has to place on record the grounds for disagreement. The taxation I proposals may either be accepted or rejected, as case may be, by the majority vote in the special meeting of the Council. If the taxation proposals are sanctioned by the Local Council, the Notification in the form of a public notice must be published in the official Gazette and the taxation proposals sanctioned by the Local Council come into force on or from the such date as may be specified in the notification.

5. Though it was specifically averred in these petitions that the octroi duty has been levied by the respondent without following the provision of section 137 of the Ordinance as well as Punjab Local Councils (Taxation) Rules, 1980, in the report submitted by the respondents the various steps taken by it before levying the tax have unfortunately not been detailed. It has, however, been averred that the tax has been levied strictly in accordance with law and rules framed there under. Respondent No.2 was, consequently, directed to produce the relevant record before this Court which has been-perused with the assistance of the learned counsel for the parties.

6. Unfortunately no proper record has been maintained by respondent No.2 in this connection. The only documents produced before this Court were a public notice and the resolution passed by the Local Council which recite that despite notice which was given sufficient publication as required by the Rules, no objections have been submitted by any one and, therefore, the taxation proposal was approved. The petitioners on the other hand, have contended that no notice was ever published.

7. After hearing the learned counsel for the parties and perusing the available record, it becomes evident that the respondents have failed to show that the public notice as required by rule 4 was published in the manner provided by law. Though there is a photostat of the notice available on the file of the Union Council but there is no report by any of the official that the notice has been published in the requisite manner. It may, at this stage, be mentioned that according to section 174 (4) of the Act, a notice intended for the public in general shall be deemed to have been sufficiently served if a copy thereof has been affixed on the notice board fixed by the Local Council at a conspicuous place of its office premises or published in a local newspaper. There is neither any publication in the newspaper nor -any indication in the record that the notice was affixed on the notice board of the Council. Reference may also be made to West Pakistan Municipal Committees (Issue of notice) Model Bye Laws, 1960, bye-law 6 whereof provides that a person by whom and under whose supervision a public notice is affixed on a notice board shall certify that the notice has been duly affixed and the Committee shall ensure that the notice remains on the notice board for a sufficient time. Unfortunately, even the name of the person who has stated to have affixed the notice on the notice Board is not forthcoming on the record.'

8. Another important fact to be noticed is that the notice on which reliance has been placed by the respondents does not conform to the provision of sub-rule (4) of the Punjab Local Councils (Taxation) Rules, 1980 as neither any date nor the rate on which the tax is sought to be levied have been specified therein. There is as such manifest violation of the rules.

9. There can be no cavil that if law requires certain formalities to be fulfilled before imposing any tax, the provisions are deemed to be mandatory with the result that non-compliance thereof renders the entire proceedings to be void. The Supreme Court of Pakistan in the case of The Sukkur Municipal Committee and others v. Muzaffarud Din and another (P L D 1967 $C 299) while construing section 75 of the Sindh Municipal Boroughs Act, 1925 was pleased to observe that the main object of this section appears to be that the rate-payers must be given adequate notice with sufficient time in order to enable them to object to the proposed tax or duty. If the Legislature intended that such an opportunity must be provided to the tax-payers the respondents cannot of its own neglect be allowed to take away this right. In Kotri Association of Trade & Industry v. Government of Sindh and another (1982 C L C 1252) the, Sindh High Court held that if citizens are subjected to a tax then the general principle of law is that all the prescribed formalities required to be fulfilled must be fulfilled and in case there is a default. or failure to comply with the legal formalities the benefit must go to the citizens. The above view was reiterated by the same Court in Burshane (Pakistan) Ltd. v. Cantonment Executive Officer, Cantonment Board of Korangi Creek, Karachi (P L D 1983 Kar. 517). Another principle which must be kept in mind while dealing in such like matters is that there is no equity in favour of a tax which is compulsory exaction of money from the public and, therefore, any disregard of the procedure prescribed for levying the tax cannot but be looked at with disfavoiur.

10. The learned counsel for the respondents raised an objection as to the maintainability of these petitions on the ground that the petitioners have not availed of the alternate remedy available to them of approaching the Government through a representation in terms of section 153 of the Local Government Ordinance, 1979. This contention of the learned counsel is without any force. Section 153 empowers the Government to exercise general supervision and control over the local councils but this remedy can neither be said to be adequate nor efficacious. For the foregoing reasons, all these petitions are accepted and the impugned notification dated 16-8-1990 imposing the tax upon the petitioners is declared to be without lawful authority and of no legal effect. The parties are left to bear their own costs. A.A./G-389/L Petitions accepted.