EJAZ AFZAL KHAN, J.-The N.-W.F.P. Finance Act, 1997 (N.-W.F.F'. Act No, HI of 1997) was promulgated on 7th July, 1997, whereby sections 2,3,4 and 7 of the West Pakistan Urban Immovable Property Tax Act, 1958 (W.P. Act No, V of 1958) were amended with the addition of the, schedule which not only classified the Urban and rating areas, buildings therein but also prescribed the amount of property tax levied thereon. As the amendments alongwith the schedule brought about a radical change in the mode and method of assessm ent of the property tax and envisioned manifold increase therein, its vices was questioned through Constitutional Petitions No,361 of 1998, 1677 of 1997, 896, 976, 1184, 1277, 1255, 1353, 1480, 15Q5, 1741 of 1999, 33, 34, 35, 36, 37, 38, 44, 45 of 2000, 563, 90, 4 of 2001, 733, 782 of 2002, 1423 of 2003, 1803 of A999, 1809 of 1999, 435 of 2002, 530, 478, 737, 781 of 2003, 322 of 2001, 112 of 2003 and 32 of 2004. Since a common question of law is .Involved in all these petitions, they are disposed of by this single judgment.
2. Barrister Zahurul Haq, learned counsel appearing on behalf of the petitioners took the lead and argued that when section 5 of the West Pakistan Urban Immovable Property Tax Act, 1958, according to which the annual value of a land or building estimated on the gross annual rent at which such land or building might or be reasonably be expected to be let afforded rational and reasonable basis for the assessm ent of property tax, it was a balanced law for all legal land practical purposes and thus .Needed no amendment. He next argued that rates prescribed in the schedule being in conflict with provisions of section 5 of the Act are not maintainable. He next argued that since according to the latest dispensation the annual value of the property is estimated on the basis of its measurement regardless altogether of its annual rental value its enforcement, besides being violative of the Constitutional provisions has given rise to gross and glaring discrimination as such it is liable to be struck down. The learned counsel concluded his arguments by arguing that where a plot of one Kanal having a covered area of one Marla is treated alike with a similar plot having a covered area of 10 Marlas with utter, disregard of its annual rental value, such classification can never be rational or reasonable. The learned counsel to support his contention placed reliance on the cases of Messrs Elahi Cotton Mills Ltd. And others v.
Federation of Pakistan through Secretary M/O Finance, Islamabad and 6 others (PLD 1997 Supreme Court 582), J.C. Shah. v. Ramaswa , and A.N. Grover (AIR 1969 Supreme Court 378) and Mst. Amina Jabeen v. Government of Punjab etc. (NLR 2001 Tax 189).
3. Mr. Abdul Sattar Khan, learned counsel appearing on, behalf of one of the petitioners by adopting the arguments of Barrister Zahurul Haq, added that where law aims at assessing a property to property ta'x in utter disregard of its annual rental value, it being expropriatory is liable to be struck down. If this amendment, he further urged, is allowed to be a part of the Act, sections 2, 5, 6, 7, 8, 9 and 10 together with rules 3, 5 to 11 will become redundant. The learned counsel also placed reliance on the case of Messrs Elahi Cotton Mills Ltd. And others v. Federation of Pakistan through Secretary M/O Finance Islamabad and 6 others (supra).
4. Mt. Nazir Hussain, learned counsel appearing on behalf of some of the petitioners argued that the tax is presumptive on the face of it, therefore, it cannot be justified by any canons of law when no measurement record is available with the Assessing Authority and no notice in terms of section 8 (2) of the .Act has been given to the person whose property has been entered in the draft valuation list. He next argued that where a property having similar nature and character situated in the Cantt. Area is subjected to a different treatment, the amendment in the Act being inconsistent with the equality clause shall, to the extent of such inconsistency, be void. The learned counsel by winding up his arguments argued that none of the amendments promulgated through Act No,III of 1997, Act No, V of 1969, Ordinance II of 2000 and Ordinance No, XV of 2001 can be retrospective in its operation as classification of the property was made after the expiry of valuation period. The learned counsel in this behalf referred to the case of West Punjab Province. v. K.B. Amiruddin and others (PLD 1953 Lahore 433).,
5. Mr. Abdul Rauf Rohaila, learned counsel appearing on behalf of other petitioners argued that the classification by the Statute regarding the buildings residential as well as commercial is not based on reasonable basis as two buildings having similar nature and location may fetch different income, therefore, they cannot be grouped together for the purposes of assessment of property tax with utter, disregard to their annual rental value. The learned counsel also placed reliance on the case of Messrs Elahi Cotton Mills Ltd. And others v. Federation of Pakistan through Secretary M/O Finance Islamabad and 6 others (supra).
