P L D 1953 Lahore 433 (PLP)

B. Z. KAIKAUS, J.‑K--han Bahadur Amir‑ud‑Din and others filed a suit against the Punjab Government impeaching the vali dity of the tax which they had been ordered to pay under the Punjab Urban Immovable Property Tax Act. The learned Sub ordinate Judge, who tried the suit, decreed the claim. The learned Senior Subordinate Judge, on appeal, affirmed the decision and a second appeal has been dismissed by a learned Single Judge of this Court. The Punjab Government have filed this Letters Patent Appeal. The question involved is one of interpretation of the Punjab Urban Immovable Property Tax Act and arises in the circum stances that follow. Some of the relevant sections of the said Act, which are needed for‑an appreciation of the question, are quoted below:‑ 3. (1) 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 such rating area. * * * * * * * * (4) The tax shall be, paid by the owner of the buildings and lands in respect of which it has been levied. 7. (1) A valuation list shall be made by the prescribed authority m 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 valu ation lists shall be made from time to time 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: Provided that the Provincial Government by order‑ (a) reduce by a period of one year or extend by a period of three years the interval which would otherwise elapse between the coming into force of any two successive valuation lists for any rating area, or, where a valuation list has been lost or destroyed by operation of circumstances beyond control, cancel the list, direct the preparation of a new list and order recovery of pending tax to be made on the basis either of the last preceding valuation list of the new list prepared under this proviso; and (b) divide any rating area into parts for the purpose of a new valuation list and determine the years in which the next follow ing valuation list for each of such parts respectively shall be made and come into force. (2) Subject to the provisions of any such order as aforesaid, 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 asses sing authority and shall, subject to the provisions of the 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.

9. 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 may‑ (a) correct any clerical or arithmetical error in the list; (b) correct any erroneous insertions or omissions or any in‑ descriptions; (e) make such additions to or corrections in the list as ap pear 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 its value was last previously determined; (iii) any change in the ownership of any building or land: Provided that not less than fourteen days before making under the foregoing provisions any amendment in the valuation list for the time being in force other than the correction of a clerical or arithmetical error, or the correction of an erroneous inser tion, omission or misdescription, the assessing authority shall send notice of the proposed amendment to the owner of the building or land and shall also consider any objection thereto which may be made by him." By section 3 a tax is to be charged on all buildings and lands situate in any rating area and the Provincial Government has authority to impose any rate with the limitation that it cannot exceed 12 per centum of the annual value. To determine the annual value, the Provincial Government is authorised, by section 7, to get a valuation list prepared by the 'prescribed authority' which means an authority prescribed in the rules framed by the Provincial Government under section 24, which em powers the Provincial Government to frame rules for carrying out the purposes of the Act. Section 21 makes lists valid in spite of failures and omissions and section 22 prevents Civil Courts from taking cognizance of the manner in which the Pro vincial Government or its officers exercise their powers. The Corporation of the City of Lahore is one of the rating areas to which the Act applies. Some time in 1941, Mr. J. B. Taylor, I. C. S., was appointed by the Provincial Government as assessing authority under section 7 of the Act and he prepared a valuation list which came into operation on the first day of October 1941 He did not include, however, in the list, for reasons it is needless to go into, the agricultural lands situate in the Corporation area. The Provincial Government soon came to know of the mistake and on 12th of January 1942, appointed Khan Bahadur Sheikh Shah Nawaz as an assessing authority for the Lahore Corporation area and directed him to prepare a valuation list of the agricultural lands situate within that area. Khan Bahadur Sheikh Shah Nawaz proceeded in accordance with section

7. He got a draft list of agricultural land prepared, gave a public notice of such preparation and after hearing objections prepared a list which came into operation on the first day of April 1942. The plaintiffs in the case out of which this Letters Patent Appeal arises are some of the persons who were assessed to tax on account of the new list. They filed the present suit contesting their liability to pay the amount of tax assessed on the ground that the new list prepared was ultra vires, as section 7 did not permit the preparation of a second list till expiration of five years from the preparation of the first, The defendant, viz., the Provincial Government pleaded that the list was legal and valid and that the Civil Courts had no jurisdiction in the matter. The trial Court as well as the learned Senior Subordinate Judge found that the list offended against section

