JUDGMENT NASIM SlKANDAR, J. - The late Wealth Tax Act, 1963 was enforced on \sl day of July, 1963 'to provide for the levy of Wealth Tax'. II remained on the statute book till finally repealed through the Finance Act, 2003.
2. Section 5 (Exemption in respect of certain assets) of the Act as originally framed gave-the details of the assets which were not needed to be included in the net wealth of an assessee. Sub- section (2) of Section 5 at that time also provided for the power of the Federal Government to exempt any classes of asset or classes of persons from the tax payable under the Act. it was also provided that any P.C.T.L.R.
Exemption notified under that sub-section could be made by the Federal Government subject to such conditions as might be specified in the notification. Section 5 was substituted by Finance Act, 1996. The title of the Section was reduced to simple word 'exemptions' and it provided for exemptions in respect of assets, classes of asset or person or classes of persons specified in the second schedule which was created accordingly. The substitution of the existing provision and creation of the schedule was apparently done with the object to make transparent the exercise of power by the Federal Government. The change in the substituted section had three facets, it provided for the possibility of grant of exemption from levy of tax under the Act. Second, that the assets or classes of persons enjoying exemption were to be specified in the second schedule which was created for that purpose, and third, that enjoyment of such exemptions by assets or persons could be made conditional. Sub-section (2) of Section 5 provided for the powers of the Federal Government to amend the second schedule by way of a notification in the official Gazette, adding any clause or condition therein, omitting any clause or condition therein or making any change in any clause or condition. The proviso to sub-section (2) made the exercise of such power conditional in the following words:- "5(2).......................................... Provided that the Federal Government shall place before the National Assembly all amendments made by it in the second schedule during the financial year."
3. it goes without saying that simultaneously with the substitution of Section 5 (Exemptions) by Finance Act, 1996 the second schedule was created. Part-1 of the 'schedule gave details of as many as 28 exemptions to be enjoyed by assets or the assessees personally. On July 9, 1996 through SRO 595(1 )/96 sub-itenj*'?) was added to item (12) of the second schedule providing for exemption of 'one shop owned and occupied by the assessee for the purpose of his on business'. On March 3, 1997 the Central Board of Revenue through letter C.No.1(13)/WT/96 clarified that the word 'shop' had ordinary dictionary meaning for the purpose of Wealth Tax Act, 1963'. Again on March 22, 1997 another circular C.No.1(3)/WT/96 was issued to make following further clarification: "I am directed to refer to your letter No. Nil dated 11 April, 1997 on the above subject and to state that for the purpose of Wealth Tax Act, 'Shop' does not include offices. Accordingly, offices of professionals etc, are not covered by the clause (2) of the Second Schedule to the Wealth Tax Act- 1963."
4. The individual assessees in the assessment years 1996-97 and onwards filed wealth tax returns and claimed exemption in respect of different nature of immovable properties describing them as a 'shop'. The claimed exemption having been refused by the Assessing Officer, the assessees failed in first appeal as also in second appeal before the Income Tax Appellate Tribunal. Through different orders recorded by different Benches the learned Members of the Tribunal refused to allow the claimed exemption mostly by making reference to the meaning of the word 'shop' as explained in various English language dictionaries. Following is the list of the assets which were 'claimed exempt under item 12(2) of the second schedule to the Act on account of their being a 'shop':- s. No. Case No. Name/Title of the Assessee Nature of asset claimed excempt on account of its being a Shop.