6. Mr. Mir Adam Khan, learned counsel appearing on behalf of one of the petitioner argued that where a property has not been notified to be an urban property, it cannot be treated as such for the purpose of the Act. The learned counsel to support his contention placed reliance on the case of Muhammad Aslam v. Secretary Excise and others (PLD 2000 Lahore 589). The learned counsel representing the petitioners in other petitions adopted the arguments of Barrister Zahurul Haq without making any addition.
7. As against that, Barrister Jehanzeb Rahim, the learned Advocate General while highlighting the earst-while mode and method of charging and assessing the property tax, argued that'there was a lot of corruption at various levels which resulted in huge and massive loss to the Government, therefore, the legislature to curb it has rightly introduced the amendments in the law. There is, he elaborated his argument, a marked increase in the tax collection because of these amendments as the figures have risen from 66 millions to 140 millions. He next urged that the meager number of petitions questioning the vires of the amendments shows that people by and large have not only accepted this law but have also started making payment in accordance therewith, therefore, no challenge can be flung against its constitutionality as every law reflects the will of majority of the people. The learned Advocate General next argued that if all the amendments in the Statute ranging from 1997 up to 2001 are considered in their proper perspective, they clearly show that the law has not remained as stringent as it was at the time when the 1st amendment was promulgated. The learned Advocate General also defended the classification given in the schedule by arguing that it is based on rational and reasonable differentia and has nexus with the object sought to be achieved, therefore, it cannot be held violative of equality, clause when there is no discrimination within the classified buildings. The learned Advocate General to support his submissions also placed reliance on the case of Messrs Elahi Cotton Ltd. And others v. Federation of Pakistan through Secretary M/O Finance Islamabad and 6 others (supra). The learned Advocate General next argued that while applying the principle of equal protection of law mathematical precision, or exactitude is not possible, therefore, slight differences here or there will not be of much importance. The learned Advocate General.Placed reliance on the case of Pakistan Muslim League
(Q) and others v. Chief Executive of Islamic Republic of Pakistan and others (PLD 2002 Supreme Court 994) and. Dr. Tariq Nawaz and another v. Government of Pakistan through the Secretary, Ministry of Health, Government of Pakistan Islamabad and another (2000 SCM'R 1956). He argued that there is no conflict between the old and the new law and in case there is any, that is to be harmonized in such a way that every part thereof becomes effective as the Courts always lean in favour of constitutionality of the Act and even go to the extent of exploring, it, if it is not apparent.
He referred to the cases of Syed Muhammad Ali Shah Bukhari, v. Chief Administrator of Auqaf Punjab Lahore and 3 others (PLD 1972 Lahore 416), Commissioner of Sales Tax v. Messrs Zelin Ltd.
Karachi (PLD 1967 Karachi 3341), Emmanual Masih. v. The Punjab Local Councils Election Authority and others (1985 SCMR 729) and Messrs Mehboob Industries Ltd. v. Pakistan Industrial Credit and Investment Corporation Ltd. (1988 CLC 866). The learned Advocate General further argued that equity and tax are alien to each other, therefore, the enforcement of a fiscal law cannot be obstructed on equitable considerations. He also argued that a fiscal law can be retrospective in its operation if its language unequivocally indicates it. He in this connection referred to the case of Star Textile Mills Ltd. And others v. Government of Sindh and others (2002 MLD 1608).
8. We have gone through the record the relevant Statutes alongwith amendments and considered the judgments cited at the bar.