7. Before the learned Single Judge both sections 7 and 9 were relied upon by the Punjab Government. It was argued that section 7 would bar only a list that superseded the first one and not an additional or supplementary list. It was argued too that this was in fact only an amendment to the list already prepared and was therefore, covered by section

9. It will be observed that in section 9 there is a general provision granting power to amend the list in order to bring it "into accord with existing circum stances" and three examples of the exercise of that power are also mentioned. For the defendant reliance was placed not on any of the examples contained in (a), (b) and (c) but on the general provision contained in the section. The learned Single Judge rejected the argument based on section 7 on the ground that though the section did not itself prohibit the new list which only supplemented and did not `supersede' the old list, the new list must, in any case, be regarded as an amendment to the first list and authority for making an amendment must be found within section

9. The argument based on section 9 the learned Single Judge rejected on the ground that the words `to bring into accord with existing circumstances' could refer only to a change in circumstances. He was of opinion that if for instance there was an addition to the area included in the Corporation this provision would be applicable. The question before us put broadly is this. If by inadvertence or deliberate omission, whether bona fide or mala fide, lands or buildings are not entered in a valuation list, is the Provin cial Government debarred for the period mentioned in section 7 from realizing the tax due on those buildings or lands? A very large part of the rating area may have remained unlisted, in fact the argument will apply even if a list containing one building or land has been prepared. Is the Government rendered powerless to remedy the defect? We will explain what we regard as the correct approach in cases like the present. The provisions of a taxing Act maybe broadly divided into two categories those that determine the) liability to be taxed and those that provide the machinery for it assessment and realization. With respect to the first category the rule of interpretation is that the charge must be imposed by clear and unambiguous language and in cases of doubt a construction beneficial to the subject should be adopted. With respect to the second category, however, the rule of construction is entirely different. If the liability to be taxed be clear the machinery sections ought to be interpreted so as to enable the Crown to realize the taxi unless there be compelling reasons to the contrary. In Drummonds v. Collins (6 T C 525) Lord Parker of Waddington, dealing with a machinery section said, "This section is a collecting section and not a taxing section and there is no reason in principle why it should not receive a liberal interpretation." In Commissioner of Income‑tax, Bengal v. Messrs Mahaliram Ramjidas (A I R 1933 Mad. 748) their Lord ships were dealing with section 34 of the Income Tax Act, which relates to a case where income had escaped assessment and they said, "Section 34, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of assessment. In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable, ut res valeat potius quam pereat". In M. S. Gapalaswami V. Chettiar v. Secretary of State (A I R 1933 Mad. 748) there was an apparent difficulty in the realization of the tax if the relevant section was literally construed. Curgenven, J. said, "I think that the liability to duty being clear, it would be improper to conclude that no means exist of realizing it unless the language of the Act compelled such a view". Even if a case arose which in fact was not in the contemplation of Legislature, if the words used in the Act be capable of covering the case the provision should be so interpreted as to include that case. For this we may refer to Scott v. Legg (1876 2 Ex. D 39) relied upon by Curgenven, J, in the above‑mentioned case where Cleasby B. said, "It seldom happens that the framer of an Act of Parliament or the Legislature has in contemplation all the cases which are likely to arise, and the language, therefore, seldom fits every possible case. Whenever the case is clearly within the mischief, the words must be read so as to cover the case, if by any reasonable construction they can be read so as to cover it, though the words may point more exactly to another case; this must be done rather than make such a case causus omissus under the statute". The object of a taxing statute must always be to provide a machinery for realization of tax in all cases in which a liability in fact exists and to say that though liability exists the means of enforcing the liability are inadequate is to create a causus omissus which ought; as far as it is reason ably possible, be avoided. With these preliminary observations we turn now to the question involved, and we will consider, in the first place, the interpretation placed upon section

