P L D 1966 (W (PLP)

14. The levying of tax essentially became the duty of the Excise and Taxation Department under the Act of 1958.

15. The West Pakistan Urban Immovable Property Tax Rules, 1958, were promulgated by Notification No. Tax. III/2/1‑58 dated the 29th December 1958.

16. According to rule 3 (1), a District Excise and Taxation Officer was declared as the `assessing authority' in respect of rating areas within the jurisdiction and he has been given the following powers under rule 3 (2):‑ "(a) to affix or cause to be affixed to any property in the rating area any mark for purposes of identification and to enter into or upon any premises for this purpose between sunrise and sun set is, and to the extent, absolutely necessary; (b) to enter into or upon any property within the rating area, between sunrise and sunset, after giving twenty‑four hours' notice to the occupier, or if there be no occupier, to the owner of such property in order to‑ (i) decide whether the return made in respect thereof is correct; (ii) assess its annual value; (iii) ascertain if it is assessable to tax; (c) to examine any document, of whatever nature or kind and by whomsoever executed, relevant to the enquiry contemplated by clause (b) of this sub‑rule; (d) to exercise the powers of a Civil Court under the Code of Civil Procedure, in the matter of the summoning and examina tion of persons likely to be in possession of facts or of documents relevant to an enquiry under clauses (b) and (c) of this sub‑rule and in the matter of recording or receiving statements of the persons claiming exemption from tax."

17. The crux of the matter, therefore, is whether the Excise and Taxation Department can legitimately be described as a `local authority' as contemplated by proviso (a) to section 30 (1) of the Displaced Persons (Compensation and Rehabilitation) Act, 1958.

18. The expression `local authority' has not been defined in the Displaced Persons (Compensation and Rehabilitation) Act, 1958, and for its definition we have to fall back upon the General Clauses Act (No, X of 1897). 19. `Local authority as defined in the said Act means a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Govern ment with, the control or management of a municipal or local fund.

20. In the North‑West Frontier Province General Clauses Act (II of 1932), the expression `local .authority' has been defined as under:

" `Local authority' shall mean a municipal board, district board, or other authority legally entitled to, or entrusted by the Local Government with, the control, or management of a municipal or local fund."

21. The Excise and Taxation Department does not fall within the first part of the definition. It has now to be seen whether it is covered by the second part of the definition, viz. `other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund'.

22. The tax which is levied on assessment made by the Excise and Taxation Department on the annual rental value of urban immovable property is distinctly not a municipal fund. The further question of whether the tax: so realised falls under the definition of `local fund' needs consideration. 23. `Local fund' has been defined in the Compilation of the Treasury Rules (Volume I) and is reproduced below for the sake of convenience: (i) revenue a mnistered by bodies which by law or rule having the fore of law come under the control of the Govern ment, whether in regard to the proceedings generally, or to specific matters such as the sanctioning of their budgets, sanction to the creation or filling up of particular appointments, the encashment of leave, pension of similar rules; (ii) the revenues of any body which may be specially notified by the Government as such."

24. After carefully considering the matter, I am clear in my mind that the tax realised under the West Pakistan Urban Immov able Property Tax Act, 19 `8 does not fall under the definition of local fund.

25. The learned District Judge, Peshawar, as an Appellate Authority under the West Pakistan Urban Rent Restriction Ordinance VI of 1959 summed up his conclusions on the point (in S. A. O. No. 57 of 1963) as below:‑‑ "The foregoing provision of law makes it clear that when the West Pakistan Urban Immovable Property Tax is enforced in any particular area, it is the assessing authority provided therein which is to assess the property for the purposes of rent and taxation. The other bodies do not discharge this function. The idea behind the provision of charging rent according to the latest assessment of the local body was to permit the landlord to utilise his property subject to certain statutory restrictions at the prevailing market rate. This purpose cannot be nullified and set at naught merely because the authority mentioned for determining the prevailing value of the property is substituted by one un‑named. The ordinary rule of interpretation required that a beneficial construction is to be put and for this an extended meaning may be given to the provision of a statute. Maxwell on the Interpretation of Statutes on page 66 remarks as follows: `It is said to be the duty of the Judges to make such construc tion of a statute as shall suppress the mischief and advance the remedy. Even where the usual meaning of the language falls short of the whole subject of the Legislature, a more extended meaning may be attributed to the words, if they are fairly susceptible of it. The construction must not of course, be strained to include cases plainly omitted from the natural mean ing of the words.' On page 38 of the same book the following observations occur:‑