9. Before we appreciate the controversy sprouting from the petitions before us, it is worthwhile to refer to the relevant provisions of the Act as it stood before the amendment:-- "Section 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 of several urban areas may be grouped as one rating area.
(2) There shall be charged, levied and paid a tax on the annual value of building and lands in a rating area at the rate of 10 per cent of such annual value:-- Provided that where a building is occupied (for residential purposes) 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 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.
(3) The tax shall be due from the owner of buildings and lands.
Section 4. Exemptions.--The tax shall not be leviable in respect of the following properties, namely:--
(a) buildings and lands other than those leased in perpetuity, vesting in the Federal Government:
(b) buildings and lands other than those leased in perpetuity.
(i) vesting in Government of West Pakistan and not administered by a local authority;
(ii) owned or administered by a local authority when used exclusively for public purposes and not used or intended to be used for purposes of profit:
(c) (i) buildings and lands the annual value of which does not exceed two hundred and sixteen rupees; or
(ii) one building occupied by a owner for his residence, the annual value of which:-
(1) does not exceed four hundred and eighty six rupees in the rating areas of a municipality of the first class; or
(2) does not exceed three hundred and seventy eight rupees in other rating areas, subject to the condition that the owner or any member of his family does not own any other property in that rating area and such other conditions as may be described. Provided that if such building or land is in the ownership of a person who owns any other building or land in the same rating area, the annual value of such building or land shall, for the purposes of this clause, be deemed to be the aggregate annual value of all buildings or lands owned by him in that area;
(d) buildings and lands or portions thereof used exclusively for educational purposes including schools, boarding houses, hostels and libraries;
(e) public parks and playgrounds;
(f) buildings and lands or portions thereof used exclusively for public worship or public charity including mosques, churches, dharamsalas, gurdwaras, hospitals, dispensaries, orphanages, alms houses, drinking water fountains, infirmaries for the treatment and care of animals and public burial or burning grounds or other places for the disposal of the dead:-- Provided that the following buildings and lands or portions thereof shall not be deemed to be used exclusively for public worship or for public charity within the meaning of this -section, namely:--
(i) buildings in or lands on which any trade or business is carried on unless the rent derived from such buildings or lands is applied exclusively to religious purposes or such public charitable institutions as may be prescribed;'
(ii) buildings or lands in respect of which rent is derived and such rent is not applied exclusively to religious purposes or to public charitable institutions; and
(g) buildings and lands the annual value of which does not exceed one thousand rupees, belonging to widows and minor orphans. Section 5. Ascertainment of annual value.--The annual value of any land or building shall be ascertained by estimating the gross annual rent at which such land or building together with its appurtenances and any furniture that may be let for use or enjoyment with such building might reasonably be expected to be let from year to year; less:--
(a) any allowance not exceeding twenty per centum of the gross annual rent as the assessing authority in each particular case may consider reasonable rent for the furniture let with any such building;
(b) an allowance of ten per centum for the cost of repairs and for all other expenses necessary to maintain such building in a state to command with gross annual rent. Such deduction shall be calculated on the balance of the gross annual rent after the deduction, if any, under clause (a); and
(c) any land revenue actually paid in respect of such building or land; Provided that in calculating the annual value of any building or land under this section the value of any machinery in such building or in such land shall be excluded. Section 7, Making and operation of valuation lists.--(1) A valuation list shall be made by the prescribed authority 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 (July), or the first day of (January), and thereafter a new valuation list 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 Government may be order:--
(a) reduce by a period not exceeding one year or extend by a period not exceeding 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 purposes of a new valuation list and determine the years in which the next following valuation list for each of such parts respectively shall be made and come into force.
(2) Subjects to the provisions of any such order as aforesaid, every valuation list shall come into force on the first day of (July) or the first day of (January) 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 there under (Including the provisions with respect to the alteration of and the making of additions to the valuation list) remain in force until list is superseded by a new valuation list.
Section 8. Draft valuation list.--(1) where the assessing authority for any area has issued notices requiring returns in connection with the making of a new valuation list, the said authority shall, as soon as may be after the expiration of the period allowed for the delivery of the returns, cause a draft valuation list to be, prepared for the area and published in such manner as may be prescribed.
