Abdul Hameed Dogar, J.--By this judgment, we intend to dispose of the above 3 civil appeals which are directed against a common judgment dated 11.11.2003 passed by a learned Judge in Chambers of the Lahore High Court, Rawalpindi Bench, Rawalpindi, whereby Writ Petition Nos. 201 of 1997, 210 and 1358 of 2001 filed by the appellants were dismissed.
2. Briefly, stated the facts of the case are that Capital Development Authority (herein after referred to as "CDA") was set up under the Capital Development Authority Ordinance, 1960 (hereinafter referred to as the CDA Ordinance 1960"). In 1981 Islamabad Capital Territory (Imposition of Taxes)
Rules, ~1981 (hereinafter referred to as "Rules of 1981") were framed. On 07.5.1990 the Cabinet approved the levying of Property Tax in Islamabad Capital Territory on the basis of built up and plot areas of each property with effect from 1st July 1989 at the following rates:-- I. Industrial/Institution (Per Annum) Plot Area Rs. 0.50 per Sq.yd. Covered Area (Shed) Rs. 0.50 per sft Covered Area (Building) Rs. 0.80 per sft II. Residential Plots Plot Area Rs. 1.00 sq.yd Covered Area Rs. 1.50 per sft III. Commercial Plots Plot Area Rs. 3.00 per sq. yd Covered Area Rs. 5.00 per sft IV. Petrol Pump On plot area only Rs. 10.00 per sq.yd Government of Pakistan vide S.R.O. No. 806(1)/1991 dated 20th August 1991 levied property tax at the rates mentioned above in Islamabad with immediate effect. Accordingly. CDA vide letter dated 10.3.1994 issued notices demanding payment of property tax from the appellants, owners of Hotels, Motels and Restaurants in Islamabad Capital Territory, with effect from 1991 at commercial tariff.
Since appellants did not make payment as such on 20.12.1995 Revenue Officer of CDA issued notice under Section 49 of the CDA Ordinance 1960 for recovery of outstanding dues as arrears of land revenue. At the first stage appellants objected notice of demand on the ground that since notification dated 20.8.1991 has been superseded by Notification No. CDA-30(9)(Noti)-Coord/ 94/695 dated 21.6.1995 as such arrears cannot be demanded with retrospective effect. They further claimed that hotel is "non-residential" property which can only be classified. as "industrial/institution". In support of their claim they referred to Office Memorandum dated 22.7.1990 issued by Government of Pakistan, Ministry of Industries & Production (Industries Wing) whereby appellants' establishments i.e. Hotels/Motels have been declared as industry. Water and Power Development Authority (WAPDA) vide its letter dated 22.9.1990 charged hotels/lodges and restaurants with tariff A-2 treating them as an industry. They also placed reliance on SRO No. 178(1)/94 issued by the Ministry of Petroleum and Natural Resources in pursuance of which M/s. Sui Northern Gas Pipelines and Sui Southern Gas Company have treated hotel/motels under the heading of Industrial Consumers. On 21.1.1998 appellants also made representations before Government of Pakistan, Cabinet Division, Islamabad in connection with charging of Industrial rates instead of- commercial rates. On 25.2.1998 Deputy Director (Commercial) CDA informed appellants that their representations have been rejected. On 10.3.1998 again demand notices were issued to the appellants with the direction to deposit the outstanding dues by 10th of April, 1998, otherwise recovery proceedings would be initiated against them. Appellants also filed review petition under Section 114 CPC read with Order XL1I Rule 1(a), (b), (c) CPC 1908 before Secretary to the Government of Pakistan challenging the rejection of their representations. Feeling aggrieved appellants invoked the constitutional jurisdiction of Lahore High Court challenging the imposition of tax, rejection of their representations and the notices for payment of tax by filing Writ Petitions No. 201 & 1358 of 2001 and 201 of 1997 which were heard alongwith six other writ petitions and were dismissed vide impugned order. Only appellants have assailed the judgment before this Court.
3. Leave to appeal was granted by this Court on 27.4.2004 to consider inter alio, as to whether property tax on hotels, motels and restaurants the appellants' establishments would be charged at commercial rates or industrial one.
4. We have heard Syed Asghar Hussain Sabzwari, learned counsel for the appellants (in CA Nos.
424 and 425 of 2004), Mr. Fakharuddin G. Ebrahim, learned Sr. ASC for appellant (in CA No. 578 of 2004), and Mr. M. Arif Chaudhry, learned counsel for the respondents and have gone through the record and the proceedings of the case in minute particulars.