1. ITA 440/98 Dr. Muhammad Shafique Al-Shafi Hospital 15- Gulshan Block, Allama Iqbal Town, Lahore.
2. ITA 122/99 Abdul Razzaq Tracer Parts Shop, 313- GT Road , Pakistan Mint, Lahore.
3. ITA 212/99 Abdul Razzaq Tractor Parts Shop, 313- GT road, Pakistan Mint, Lahore.
4. ITA 212/99 Talib H. Rizvi, Advocate Office, 11-Fane Road, Lahore.
5. ITA 219/00 Aziz Ahmad M/s. A.R. Engineering Works, Misri Shah, Lahore.
6. ITA 220/00 Rashid Ahmad M/s. A.R. Engineering Works , Misri Shah, Lahore.
7. ITA 338/00 Dr. Mahmood Akhtar Hayat. Karam Hospital, Shahiwal.
8. ITA 339/00 Dr. Munawar Ahmad Clinic at 11-Railway Road, Lahore.
9. ITA 340/00 Dr. Munawar Ahmad Clinic at HrRailway Road, Lahore.
10. WTA 349/00 Pervaiz Afzal Pervaiz Pipes Factory, Shahdara, Lahore.
11. ITA 356/00 Abdul Qadeer Saigol Master Motor Engineer Works, at Korey Shah, Defence, Lahore.
12. ITA 378/00 Mudassar Shadi Hall, Multan Road, Lahore Shadi Hall, Awan Town, Multan Road, Lahore.
13. ITA 379/00 Mudassar Shadi Hall, Multan Road, Lahore Shadi Hall, Awan Town, Multan Road, Lahore.
14. ITA 419/00 Mumtaz Ahmad Shop at 19-Abbot Road, Lahore
15. WTA 420/00 Sultan Ahmad Shop at 19-Abbot Road, Lahore
16. WTA 152/02 Abdul Qadeer . Saigol Master Motor Engineer Works, at Korey Shah, Defence, Lahore.
17. WTA 153/02 Abdul Qadeer Saigol Master Motor Engineer Works, at Korey Shah, Defence, Lahore.
18. WTA 194/02 Muhammad Akram Muhammad Akram Motor Workshop, 5-Queens Road, Lahore.
19. WTA 202/02 Abdul Qadeer Saigol Master Motor Engineer Works, at Korey Shah, Defence, Lahore
20. WTA 202/02 Abdul Qadeer Saigol Master Motor Engineer Works, at Korey Shah, Defence, Lahore.
21. WTA 206/02 Sheikh Muhammad Saleem A.S. Plastic Works, Shahdara, Lahore
22. WP 15148/99 Syed Zia Haider Rizvi, Advocate Office at 11-Fane Road, Lahore.
5. in some cases however the claimed exemption was allowed by the Assessing Officer but the assessm ents so framed under section 16(3) of the late Act were subsequently revised by the concerned Revising Authority/IAC under section 17B (Powers of Inspecting Assistant Commissioner to revise Wealth-tax Officer's order) of the Wealth Tax Act, 1963 whereby the granted exemptions were recalled. The orders so recorded by the Revising Authority under section 17B were successfully assailed by the assessees before the Tribunal which set aside these orders and accordingly restored the exemption earlier allowed by the Assessing Officer. The department P.C.T.LR.
Has assailed these orders of the Tribunal in respect of the following assessees which were earlier allowed exemption while framing of assessments but these orders were revised by the concerned Revising Authority/IAC and finally the Tribunal restored the granted exemption by setting aside the orders of the Revising Authority:- S.No. Case No. Name/Title of the Assesses Nature of asset claimed exempt on account of its being a Shop.
1. WTA 534/00 Muhammad Usman Ashraf So situated at Bibi Pak Daman, Lahaore.
2. WTA 1/2003 Khurshid Ahmad Khurshid Engineering Works, Hafizabad.
3. WTA 195/02 Muhammad Anwar Masud. Faisal Motors, 32-B Jail Road, Lahore.
4. WTA 196/02 Muhammad Anwar Masud. Faisal Motors, 32-B Jail Road, Lahore.
5. WTA 197/02 Shahzada Saleem Baig Saleem Motors, Jail Road, Lahore.
6. WTA 198/02 Malik Muhammad Aslam Plaza Motors, 5-A Queens Road, Lahore.
7. WTA 199/02 Malik Muhammad Aslam Plaza Motors, 5-A Queens Road, Lahore.
8. WTA 200/02 Malik Muhammad Aslam Show-Room at 5-A Queens Road, Lhaore
9. WTA 221/02 Iftikhar Ali Car Show Room at Queens Road, Lahore.
10. WTA 222/02 Iftikhar Ali Car Show Room at QueensRoad, Lahore.
11. WTA 223/02 Iftikhar Ali Car Show Room at Queens Road, Lahore.
12. WTA 224/02 Iftikhar Ali Car Show Room at Queens Road, Lahore.
13. WTA 225/02 Zulfiqar Ali Car Show Room at Queens Road, Lahore.
14. WTA 226/02 Zulfiqar Ali Car Show Room at Queens Road, Lahore.
15. WTA 2271- 02 Zulfiqar Ali Car Show Room at Queens Road, Lahore.
16. WTA 228/02 Zulfiqar Ali Car Show Room at Queens Road, Lahore.
6. Both, the individual assessees as well as Department have sought the opinion of this Court to the question if the respective immovable properties as detailed above owned and used by the assessees for the purpose of their profession were entitled to exemption as a 'shop' in terms of Item 12(2) of the second schedule to the Wealth Tax Act.
7. Learned counsel representing the assessees have again relied upon the meanings of the word 'shop' as explained in different English language dictionaries while the Revenue has also made similar reference not only the dictionary meaning but also to legal terms and phrases as explained in various books. During arguments on a query from the Bench if the insertion of the aforesaid exemption clause under item 12(2) of the second schedule to the Ordinance was ever placed before the National Assembly, the parties sought time to make out a research in that regard.
Thereafter when the case was fixed for arguments the learned counsel agreed that the requirement of placing of the exemption clause as contained in proviso to section 5(2) was never fulfilled. However, the learned counsel representing the assessees on the basis of a number of judgments of the Hon'ble Supreme Court as well as this Court and other High Courts have attempted to argue the P.C.T.LR.