(2) Any person aggrieved by any entry in the draft valuation list, or by the insertion therein or omission there from of any matter, or otherwise with respect to the list, may, in accordance with the rules made under this- Act lodge an objection with the assessing authority at any time before the expiration of thirty days from the date on which the draft valuation list is published; (Provided that in special circumstances the Commissioner may by notification, extend the period to a maximum of sixty days.) Section 9. Amendment of current valuation list.--Subject to such rules, if any, as the Government 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 to be 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 insertion or omission or any misdescription;
(c) make such additions to or correction 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 its value was last previously determined;
(iii) any change in the ownership or use of any building or land:-- Provided that not less than fourteen days before making any such 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 insertion, 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. Section 10. Appeal and a revision.--(1) Any person aggrieved by an order of the appropriate authority upon an objection made before that authority under section 8, 9, 14 or 15 may appeal against such order, at any time before the expiration of thirty days from the date of such order, to the Collector of the district in which the building or land to which the objection related is situate, or to such other officer as the Government may, by notification appoint in this behalf.
(1A) Any person aggrieved by any entry in the valuation list prepared under section 7, or by the insertion therein or omission, therefrom of any matter, or otherwise with respect to the list may, within sixty days of the date on which the list is to come into force, prefer an appeal in respect of such entry or matter, to the Collector or to such other officer as the Government may, by notification, appoint in this behalf.
(2) The Commissioner or such other officer as may be appointed by the Government by notification in this behalf, may of his own motion at any time, or on application made within a period of one year from the date of the taking of any proceedings or passing of any order by an authority subordinate to the Commissioner call for and examine the record of the proceedings or the order for the purpose of satisfying himself as to the legality or propriety of the same and may pass such order in reference thereto as he may consider fit."
10. The amendments introduced by Act No, HI of 1997 are also relevant and thus read as follows:-- "(4) Amendment of W.P.Act V of 1958.--In the West Pakistan Urban Immovable Property Tax Act, 1958 (W.P. Act V of 1958).
(1) in section 2, after clause (g), the following new clause shall be inserted, namely:-- ("ga) 'Schedule' means the Schedule to this Act;";
(2) in section 3, or for subsection (2) the following shall be substituted, namely:- "(2) There shall be levied, charged and paid a tax on the buildings and lands in rating areas at such rates and in respect of such buildings and lands as prescribed in the Schedule: Provided that different rates may be prescribed for different categories of buildings and lands including building and lands located in different areas:-- Provided further that Government may, by notification, for reasons to be recorded, remit in whole or in part, the payment of the tax by any class of person in respect of any category of property.";
(3) for section 4 the following shall be substituted, namely:-- "(4) Exemptions.-The tax shall not be leviable in respect of the following properties, namely:--
(a) buildings and lands, other than those leased in perpetuity, vesting in the Federal Government;
(b) buildings and lands, other than those leased in perpetuity, vesting in Government and not administered by a local authority, or owned or administered by a local authority when used exclusively for public purposes and not used or intended to be used for purpose of profit;
(c) buildings and lands the area whereof does not exceed three Marlas;
(d) public parks, playgrounds and libraries;
(e) buildings and lands or portions thereof used exclusively for public worship or public charity including mosques, churches, dharamsalas, gurdwaras, orphanages, alms houses, drinking water fountains, infirmaries for the treatment and care of animals and public burial or burning grounds or other places for the disposal of the dead: Provided that the following buildings and lands or portions thereof shall not be deemed to be used exclusively for public worship or public charity within the meaning of this section, namely:--
(i) buildings in or land on which any trade or business is carried on unless the rent derived from such buildings or land is applied exclusively to religious purposes or such public charitable institutions as may be prescribed;
(ii) buildings or land in respect of which rent is derived, and such rent is not applied exclusively to religious purposes or to public charitable institutions; and -
(f) buildings and lands belonging to widows and minor orphans who are not assessed to income- tax.";
(4) in section 7.
