' SABIHUDDIN AHMAD, J.---The petitioner who claimed to be a charitable trust have called in question the levy of property tax in respect of a building owned by them and different demand notices issued by the respondent No.1 requiring payment of such tax. Briefly the petitioner's case appears to be that they are Charitable Trust formed with the objective of construction and rendering financial assistance to institutions of health-care, education and socio-economic well- being of the people. Their income has already been exempted from the operation of Income Tax Ordinance by the Central Board of Revenue.
2. In 1986 when Property and Betterment Tax was demanded from the petitioner on the building owned by them they filed C.P. No.D-1108 of 1986 before this Court questioning such levy and an interim order was passed in their favour. However, during the pendency of the petition the respondent No.3 issued a Notification, dated 6th January, 1990 under section 3(4) of the Sindh Urban Immovable Property Tax Act, 1958 (hereinafter mentioned as the Act), to the following effect:-- "Notification ' No. SO. T-I (E&T)3(241)/77 Tax. In exercise of the powers conferred by subsection (4) of section 3 of the Sindh Urban Immovable Property Tax Act, 1958 the Government of Sindh are pleased to remit the payment of property tax and betterment tax in respect of Property bearing No.C-IV-19 Civil Lines Karachi of Shaikh Sultan Trust w.e.f from 1-7-1996.
(Sd.)
' Ghulam Mujadid Isran Secretary to Government of Sindh".
3. As a consequence of the aforesaid Notification the petition was disposed of as having become infructuous and the petitioner who has earlier paid about Rs.9,89,000 under protest applied for refund of the same. However, the respondents instead of refunding the amount claimed started claiming such tax with effect from 27-3-1999 on account of certain amendments made in the Act.
4. Mr. Hafiz Abdul Baqi, learned counsel for the petitioner, apart from of that in the fact of remission granted under section 3(4) of the Act through Notification, dated 6-1-1990 no tax was payable contended as the petitioner was as public charity and exempt from payment of tax under section 4 of the Act. He urged that such charities were always exempt from payment of property tax except for a brief period between 1999 and 2001. He candidly pointed out that in section 4 which provides that the tax shall not be leviable on certain properties and amendment was affected in clause (1) through Ordinance IV of 1999, whereby public charities were excluded. However, through Finance Ordinance, 2001, the aforesaid clause was once against amended to included properties used for public charities provided that the exemption to charitable institution would be allowed in the prescribed manner. Learned counsel further argued that the 1999 amendment did not affect the petitioner's case inasmuch as once remission had already been granted to him, the amending Act could not be retrospectively applied so as to destroy the petitioner's vested rights particularly when it was not included to be given retrospective effect.
5. Responding to the first contention of Mr. Hafiz Abdul Baqi, premised on section 3(4) of the Act, Mr. Muhammad Qasim Mirjat, Assistant Advocate-General argued that aforesaid provision expressly requires that payment of tax in respect of any category of property by any class or person could only be remitted for reasons to be recorded. He pointed out that no reasons whatsoever had been recorded in the Notification, dated 6-1-1990. While it might be possible to contend that an element of Promissory Estoppel had come to operate and though it may be possible for an affected party to question the same but contending that an order or Notification in violation of the requirement to record reason is vitiated, the party passing the order cannot claim advantage of its own wrong.
Nevertheless we have found another serious difficulty in the aforesaid Notification which appear to be fatal. It may be observed that section 3(4) of the Act enables the GOvernment, for reasons to be recorded, to remit payment of tax by any class of person in respect of any category of property. It is apparent that such power is required to be exercised in strictly in non-discriminatory manner in respect of a class of person or categories of property. The Notification in question however, only refers to a particular property owned by a particular person and this, in our view, is a mala fide exercise of public power. We are therefore, constrained to hold that the same to be without lawful authority.
6. Even otherwise if the Notification be held to be valid it could only extend to the date of its issuance and not beyond. It may be noticed that section 3(4) of the Act only confers a power to remit the payment of tax, whereas section 4 exempts certain properties from the levy of tax. The distinction between exemption and remission, therefore, need to be appreciated. The expression "remit" has not been defined in the Act but in Black's Law Dictionary, it has, inter alia, been described as `to pardon or forgive' the word "remission" has been described as 'cancellation or extinguishments of all or part of a financial obligation. In Chambers 21st Century Dictionary, it has also been described as 'relinquishment of a claim of refrain from demand a debt'. We are [Vol. VIII Muhammad Amir Bhatti for E Petitioner. . therefore, of the view that under section 3(4) of the Act only a liability which has already accrued can be remitted, but it does not extend to exempt a person or a property from liability to pay tax in the future. ' Therefore, while the Notification could only be construed to have wiped out the existing liability but could not be treated as exempt the property from tax..
As regards the contention premised on section 4(i) of the Act, it may be stated that even if the property was entitled to statutory exemption up to 27-3-1999 the same came to an end when the properties belonging to public charities ceased to remain entitled to such exemption. In any event the petitioner never acquired a right in perpetuity to the exemption from the levy of tax and the exemption could always be taken away through a specific legislation. When it was made available to public charity through the Finance Act, 2001, it was subject to the proviso that it would only be allowed in the prescribed manner. Learned Assistant Advocate-General argued that under rule 24 of the Rules made under the Act, benefit of section 4(1)(f) could only be claimed by a Charitable Institution upon issuance of a certificate by the respondent No.1 upon being specified that the income of the property was being spent for a purpose for which exemption could be allowed. He contended that no information whatsoever in this respect was ever furnished to the respondent.
Moreover, we have noticed that section 4(1)(f) does not exempt all properties owned by a public charity from tax liability but only those properties which are used exclusively for the purposes of a public charity. Indeed there is nothing to indicate that the building is exclusively used by the petitioner for its charitable objectives. For the foregoing reasons we find no force in this petition and dismiss the same.