9. We regret our inability to accept the interpretation that section 9 applies only to a change in circumstances. It does not seem to have been argued before the learned Single Judge that clauses (a) and (b) are also examples of bringing into accord with existing circumstances and that (a) and (b) are not cases of changed circumstances. That (a) and (b) are only particular cases falling B within the general power granted by the words `to bring into accord with existing circumstances' is made clear by the use of the words in particular'. Without reference, therefore, to any other principle and by merely reading the section as a whole one is forced to the conclusion that the operation of the words quoted above cannot be limited to a change in circumstances. We have, asked Mr. Yaqub Ali Khan, who appears for the respondents, whether in the face of (a) and (b) he contends that the words 'bring into accord with existing circumstances' refer only to a change in circumstances. While he does not go the whole length with the learned Single Judge, for he does not accept that in case of addition to the Corporation area section 9 could .be availed of, he does contend that the words refer only to altered circumstances. The way he supports his contention is this. He argues that the words `to bring into accord with existing circumstances' are gram matically incapable of applying to any but altered circumstances and for the purpose of getting rid of the effect, of (a) and (b) and for reaching a conclusion in his favour he asks to take the following steps. He says: first interpret the words `to bring into accord with existing circumstances' without reference to (a) and (b) and reach the conclusion that the words are only capable of referring to change in circumstances:‑ then turn to (a) and (b) and find that there is an inconsistency between the two parts of the section: then from this inconsistency infer that the words in particular are not used in their ordinary sense and that really (a) and (b) are not instances of the general power granted by the section but refer to an independent power. We find ourselves unable to perform this very difficult task. We are unable to accede to the contention that the words used are not grammatically capable of applying to any but changed circumstances. While it is possible to argue that the object of the Legislature in enacting section 9 was not to meet a case like the present; a matter with which we shall deal later, we do not think an argument, that the words in themselves necessarily imply a reference only to changed circumstances, is even plausible. Existing circumstances, according to Mr. Yaqub Ali Khan, mean only circumstances that did not exist when the list was prepared. We do' not doubt that these words refer to circumstances that existed at the time of amendment irrespective of whether they did or did not exist when the list was first prepared. While Mr. Yaqub Ali Khan was arguing this point we asked him to state what words the Legislature ought to have used if the intention was not only to grant a power with respect to changed circumstances but one which would include circum stances existing at the time the list was originally prepared. He suggested that the Legislature may have said "to bring into accord with existing facts or facts which existed. Another suggestion he made was that the words might be to bring into accord with actual facts'. We do not think his argument is advanced by these suggestions or that the language of the section would be rendered happier if the suggestions were accepted. On the other hand, if the intention was to confine the power to altered circumstances the proper words to use should have been `to bring into accord with altered circumstances' or similar words. Even apart from the consideration of (a) and (b) we would not limit the wide words used in section