(a) in subsection (1), for the words "five years" the words "three years" shall be substituted; and
(b) after subsection (2) the following new subsection shall be added, namely:-- "(3) after every three years the tax shall be increased at the rate of fifteen per cent of the tax last assessed and a new valuation list shall accordingly be prepared." And
(5) the Schedule specified in Schedule I shall be added at the end. Schedule-I (See Section 4(2))
"Schedule (See Section 3(2))
PART-I RESIDENTIAL BUILDINGS RESIDENTIAL BUILDINGS S. No.Category Rate of tax at Provincial and Divisional Head- quarters for old city and new extended area.
Head- quartersRate of tax in suburban areas (other than areas covered by column 3) of the Provincial and divisional Rate of tax at District Head- quarters for old city and extended area not covered column No.4 Rate of tax at District Head-- quarters other than areas by covered by column5 of the District Head-- quarters.
1 2 3 4 5 6
1. Exceeding3 Marlas but not exceeding 5 marlasRs.750 Per AnnumRs.325 per AnnumRs.300 per AnnumRs.150 per Annum
2. Exceeding 5 Marlas but not exceeding 10 Marlas.Rs.1500 Per AnnumRs.750 Per AnnumRs.750 Per AnnumRs.500 per Annum
3. Exceeding10 Marlas but not exceeding 20 Marlas.Rs.2000 Per AnnumRsA000 Per AnnumRs.1000 Per AnnumRs.500 per Annum
4. Exceeding15 Marlas but not exceeding 20 MarlasRs.3000 Per AnnumRs.1500 Per AnnumRs.1500 Per AnnumRs.750 per Annum
5. Exceeding 20 MarlasRs.3,000 Per Annum for the first 20- Marlas plus Rs.200 Per additionalRs.1,500 Per Annum for the first 20 Marlas plus Rs.100 PerRs.1,500 Per Annum for the first 20 Marlas plus Rs.50 PerRs.750 Per Annum for the first 20 Marlas Marlas. additional Marlas.additional Marlasplus Rs.50 Per additional Marlas.
Part-II COMMERCIAL BUILDINGS S. No.Category Rate of Tax for Provincial HeadquartersRate of Tax for Divisional Headquarters (other than Peshawar)Rate of Tax for District Headquarters the than These covered by column 4)
1 2 3 4 5
1. Ground/First Floor Rs.7 Per Sq.ft. Rs. 4 Per Sq.ft. Rs.2 Per Sq.ft.
2. Basement/Upper Storeys Rs.3 Per Sq.ft. Rs. 2 Per Sq.ft. Rs.11 Per Sq.ft.
PART-III OFFICES Building acquired for use as offices by Government or Semi-Government Organizations or By Banks and Development Financial Institutions and lands shall be assessed for the purpose of tax on the basis of 20 percent of the annual value of such buildings or lands.
PART-IV PETROL PUMPS
(i) Petrol Pumps with Convenience Stores Rs. 1000 Per Annum
(ii) Petrol Pumps without Convenience Stores Rs.5000 Per Annum PART-V INDUSTRIAL BUILDINGS Industrial Buildings within the limits of Urban areas shall be assessed for the purpose of this tax at the rate of one rupee per square foot."
11. The amendment which was introduced by Act No, V of 1999 reads as under:-- Insertion 3... In subsection (2), the full-stop appearing at the end of second proviso shall be replaced by a colon and thereafter, the following new proviso shall be added, namely:-- "Provided also that a surcharge at the rate of 10% of the tax shall be levied in addition to the tax in respect of each commercial building the annual tax whereof, has been assessed to one lac rupees or more"; and After subsection (2), as so amended, the following new subsection (2a) shall be inserted, namely:- - "(2a) A rebate at the rate of 10% of the tax assessed under subsection (2) shall be admissible to those assesses who pay the tax in advance for the whole year by the 31st day of August of the year to which it relates.' And "In section 4, in clause (c) between the words "buildings and lands" commercial buildings," shall be inserted; and.
