P L D 1956 Federal Court 220 (PLP)

SHAHABUDDIN, J.‑‑‑This is an appeal under section 109 (c) of the Civil P. C. from the judgment of the High Court of Lahore in a Letters Patent Appeal, by which the decision of a Single Judge of that Court was set aside. The short point in the appeal is whether under the Punjab Urban Immovable Property Tax Act, 1940, a supplementary valuation list can be drawn up for a rating area in respect of a class of properties, which had been omitted to be valued by the assessing authority while preparing a valuation list for the property of that area or the properties, which have not been so valued, cannot be valued till it is time for the preparation of a fresh valuation list (i.e.) after the period, during which a valuation once made, remains in force. Facts giving rise to this question were these : Mr. H. J. B. Taylor, who was appointed by the Government of West Punjab as an assessing authority under section 7 of the Act for preparing a valuation list of buildings and lands in the City of Lahore, prepared a list of valuation only for the build ings and not the agricultural lands, though in the notice he issued on 1st September 1941 it was stated that draft list in respect of all buildings and lands was complete and could be inspected. It is not known why Mr. Taylor' omitted to value the agricultural lands in the city when under the Act there was no discretion given to him in the matter. Apparently it was an omission due to inadvertence. However, the Provin cial Government appointed another assessing authority. Mr. Shah Nawaz Khan, and he after valuing the agricultural lands in the city of Lahore issued a notice on 24th February 1947 (sic) stating that a draft valuation list of agricultural land situate in Lahore Municipal limits had been completed. In pursuance of this list, demand for the tax and arrears thereof was made from the present appellants in respect of the agricultural land they owned in the city ; sad they thereupon filed a suit against the Provincial Government to the Court of Administrative Subordinate Judge, Lahore for a declaration that the notice of demand was illegal, invalid ultra vires and for a perpetual injunction restraining the defendant Government and its several officers from demanding or recovering the said tax. The suit was decreed and the appeal filed by the Pro vincial Government in the Court of Subordinate Judge, First Class, Lahore, was dismissed. Second appeal filed by the Provincial Government was also dismissed, but in the Letters Patent Appeal from the judgment in the second appeal the Provincial Government succeeded. To appreciate the respective contentions raised in this case it is necessary to first refer to the relevant provisions of the Act. Under section 3 all property in the urban area, buildings as well as lands, is liable to taxation. That provision says that "there shall be charged, levied and paid an annual tax on buildings and lands situated in the rating area shown in the Schedule to this Act at such rate not exceeding twenty per centum of the annual value of such buildings and lands, as the Provincial Government may, by. Notification in the Official Gazette, direct in respect of each rating area." Next section mentions those lands and buildings which are exempt from` tax, while section 5 lays down as to how the annual value should be ascertained. Under section 6 an assessing authority shall' be appointed. It is clear from section 3 as well as the other provisions of the Act that the assessing authority had no discretion in the matter. He has to prepare the valuation list of the items of property liable to be taxed and the provision dealing with the preparation of such a list is section 7 ; sub section (1), of which is as follows :‑ "A valuation list shall be made by the prescribed authority P in accordance with the rules framed under this Act for every ‑rating area so as to come into force either on the first day of April or the first day of October, and thereafter new valua tion lists shall be made from time to true so that the interval between the dates on which one valuation list and the next succeeding valuation list respectively come into force shall be a period of five years." There is a proviso to the effect that the Provincial Govern ment may extend or reduce by six months or one year the interval which would otherwise elapse between the coming into force of any two successive valuation list for any rating area and that when a valuation list is lost or destroyed by circumstances beyond control the Government may direct the preparation of a new list and order recovery of pending tax to be made on the basis either of the last preceding list or of the new lists prepared. The proviso also empowers the Provincial Government to divide any rating area into 'parts for the pur poses of a new valuation list. Subsection (2) of this section states that subject to the provisions of any such order as referred to in the preceding part of the section every valuation list shall come into force on the first day of April or the first day of October, as the case may be, next following the date on which it is finally approved by the assessing authority and shall "subject to the provisions of this Act and the rules made thereunder (including the provisions with respect to the alteration of and the making of additions to the valuation list), remain in force until it is