`Before adopting any proposed construction of a passage susceptible of more than one meaning, it is important to consi der the effects or consequences, which would result from it, for they often point out the real meaning of the words. There are certain objects which the Legislature is presumed not to intend, and a construction which would lead to any of them is therefore, to be avoided. It is not infrequently necessary, therefore, to limit the effect of the words contained in an enactment (especially general words), and sometimes to depart, not only from their primary and literal meaning, but also from the rules of gram matical construction in cases where it seems highly improbable that the words in their wide primary or grammatical meaning actually express the real intention of the Legislature. It is re garded as more reasonable to hold that the Legislature expressed its intention in a slovenly manner, then that a meaning should be given to them which could not have been intended.' In view of the foregoing discussion I hold that it was within the competence of the landlord to demand rent at the rate of the latest assessment of the Excise and Taxation Department."

26. I do not agree with the construction placed by the learned. Appellate Court as, in my opinion, the Excise and Taxation Department is not a `local authority', and to say that the tax assessed on urban immovable property by the Excise and Taxation Department after determination of its annual rental value a is covered by the definition of `local fund' is nothing short of doing violence to the language employed to define the expression.

27. A somewhat similar question arose in respect of Port Trust in the case reported as Official Assignee, Madras v. Trustees of Port Trust, Madras (A I R 1936 Mad. 789) and it was held in that case that the Port Trust is a `local authority'. The ratio decidendi in that case was summed up as follows:‑

"It is contended that the Port Trust is not entrusted by the Government with the control or management of Municipal or Local Fund and is not therefore a `local authority' within the meaning of that subsection and that no fund has been consti tuted under the Port Trust Act of 1905 such as that in section 139, Madras City Municipal Act. Mockett, J. negatived this con tention because provision is made in the Port Trust Act for the imposition and recovery of rates and that it is from these rates that the Port Trust income is derived and had no doubt that its collection by the Port Commissioners constitutes a local fund within the meaning of section 3 (28), General Clauses Act. In our view it is not necessary to employ the test of whether the Port Trust is entrusted with the control or management of a local fund because Mr. K. S. Krishnaswami Iyengar has put an interpretation upon that subsection with which we agree. It is that the words `legally entitled to or entrusted by the Govern ment with the control or management of a Municipal or Local fund' qualify the words immediately preceding them, namely, 'or other authority' and do not relate to a Municipal Committee, District Board or body of Port Commissioners. We think that that is clearly correct. It is obvious that a Municipal Committee is a `local authority' and equally so a District Board, and in our view so also is a body of Port Commissioners; and it is conceded that the Port Trust comes within this descrip tion; and it does not seem to us to be intended or reasonable that they should be a `local authority' only when they control or are entrusted by the Government with the control and management of a Municipal or Local fund, but it is otherwise in the case of other authorities not definitely specified who can only bring themselves within that definition if the latter part of the subsection can be applied to them; and moreover the word `or' and not `and' other authority is used. The Port Trust there fore, is a local authority."

28. In view of the general importance of the questions, I feel that their decision one way or the other will have for reaching effects on the rights of persons who have acquired immovable evacuee property under the Displaced Persons (Compensation and Rehabilitation) Act, 1958.

29. I am of the view that the main question and the question incidental thereto raised in these appeals should be decided by a Full Bench. The following question are formulated for reference to a larger Bench:‑ (1) Whether the Excise and Taxation Department is a `local authority' within the meaning of proviso (a) to section 30 (1) of the Displaced Persons (Compensation and Rehabilitation) Act, 1958. (2) Whether in the circumstances a transferee of evacuee property holding a Provisional Transfer Order could legally demand rent at the rate of the latest assessment by the Excise and Taxation Department from the occupier of the property who became a statutory tenant under the transferee or at the rate which the tenant was paying to the Custodian before the transfer of property. (3) Whether the failure to pay or deposit rent according to the latest assessment of the Excise and Taxation Department by the tenant would render him liable to ejectment or his defence to be struck off by the Rent-Controller under section 13 (6) of the West Pakistan Urban Rent Restriction Ordinance VI of 1959. 3o. The files of these cases should be laid before the Senior Judge nominating a larger Bench for deciding the formulated by me above. K.B.A Case referred to larger Bench.