12. The amendment which was introduced by the "North West Frontier Province Finance Ordinance, 2000" (Ordinance H of 2000), is also reproduced and thus reads as under;--
(3) Amendment of W.P. Act V of 1958.-In the West Pakistan Urban Immovable Property Tax Act, 1958 (W.P. Act V of 1958), in the Schedule,--
(i) For Part H the following shall be substituted, namely:-- PART-II COMMERCIAL BUILDINGS AT PROVINCIAL HEADQUARTER S. No.Category of locality where the property is situated.Rate of tax per square feet of covered area. Ground Floor 1st Floor and BasementUpper Storeys 1 2 3 4 5
1. A Rs.10 Rs.7 Rs.5
2. B Rs.7 Rs.5 Rs.3
3. C Rs.5 Rs.3 Rs.2
4. D Rs.3 Rs.2 Rs.1 Note.-For the purpose of column 2, the categories `A"B"C' and `B' shall be such as respectively notified by Government in the Official Gazette,;
(ii) after Part II, as so substituted, the following new part shall be inserted, namely:-- PART-II-A COMMERCIAL BUILDINGS LOCATED AT THE PLACES OTHER THAN THE PROVINCIAL HEADQUARTER S. No. Category Rate of tax per Square feet of covered areas at Divisional HeadquartersRate of tax per square feet of covered areas in the Districts other than the District of Provincial and Divisional Headquarters 1 2 3 4
1. Ground/First Floor Rs.4 Rs.2
2. Basement/Upper stories Rs.2 Rs.1" and
(iii) for Part V the following shall be substituted namely:-- PART-V INDUSTRIAL BUILDINGS Industrial buildings within the limits of rating areas shall, for the purposes of this tax, be assessed at the rate of Rs,2.50 per square feet of the covered areas of such buildings."
13. The amendment which was introduced through Ordinance No, XV of 2001 is also reproduced as under:-- "In section 3, for subsection (2) the following shall be substituted, namely: -- "(2) Subject to the provisions of section 4, there shall be levied, charged and paid a tax, on the basis of annual rental value of buildings and lands in the rating areas (hereto fore notified or as may hereafter be notified under this Act).
(a) at the rate specified in Schedule I in respect of residential buildings;
(b) at the rate of specified in Schedule II in respect of commercial buildings, to be calculated in accordance with the factors and formula given in the respective Schedule. Provided that.-
(i) a residential building owned and occupied by a widow whose annual tax, excluding the possible rebates, is up to two thousand and five hundred rupees, shall be exempt from payment of any tax under this Act, but if the annual tax of such building excluding rebate, exceeds the said amount, the entire tax as assessed under clause (a) shall be payable in respect of such building.
(ii) where a residential building owned and occupied by the owner himself, he shall be entitled to a rebate of fifty per cent, if he or any members of his family does not own any other residential building in the same rating area; and
(iii) all residential buildings shall be admissible to the maintenance/age rebates at the following rates.
(a) building exceeding ten years but not exceeding twenty years old;10%
(b) building exceeding twenty years but not exceeding thirty years old, and20%
(c) building exceeding thirty years old 30%
14. A look at the above quoted provisions of the Act and the amendments introduced therein will indicate that a significant change has been brought about by the legislature in the mode and method of charging and assessing the property tax. Before the amendments it was the sole discretion of the E.T.O. And the other officials in the hierarchy to fix any amount as annual rental value of a land or building for assessing the property tax. But this mode not only resulted in heavy tax evasion but also defeated the very purpose of taxation as it, instead of enriching the State, enriched those who resorted to its evasion and those who helped it. A fool proof system for charging and assessing the property tax was thus imperative to curb corruption and ensure transparency in the process. The law, in force, before the amendments, had many holes and as such was at the verge of becoming a dead letter. The legislature after collecting the requisite data having bearing on the matters of taxation rose to the occasion and introduced the amendments which not only classified the urban and rating areas, lands and buildings therein but also prescribed the property tax levied thereon.