9. The substance of the Punjab Urban Immovable Property Tax Act, 1940 is that it makes all buildings and lands situate in the area, to which it applies, liable to the payment of tax and then provides a machin ery for the assessment and realization of the tax. We have already stated the principles on which we would act in interpret ing sections of this kind. Here there can be no doubt as to the liability to tax of the buildings and lands included in the new list. There can be no doubt too that the intention was to provide a machinery so that no buildings or land escape assessment. The only question is whether in providing the machinery the Legislature has failed in such a manner that we cannot by any reasonable construction of the language employed cover the present case. Looking at section 9, we do not stand in need of any straining of language. Here the words used by the Legislature are such as C would include the case which has now arisen and if we refer to other parts of the section, the interpretation suggested by the assessee is negatived. We are being asked now upon considera tion relating to intention of Legislature to hold that the words in question were not intended in the wide sense which they would ordinarily carry. The liability to pay tax being clear our duty would be, as stated above, to enforce that liability by interpret ing a section relating to procedure in a suitable manner. It is obvious that if we accept the interpretation put upon the statute by the assessee we will be creating a causus omissus by limiting the operation of the words without there being any words of limitation in the provision. We do not see any Justification for such a course. It was argued by Mr. Yaqub Ali Khan that section 9 was not in fact intended for the contingency that has arisen. The Legislature, according to him was, when it enacted section 9, assuming that a list of all the buildings and lands had been prepared and the amendments allowed related only to the items already entered. As already stated he did not accept, what commended itself to the learned Single Judge that if the Corpo ration area was increased new items could be incorporated in the list. He contended that had the case of omission of buildings or lands been in the contemplation of the Legislature it would have found an express mention in section. We do not think that, the words of this section being sufficiently wide, we are entitled to go into the question of the intention behind the words for the purpose only of putting a construction that would affect the effective work ing of the Act. Assuming, without conceding, that the present contingency was not in view when section 9 was enacted we would still act on what was held in Scott v. Legg from which we have already quoted and hold that the present case is within section

9. One of the arguments put forward before us was that if we apply section 9 in this manner the assessee will be deprived of an opportunity to contest the assessment and also lose his right of appeal. On examining the section we come to the conclusion that no such result ensues. The proviso to the section enacts that except in cases of clerical corrections, mis descriptions and omissions, which in fact do not refer to the additions of a new item to the list, no order can be passed under that section without fourteen days' notice to the person who is effected by the order. There is also a right of appeal provided in section 10 against the order. The proviso as to notice applies not only to the case mentioned in (c) but to all cases in which the section is invoked excepting those covered by (a) and (b). We are further of opinion that power to add buildings and lands to a list exists apart from the provisions of section

9. Section 7 authorises the Provincial Government to get a list prepared. The preparation of a list means a complete list. As long as a complete list of buildings and lands in the rating area is not prepared it cannot be said that as yet a valuation list of the property situate in that area has been prepared. The object of section 7 is to grant the Provincial Government power to have rental value of buildings and lands assessed for the determination of the tax and till a full list is prepared the power is not exhausted. Also the grant of a power implies all powers essential to the effective exercise of that power, vide Maxwell on Interpretation of Statutes (p. 360); Craies on Statute Law (p. 227). Section 7 would enable the Provincial Government to do all that is essential for carrying out the purpose in view. The provision that a new list shall not be framed till the expiry of five years only means that instead of there being an annual assessment of rental value the assessment once made shall remain in force for five years. If there could be any doubt with respect E to this it is clarified by the concluding words of section 7 `until it is superseded by a new valuation list'. It is only a list which supersedes that is prohibited. In fact the learned Single Judge did not accept the contention that section 7 prohibited the list in dispute. The argument he gave effect to was that the new list would in any case, amount to an amendment and the power of amend ment must be sought within the four corners of section

9. We have stated the effect of section 7 and we are of opinion that section 9 is not intended to take away any power already existing by virtue of section

7. The provisions may overlap and in one respect they obviously do so for had section 9 not existed at all it could not be said that no power existed to correct clerical mistakes or accidental omissions. Such a power would be inherent in the power to frame a list. We hold that by virtue of section 7 itself the Provincial Government would have power to make additions to the list already prepared, in cases where the new items are not already on the list. Of course, in such a case it may be argued that the list really becomes complete only when all the items are entered and should become operative only from the date of completion. It can be said that till a complete list is prepared there being no valuation list as yet, the tax would not be a valid tax. However, a reply to this argument ay be found in section 21 which validates failures and omissions. We may here point out that section 24 gives power to the Provincial Government to frame rule for carrying out the purposes pf the Act and had the Government framed an explicit rule covering the present case there could be no objection to the validity of the rule. We are constrained to hold, therefore, that the additional list prepared was intra vires of the assessing authority and that the assessment of tax is valid. This appeal succeeds and the suit is dismissed, but parties are left to bear their own costs throughout. K. M. A. Appeal accepted.