1. ' GULZAR AHMED, J.---This is an application under section 12(2) C.P.C. Filed by the Province of Sindh through Excise and Taxation Department, wherein the judgment and decree passed in suit No,772 of 2001 is sought to be set aside. The defendant has filed counter affidavit. Muhammad Wasay Jalil, Town Nazim Gulshan-e-Iqbal Karachi has filed his comments in which he has prayed that clause 5.2 of the settlement agreement be nullified as it is causing colossal revenue loss.
2. ' Brief facts of the matter are that KMC (now CDGK) had filed suit No, 772 of 2001 against Messrs A.A.
3. Joyland (Pvt.) Ltd. For declaration, cancellation, possession, injunction, accounts and recovery of Rs.254,786,763. During the pendency of the suit it appears that thematter was referred for arbitration to the two Arbitrators namely Mr. Justice (R) Nasir Aslam Zahid and Mr. Justice (R) G.H.
4. Malik.
5. ' It appears that while the matter was before the arbitration tribunal, the counsel for the plaintiff submitted before the tribunal a settlement agreement dated 26-10-1994 made between the plaintiff and the defendant and it was stated by the counsel for the parties before the tribunal that the arbitration proceedings may be disposed of in terms of the said settlement agreement. The arbitration proceedings were disposed of in terms of settlement agreement with no order as to cost vide award, dated 18-3-2005. On 17-3-2006 the matter was fixed in Court when an application under Order XXIII Rule 3 C.P.C. Signed by defendant and defendant counsel was filed with the prayer that suit be decreed in terms of settlement agreement, dated 26-10-2004. With this application photocopies of settlement agreement and of the award of the arbitration tribunal were also filed. The Court decreed the suit in terms of compromise.
6. ' Mr. Ahmed Pirzada, learned A.A.-G. Who has appeared on behalf of applicant has contended that clause 5.2 of the decree is based upon misrepresentation and fraud inasmuch as the plaintiff has no power to grant exemption from levy of entertainment duty. He has further contended that the plaintiff in its letter, dated 23-5-2006 has also admitted such legal position. Mr. Qaiser Jameel learned counsel for plaintiff has submitted that the 'settlement agreement incorporated in decree is not illegal but only compliance of its clause 5.2 has to be made and the exemption from levy of entertainment duty can be granted by the Government of Sindh. Ms. Naheda Mehboob Ellahi, learned counsel for defendant has contended that no misrepresentation or fraud has been committed and the decree is in accordance with law. She has further submitted that under the decree the City Council is obliged to pass resolution of granting exemption from levy of entertainment duty. She has further submitted that the application filed by the Province of Sindh is not maintainable.
7. ' I have considered the submissions of learned counsel and have gone through the record.
8. ' The applicant appears to be aggrieved by clause 5.2 of settlement agreement which is incorporated in the decree and it reads as follows:-- "5.2 CDGK shall exempt the Park from entertainment duty at the earliest and the benefit of such exemption shall be passed on the public visiting the park."
9. ' It appears that entertainment duty is levied by section 3 of theEntertainment Duty Act, 1958 (the Act) and section 8(2) of the Act gives power to the Government (which is the Provincial Government in terms of clause (e) to section 2 of the Act) by general or special order exempt any entertainment or class of entertainments from liability to entertainment duty. On the basis of this provision, it is urged by the learned A.A.-G. That clause 5.2 of the decree is based on misrepresentation and fraud as no power is vested in the CDGK to grant exemption. On the other hand, it is argued by learned counsel for the plaintiff and defendant that by section 116 of Sindh Local Government Ordinance, 2001 (SLGO) the City Council is empowered to levy taxes etc., specified in the second schedule and by subsection (3) of this section the council also has power to increase, reduce, suspend, abolish or exempt any tax. On this basis it is argued that clause 5.2 of the decree is valid and only approval of Council for granting of exemption has to be sought. I am afraid that the arguments advanced from the side of plaintiff and defendant has no force for the reason that Part-II of second schedule to the SLGO enumerates 14 items on which City District Council may levy taxes, fees, tools etc. But such items do not include entertainment duty. Clause 11- G(H) of schedule-II to the Sindh Local Government (Conduct of Business) Rules, 2001 deals with subject of Excise and Taxation and provides that assessment and collection of taxes/duties and fees devolved to District Government, item No,1 of which is entertainment duty. Thus, by virtue of this provision in the rules, the subject of assessment and collection of Entertainment Duty apparently has devolved upon the District Government. Assessment. And collection of tax is a ministerial and administrative function to be performed for the implementation of the Act and by no means will it confer power on District Government to grant exemption from levy of Entertainment Duty. Reading of the above provision of the law -makes it clear that it is Provincial Government who is entitled to levy the Entertainment Duty and power to grant exemption from such levy also vest with the Provincial Government.
10. ' It was also argued that pursuant to section 14 of the Act government has delegated its powers under the Act to the City District Government Karachi and in this regard reference was made to the notification, dated 23-11-2005 issued by the Secretary Excise and Taxation Department of Government of Sindh. This notification provides that "the administrative and financial authority for the management of the offices of Excise and Taxation Department pertaining to Property Tax and Entertainment Duty stand devolved to the City District Government Karachi.......". The devaluation of administrative and financial authority for management of the office of Excise and Taxation Department pertaining to Entertainment Duty will not confer power by the government to the City District Government Karachi of grantingexemption from levy of Entertainment Duty. The financial authority apparently is of drawing and disbursing of money finances for the management of the office of Excise and Taxation Department pertaining to Entertainment Duty and not with regard to its levy or exemption.
11. ' Looked in the light of above state of law, apparently clause 5.2 of the decree by which the CDGK has represented to exempt the park from Entertainment Duty goes against the mandate of law as no such power is available to the CDGK. The decree to the extent of its clause 5.2 which makes such representation will be nullity in law.
12. ' I therefore accept this application and strike down clause 5.2 of the decree. Miscellaneous Applications are also disposed of.