15. The purpose behind this classification was to provide a uniform basis for taxing the lands and buildings essentially equal with reference to their nature and location, the purpose they are used for, their earning capacity and other factors having bearing on the matters of taxation. Though this equality may not have mathematical precision or exactitude, none-the-less, nothing has been canvassed at the bar by the learned counsel for the petitioners which could even remotely suggest that the classification reflected in the schedule is irrational or unreasonable. Not even a single syllable has been uttered at the bar as could show that the rate prescribed of a given building with a given measurement in a given urban or rating area is excessive, unreasonably high or expropriatory by any attribute. Therefore, we do not feel persuaded to agree with the argument that the classification is not based on intelligible differentia or that the tax is in any way expropriatory.
16. The argument that when a plot of one Kanal having covered area of 5 Marlas is treated at par with a similar plot having covered area of 10 Marlas in utter disregard of its annual rental value, such classification can never be rational or reasonable, being hypothetical will not affect the Constitutionality of the amendments as no facts and figures indicating such disparity have been brought on the record. Even if it be so, it will not cloud their constitutionality because, as observed earlier, the equality amongst the objects grouped together may not be mathematically precise, scientifically perfect and logically complete. The judgments rendered in the case of Pakistan Muslim League (Q) and others v. Chief Executive of Islamic Republic of Pakistan and others and Dr. Tariq Nawaz and another v. Government of Pakistan through the Secretary, Ministry of Health, Government of Pakistan Islamabad and another (supra) may well be referred with advantage.
17. The case of State of Kerala v. Haji K. Kutty (AIR 1969 SC 378) will not advance the case of the petitioners as in that case while imposing the tax, class of buildings, their nature of construction, the purpose they are used for, their location, their capacity of profitable user and other relevant circumstances having bearing on the matters of taxation were not considered whereas the impugned amendments in general and schedule in particularly clearly show that all these factors were taken stock of by the legislature before imposing the tax.
18. The judgment rendered in the case of Mst. Amina Jabeen v. Government of Punjab etc. (NLR 2001 Tax 189) (supra) is also not relevant to the instant case as in that case valuation table prepared for the purpose of Stamp and Registration Act was held inapplicable for the purpose of the property tax, whereas no such question is involved in this case.
19. The judgment rendered in the case of Messrs Elahi Cotton Mills Ltd. And others v. Federation of Pakistan through Secretary M/O Finance Islamabad and 6 others (supra) will not support the contentions of the learned counsel for the petitioners when the Hon'ble Supreme Court after extensively quoting from the case law and treatises held that the legislature enjoys a wide latitude in the matters of selection of persons, subject-matters and events etc. For taxing and there is presumption in favour of the Constitutionality of the legislative enactments unless, of course, it is ex-facie violative of the Constitutional provisions ensuring equality before law which is not the case here. The relevant paragraph of the aforesaid judgment is reproduced for the facility of the reference which reads as under:-- "(44). Adverting to the above first reasons, it may be observed that it is true that the power to tax cannot be used to embarrass and destroy the business/occupations which are sine qua non for the propriety of the people and the country. The object of the levy and recovery of taxes as pointed out hereinabove is to run the State and to make efforts for creation of an agalitarian society. If the rates of taxes are so high and disproportionate to the actual earnings or earning capacities that they destroy the tax-payers, the very object of their levy and recovery is defeated. It has, therefore, been held by the superior Courts of the foreign jurisdiction as well as of Pakistani jurisdiction including this Court that the taxes should not be expropriatory and confiscatory in nature and that the same should not be imposed in such a way so as to result in acquiring properties of those to whom the incidence of taxation fell and if that is so, then such legislation would be violative of fundamental rights to carry on business or to hold properties as guaranteed by the Constitution.
The learned counsel for the appellants have heavily relied upon the judgment of this Court in the case of Government of Pakistan v. Muhammad Ashraf (PLD 1993 SC 176), in which this Court accepted the above legal proposition that a tax, which is confiscatory in its nature, would be violative of the fundamental rights relating to carrying on business and holding properties, but remanded the case to the High Court to examine the question, as to whether the rate of regulatory duty on Soyabean Oil imposed was of confiscatory nature. We are inclined to reiterate the principle of law enunciated in the above report. However, we are unable to agree with the learned counsel for the appellant that the rates of taxes imposed under the impugned sections 80-C, 80-CC and 80-D of the Ordinance are confiscatory and expropriatory in nature. Since there is a presumption in favour of legislature competence as held in a number of judgments referred to hereinabove, the burden to show that the impugned taxes are confiscatory or expropriatory, was on the appellants.