5. Learned counsel for the appellants vehemently contended that property tax is not leviable on Hotels & Restaurants under commercial tariff as they have been declared as industry by Ministry of Industries & Production, Water & Power Development Authority and Ministry of Petroleum. He further contended that as per tourism policy, all tourism facilities would be treated as industrial concern and would qualify for the same benefits, concession and treatment as is extended in other recognized industries. According to learned counsel, appellants are being treated discriminately and the right to be treated equally is denied by the respondents inasmuch as in no other Municipal Corporation and Municipal Organization the Hotels, Motels and Restaurants are being applied commercial tariff at such an exorbitant rates. He further contended that commercial properties located in specified areas are to be charged on the said rates whereas Industrial/Institutions are to be charged separately. The acts of respondents, therefore, are violative of Articles 4 and 25 of the Constitution of Islamic Republic of Pakistan, 1973. Mr. Fakharuddin G. Ebrahim, learned counsel for appellants in Civil Appeal No. 578 of 2004 vehemently contended that Rules of 1991 were never implemented nor there was any sanction of law behind them. He contended that vide notification of 1995 property tax in question has been levied with immediate effect yet CDA is claiming arrears from the appellants. He further contended that levy of property tax in Islamabad was notified by the Federal Government w.e.f. 1991, however, another notification was issued by the CDA in 1995, thus 1991 notification stood superseded and no demand of property tax can be raised there under.
In view of this, CDA can only levy, and recover property tax from 1995 and not with retrospective effect. He further contended that CDA without any justification repelled all their legal objections and insisted on payment of the accumulated arrears.
6. On the other hand learned counsel for. CDA controverted the above contentions and supported the impugned judgment. He contended that disposal of land vesting in CDA is dealt with by Section 49 of the CDA Ordinance. He further contended that Islamabad Land Disposal Regulation 1993 (hereinafter referred to as 'the Regulation') vide Regulation No. 3 has classified the plots into different categories: Hotels/motels have been defined in the category of commercial and business plots and are charged- under commercial tariff. He further contended that orders or notifications of the Federal Government under other laws declaring the hotel as industry would not affect the nature of the building or use of the plot as defined in the Regulation, the business of a hotel is .a commercial enterprise and would not change its inherent character of commercial enterprise. It is the use of the property which would determine the rates of tax to be applied thereto. Wherever a hotel or commercial property is situated in any part of Islamabad could be taxed as commercial property. He further contended that vide Notification No. 783(1)/2003 dated 09.8.2003, non- residential properties outside commercial areas have been included in the heading `Commercial'.
In support of his contentions, he placed reliance on the case reported as Mrs. Bilquis Anwar Khan and 39 others Versus Pakistan through Secretary, Cabinet Division, Government of Pakistan, Islamabad and 3 others (2001 SCM R 809).
7. We have considered the arguments of learned counsel for the parties, as will the relevant provisions of law. In exercise of its powers under Section 15-A read with Section 50 of the CDA Ordinance the Federal Government vide SRO No. 95(1)/82 dated 28.1.1982 framed and promulgated the Rules under which Notification No. 805(1)/91 was issued on 20.8.1991 specifying .the area in which CDA was to perform municipal functions. By another Notification No. SRO 806(1)/91 dated 20.8.4991 Federal Government sanctioned the levy of property tax in Islamabad at the rates and on the conditions mentioned herein above. This SRO was superseded by SRO No. CDA. 30(9)(Noti)- Coord/94/695 dated 21.6.1995 whereby CDA with the sanction of Federal Government levied tax at the rate of one twelth of the annual value of the buildings and lands. It would be appropriate to reproduce Regulation No. 3 of the. Regulation showing classification of commercial and business plots: "(2) Commercial and Business plots.--Plots located in commercial areas meant for Use as markets, departmental stores, shops, business offices, restaurant, cafes, hotels, cinemas, threatre, motels, marriage hall, petrol filling stations, incidental shops corners and include flat-sites in such areas whether or without shops and offices etc. Whereas industrial plots have also been defined in clause (5) of Regulation No.3 of the Regulation which reads as under:-- "(5) Industrial plots--These plots shall cater for the following:-- (i)Very light industry and trading associated with residential areas e.g. laundries, repair shops, bakeries etc, I&T centers.
(ii)Light manufacturing and servicing industries essential for the need of the city at large and those created for the constructional works to be carried out in the areas as may be specified by the Authority.
(ii) Extractive industries, mining, quarrying and crushing and brick-kilns in area as may be specified by the authority.
'The question with regard to legality of imposition of property tax in Islamabad has already been determined by this Court in case of Mst. Bilquis referred supra. Several Office Memorandums or notifications being relied upon by the appellants would show that concerned authorities like WAPDA, Ministry of Oil and Gas or the Ministry of Tourism have included the hotel/motels in the term 'industrial' for the application of relevant laws. On the other hand it is also evident that no statutory enactment has been made in the CDA rules whereby hotels/motels situated in the jurisdiction of CDA has been included in the term 'industry', 'industrial' or 'institution', as such appellants cannot claim such relief. The appellants were allotted commercial plots for the construction of hotels. The orders or notifications issued by Federal Government under other laws declaring business of hotel as industry would not affect the nature of building or use of plot as defined in the Regulation No. 3 of CDA. Irrespective of above, an amendment has also been made in Notification No. 24(l)/2001 dated 11.1.2001 through Notification No. 783(1)/2003 dated 09.8.2003 whereby non-residential properties outside commercial areas have been included in the heading `Commercial'. Thus finding of learned High Court that until no statutory enactment declaring hotel/Motels and Restaurant located in Islamabad Capital is made by competent authority appellants cannot as a matter of right claim to be charged at that rate, is quite unexceptionable.
8. Accordingly, the appeals being devoid of any substance are dismissed with no order as to costs.