superseded by a new valuation list." The next section deals the publication of the draft valuation list and it gives any person aggrieved by any entry in the draft valuation list, or by the insertion therein or omission therefrom of any matter, or otherwise the right to judge an objection with the assessing authority. Then follows section 9, which deals with the amendment of the current valuation list. It says that: "subject to such rules, if any, as the Provincial Govern ment may think fit to make in this behalf, the assessing authority may at any time make such amendments in a valuation list as appear to it necessary in order to bring the list into accord with existing circumstances, and in particular way‑ (a) correct any clerical or arithmetical error in the list ; (b) correct any erroneous insertions or omissions or : any mis-descriptions ; (c) make such additions to or corrections in the list as appear to the authority to be necessary by reason of (i) a new building being erected after the completion of the valuation list ; (ii) a building included in the valuation list being destroyed or substantially damaged or altered since it, value was last previously determined ; (iii) any changes in the ownership of any building or land" The proviso to this section is that not less than fourteen days before making under the foregoing provisions any amendment in the valuation list other than those covered by clauses (a) and (b), the assessing authority shall send notice of the proposed amend ment to the owner of the building or land. The view taken of sections 7 and 9 by the trial Court, the Court of first appeal as well as in the second appeal in the High Court was that under section 7 only one valuation list could be drawn up for a particular rating area and that unless the period fixed therein expired another list could not be made even in respect of properties omitted inadvertently and that section 9 also would not apply to such a case. In the High Court in the second appeal it was argued that the words in section 9 "in order to bring the list in accord with the existing circumstances" could cover the, preparation of an additional list such as the one under consideration. Slut this contention was rejected on the ground that the intention of that part of section appeared to be to meet altered conditions such as might arise from the addition of an entire estate to the limits of the Corporation of Lahore. In the Letters Patent Appeal a different view was taken of these words in section

9. It was held that these words would include the case which has now arisen and that to come to that conclusion t was not necessary to strain the language of the section. The liability to pay tax being clear the learned Judges took the view that it was their duty to enforce this liability by so interpreting this section which relates only to the procedure as to cover this case, if by any reasonable construction it can be so interpreted and that the construction put by the assessee creates a caucus omissus by limiting the operation of the words without there being any words of limitation in the provision. It was also observed that the object of section 7 in authorising the Government to get a list prepared was that on the rental value of buildings and lands the owners thereof should be taxed, and as the grant of a .power implies all powers essential to the effective exercise of that power, section 7 enables the Provincial Government to do all that is necessary for carrying out the purpose in view namely the assessment of the entire assessable property in the rating area. The main argument of the learned Advocate of the appel lants before' us wax that though the liability to be taxed was clear from section 3.of the Act, the assessment could be made and tax levied only in the manner prescribed in the Act, and that as section 7 requires only one valuation list at a time and section 9 does not speak of a supplemental list, the view taken by the High Court in the Second Appeal should have prevailed. It was pointed out that the words in section 9 to the effect that amendments could be made to bring the list in accord with existing circumstances relate only to those amendments that are necessitated by altered circumstances, and that if it is taken that these words cover a supplemental list, treating the case as one of omission, then clause (b) would apply, in which case under the proviso the omission can be rectified without notice being issued to the person concerned, But as contended by the learned Advocate‑General there is no reason to restrict the meaning of the words "existing circumstances." Clauses (a) and (b) of section 9, which are illustrations of the amendments that can be made under that section, refer to corrections of clerical and arithmetical errors, erroneous insertions and omissions; and such amendments cannot be sold to bring the list In accord with altered circumstances. On the other hand, those are cases where amend ments are made to bring the list in accord with the actual facts. Clause (a) on the other hams referred to additions due to altered circumstances. Prom this, it follows that bringing the list in accord with the existing circumstances moans recti fying it do that It stay represent the actual state of affairs. Now the list drawn up by Mr. Taylor do the present case pur ported to be a list of valuation of buildings and lends but did not