In our view, they have failed to bring on record any reliable material on the basis of which it can be concluded that the same are confiscatory or expropriatory. Messrs Dr. Ilyas Zafar and Iqbal Naim Pasha, while arguing Civil Appeal No, 478 of 1995, submitted that the appellants in the above appeal declared Rs,6,47,243 as the net profit for the assessment year involved but they were made to pay presumptive tax amounting to Rs,66,00,282. Whereas Mr. Sikandar Hayat, who argued for the appellants (National Construction Company) in Civil Appeal No,1496 of 1995, contended that the appellant suffered loss of Rs,24,88,18,613 in the assessment year, 1992-93 but they were made to pay presumptive tax under section 80-C Rs,1,35,29,726. The above two instances cannot be treated as sufficient for rebutting the presumption in favour of the competency of the Legislature. The question, as to whether a particular tax is confiscatory or expropriatory, is to be determined with reference to the actual earning or earning capacity of an average prudent successful entrepreneur in a particular trade or business. The fact that a particular assessee has suffered loss/losses during certain assessm ent years, is not germane to the above question. In this regard reference may again be made to the case of the Madurai District Cooperative Bank Ltd. v. Third Income Tax Officer, Madurai (AIR 1972 SC 2016) referred to hereinabove in para. 28(x), wherein taxable income of the assessee declared was Rs,51,763; whereas the tax imposed was Rs,76,674,07 including surcharge.
Indian Supreme Court sustained the above levy and inter alia held that what is not income under the Income Tax Act can be made income under the Finance Act or exemption granted by the Income Tax Act can be withdrawn by the Finance Act or its efficacy can be reduced."
20. The argument that the rates prescribed in the schedule being in conflict with the provisions of section 5 are not maintainable, is also without force as there is absolutely no conflict between the section and the schedule, when despite amendments in the Act, the conditions for charging and assessing the property tax have remained much the same. Needless to say that even in the case of conflict as held in the judgments rendered in the cases of Syed Muhammad Ali Shah Bukhari v.
Chief Administrator of Auqaf Punjab Lahore and 3 others, Commissioner of Sales Tax v. Messrs Zelin Ltd. Karachi, Emmanual Masih. v. The Punjab Local Councils Election Authority and others and Messrs Mehboob Industries Ltd. v. Pakistan Industrial Credit and Investment Corporation Ltd.
(supra), the Courts are required to harmonize the provisions of a Statute in such a way that every part thereof becomes effective.
21. The argument that the tax being presumptive cannot be justified by any canons of law is also without force as it was more or less presumptive even before the amendment when annual value of a land or building was estimated at which it could or reasonably be expected to be let out.
22. The argument that no record regarding the measurement of the property taxed is available with the Assessing Authority and no notice in terms of section 8(2) having been given to the person whose property has been entered in the draft valuation list being relatable to the question of fact, should better be agitated before the forum of the concerned hierarchy when the provisions providing redresses of such nature are intact.
23. The argument that none of the amendments promulgated through the Acts or Ordinances could be retrospective in its . Operation as classification was made after the expiry of valuation period is also without force as the amendments have not been given retrospective effect.
24. The argument that the property having similar nature and character situated in the Cantonment area is subjected to a different treatment, therefore, the amendments being inconsistent with the equality clause shall, to the extent of such inconsistency, be void, is more or less conjectural when nothing has been, brought before us to prove that the property situated in the Cantonment area is of similar nature and character and that its capacity of profitable user is equal or alike.
25. The argument that where a property has not been specifically notified to be an urban property, it cannot be treated as such for the purpose of the Act is not a question relating to the vires or otherwise of the Statute, therefore, it being a question of fact can well be agitated in the forum provided under the law.
26. The upshot of the above discussion is that all these petitions fail which are accordingly dismissed, alongwith C.M.