Matter from the angle that the aforesaid condition of placing of an amendment made by the Federal Government in the second schedule before the National Assembly was merely directory and not mandatory. Some of these cases are, re: Reference No.1 of 1988, made by the President of Pakistan under Article 186 of the Constitution (PLD 1989 SC 75), re: Rana Muhammad Jamil Vs. The Punjab Road Transport Board, Lahore (PLD 1957 (WP) Lahore 1), re: Muhammad Matin Vs. M/s. Dina Manekji Chinoy (PLD 1983 Kar. 387), re.Niaz Muhammad Khan Vs. Mian Fazal Raqib (PLD 1974 SC 134) and re: Atta Muhammad Qureshi Vs. The Settlement Commissioner, Lahore Division, Lahore (PLD 1971 SC 61). Some of the learned counsel have also cited authoritative precedents on the function and object of a proviso in a provision of law. These cases include, re: Mian Rafi-ud-Din Vs. The Chief Settlement and Rehabilitaton Commissioner (PLD 1971 SC 252), re: Province of Punjab through the Secretary to Government of Punjab Communication & Works Department, Lahore \/s. Nadeem & Company, Lahore (PLD 1976 Lah. 1273), re: Mst. Surayya Begum Vs. Muslim Commercial Bank Ltd. (PLD 1990 Lah. 461), re: Iftikhar Ahamad Sheikh Vs. Ch. Muhammad Din (PLD 1990 Lah. 461), re: Muhammad Ismail Ghori Vs. Muhammad Ismail (PLD 1969 Kar. 306), and re: Dr. Habibur Rahman Vs. The West Pakistan Public Service Commission, Lahore (PLD 1973 SC 144).
8. Reliance has also been placed on the ratio settled in re: Muhammad Sadiq Khan Vs. District Magistrate (PLD 1992 Lah. 140) and re: The State of U.P Vs. Manbodhan Lai Srivastava (PLD 1958 SC
[lnd] 170) to stress that the use of word ;shall ,in the proviso conveys only a sense of direction to the Federal Government. '
9. Learned counsel for the Revenue on the other hand claims and we will agree that the cases cited at the bar in the aforesaid legal propositions are not attracted to the facts in hand in the first place the claim of an exemption presupposes the taxability of the item, property or income No assessee has a vested right in claiming an exemption We are absolutely clear in our mind that all changes made in the second schedule needed to be placed before the National Assembly and that the failure on the part of the Federal Government has nullified these amendments in the schedule, it is correct that the assessees are not responsible for such inaction. However, the requirement of law of placing these amendments before the National Assembly cannot be condoned nor the claimed exemption legalized for the sole reason that it is likely to cause inconvenience to the assessees. The Federal Government having failed to discharge an obligation cast upon it under law, the assessees could very well seek a direction by any superior Court in the country in constitutional jurisdiction to do the needful.
10. We will also agree that the condition of placing of amendments in the second schedule before the National Assembly is mandatory and irrespective of the party in default the failure in such placing, as said above, has rendered the amendment ineffective. The words of the proviso also make it clear that all amendments made in the second schedule during a financial year were to be placed before the National Assembly at the end thereof. The nonplacing of these amendments having deprived the National Assembly of its privilege of their approval or disapproval, these can not be clothed with legality for the mere reason of some further financial burden for the assessees.
The Principal that there is no equity about a tax operates in the negative as well, in absence of the approval of the National Assembly the notification making the amendments including the one in question is at best a desire on the part of the Executive to give a concession to a class of its assessees which, in view of its non-approval by the National Assembly, could not mature.
11. The case has to be examined from another angle also. The Second Schedule to the Wealth Tax Act is part of a law enacted by Parliament. Under the Constitution, the Legislature alone is constitutionally empowered to make and amend laws. Subject to limitations recognized and enforced by Courts, some legislative functions of a nature subordinate to the main legislation may be delegated to the executive arm of the State. The executive, in such cases, being a mere delegate of legislative functions, can only act within the mandate given to it by the Legislature, and subject to any conditions which may be imposed on it. If the executive arm of the State, while exercising the legislative function delegated to it, exceeds the mandate given by the Legislature or does not fulfil any condition imposed by the Legislature, the delegated legislation will be without force and of no legal effect, in the present case, the Federal Government, by virtue of section 5(2) of the Wealth Tax Act, has been granted the power to make amendments in the Second Schedule.
This power, however , is subject to the proviso that the Federal Government shall place all amendments made by it in the Second Schedule before the National Assembly, in the present case this condition, as discussed above, has not been fulfilled. The amendment, therefore, which is subject matter of the present case and which is being relied upon by the appellants in these appeals, cannot possibly be treated as law.
12. Since we are of the view that the mandatory condition in respect of the sub-item (2) of Item 12 was not fulfilled it never matured into a law nor on the basis of such amendment in the schedule the assessee ever acquired a right to claim exemption, the question as to grant of exemption as 'shop' to the aforesaid properties belonging to the individual assessees does not arise at all. We shall therefore refuse to answer the question and dismiss these appeals on account of their being infructuous. .