contain the valuation of the lands in the suit, what are admittedly liable to be taxed. The list cannot, therefore, be said to be in accord with the existing circumnutates, as by itself it indicates that there are no agricultural lands liable to tax. In the city of Lahore, while the fact is otherwise. The General words In section 9, namely, amendments. In a valuation list as appear to the assessing authority necessary in order to bring it in accord with the existing circumstances can, therefore, be taken to empower the assessing authority to amend the list already drawn up by adding to It a supplemental list, so that the lands, which are liable to be taxed, may also stand valued. This would, no doubt be more of an addition than a correction of an omission, but clause (c), which refers to additions due to altered circumstances, does not give an exhaustive list of additions that cap be made under section

9. Clauses (a) to (c) particularize dray some of the amendments that can be trade under the general words in section 9 already noted. It is true that it is also possible tot take tire view that the amendments that can be made under those general words cab be only of the nature indicated In those clauses but when more than one Interpretation impossible, that construction should be preferred which carries intro effect the object of the statute. 'The object of this enactment was to raise additional revenue. This is clear front the Statement of Objects arid Reasons published in the Punjab Gazette. There can be no doubt that lands within a Municipality are liable to be taxed, That being so, it could not have been the intention that a mere omission to value lands by an assessing autho rity, whatever the reason, should deprive the Provincial Government of the tax on the lands for a period of five years and that if a similar omission occurs after that period the Government should wait for another period of five years and so on. The Act in question is no doubt a Taxing Act awe unless the liability to be taxed is clear the interpretation should be in favour of the subject, But no question of interpretation arises regarding section 3, which, in unambiguous terms, determines the liability of the lands to be taxed. The provisions that have to be interpreted are those relating, to the machinery of the assessment and in repeat of such provisions of a taxing Act the Privy Council in Income‑tax Commissioner v. Mahabi Ramjidas (A I R 1940 P C ), observed that that construction should be preferred which makes the machinery workable The safeguard provided for by the Act is that the same pro perty should not be valued over again before the liked period elapses. Publication of a supplemental list of properties not valued at all does not take away that safeguard. Therefore, the interpretation put on the section by the Letters Patent, Bench of the High Court seems to be correct. The proviso to section 9, under which notice is not necessary in respect of corrections coming under clauses (a) and (b), cannot be said to apply to, additions made to a list to bring it in accord with existing circumstances, which, as indicated above, cover also instances other than those mentioned in clause (c). As regards section 7, it no' doubt refers to "a valuation list" and does not in terms authorise the preparation of a sup plemental list. But the valuation list, the preparation of which is required under this provision, is a list. made in accordance with the rules framed under the Act; and under rule 3 (a) an assessing authority shall prepare a property register in form A and enter therein the necessary particulars separately for each unit of property in the rating area. Rule 4 (b) is that each unit 'of property situated within the rating area shall be numbered with reference to the sub‑division or mohalla and street and under rule 4 (c) the name of the owner or occupier' of any property shall be ascertained and entered in form A, wherein there is a column for lands as well. The list prepared by Mr. Taylor in this case cannot, therefore, be said to be a list prepared in accordance with the rules, as it is common ground that there are within the city of Lahore agricultural lands that are liable to be taxed and these have not been valued in that list. It was, therefore, necessary to have the agricultural land also valued and this was done by the preparation of a supple a mental list. There being no prohibition in section 7 with regard to the preparation of such a list and the list contem plated in that provision being a list made in accordance with the rules, it cannot be said that the list prepared in 1942 with regard to agricultural lands is not a valid list on which assessment could be levied. Here again the question of interpretation of section 7 arises and on the principle of the above mentioned Privy Council decision this provision can be construed as covering the preparation of a supplemental list also. As for the effect that can be given to Mr. Taylor s list, which came into force in October 1941, while the other list came into force in April 1942, there is section 21 of the Act, which does not make Mr. Taylor's list invalid, because of the omissions in it of the valuation of agricultural lands. We, therefore, consider that the decision of the High Court in the Letters Patent Appeal was correct and we accordingly dismiss this appeal with costs. A. H. Appeal dismissed.