' ZAFAR AHMED KHAN SHERWANI, .1.---Through this common judgment, I intend to dispose of the above mentioned suits on the single legal issue that whether these suits are Maintainable under the law, if yes, then what should the decree be, because the learned counsel for the parties voluntarily agreed not to lead any evidence as no factual controversy is involved in these suits as claim of damages has been withdrawn by the learned Advocate for the plaintiff in Suit No 1556 of 1997 through separate statement.
' The brief facts leading to these suits are that the plaintiff in suit No,1556 of 1997 for recovery of damages amounting to Rs,10 Million, contended that it was granted a contract for collection of Octroi on the goods imported in and utilized in the jurisdiction of Union Council Gadap, District Malir vide Union Council of Gadap letters referred to in the suit. During the contract period i.e, 1-7-1995 to 30-7-1996 and 1-7-1996 to 30-7-1997 the defendant (WAPDA) brought a number of articles which were chargeable for Octori duty but failed to pay the same in spite of such demands on the promise to pay the same later on. The details with regard to outstanding dues amounting to Rs,1,07,22,579 have been given in the plaint. On that account, the plaintiff stopped the WAPDA from importing the electrical goods, which instigated it to lodge a complaint before the Deputy Commissioner Malir, where a number of issues were raised and finally it was decided that a cheque amounting to Rs,10,00,000 would be accepted in lieu of the arrears of dues, whereas for the remaining balance, an undertaking was to be provided by Chief Engineer along with the schedule of the payment. Other terms were also agreed upon by the parties, which have been mentioned in the plaint, (need not be produced for the brevity sake). It has been alleged that in spite of the decision the WAPDA failed to clear the dues and only paid a sum of Rs,14,42,202 through two different cheques leaving outstanding of Rs,92,80,377. Repeated demands in that regard could also not bear the fruit, hence the suit was filed.
' The case of the WAPDA, as pleaded in the written statement, was that it being a statutory body and carrying on its functions for and on behalf of the Government of Pakistan, as such, its properties vest in the Federal Government and thus exempted from levy of the octroi tax. It was also pleaded that the Provincial Coordination Committee, which was formed in order to forge coordination and cooperation between the four provinces of the federation and its capital in its meeting held on .11-4-1993 under the chairmanship of Senior Minister, Government of Pakistan, inter alia, decided that the Provincial Government would exempt WAPDA from payment of property tax and the octroi on its equipments and materials. It was also decided that WAPDA would charge electricity tariff on street lights and drinking water schemes under its purview throughout the country on its domestic rates, therefore, it was prayed that the suit was incompetent and liable to be dismissed.
' In the Suit No 1135 of 1998 filed by WAPDA for recovery of Rs,7,236,934,671, it was pleaded that the defendants had charged the said amount illegally from time to time towards octroi on the same ground as aforesaid mentioned, whereas defendants put their same claim as they pleaded in their own suit. It was also pleaded that it has been decided by this Court in C.P. No,660 of 1986 that WAPDA was liable to pay octroi, which order became final as no appeal was filed.
' I have heard the learned Counsel for the parties and perused the record.
' It was contended by the learned Counsel for the plaintiff that in view of the findings given by this Court in C.P. No,660 of 1986 as referred to above, the question of payment of octroi by WAPDA has been settled as no appeal against the said judgment was preferred. It was also contended that in the said C.P. The WAPDA has made a compromise with the petitioner admitting the liability of payment towards octroi and relied upon the order passed on such compromise application, whereby the offer to pay the amount due towards it in instalments was accepted.
' On the other hand, the learned Counsel for WAPDA contended that firstly no octroi duty is payable on the items imported by WAPDA being a statutory body performing functions under the control of the Federal Government and relied upon the cases reported in WAPDA v. Government of Sindh (PLD 1998 Karachi 209). He also contended that the Suit No,1556/1997 filed by the plaintiff as a sole proprietorship, which is not a legal body and cannot sue as such but can be sued as provided under Order XXX, Rule 10, C.P.C. He has relied upon the case of the Collector of Customs v. Messrs Imran Enterprises (2001 CLC 419), The Chief v. Union Cooperative Club Limited (1997 CLC 187), Province of Sindh v. M/S Royal Contractors (1996 CLC 1205) and Messrs Karim Development Corporation v. Messrs Razi Construction Company Limited (PLD 1995 Karachi 153).
' He lastly contended that even if some officer of WAPDA had made compromise illegally as referred to by the learned advocate for the plaintiff, the same has no effect being erroneous. He has relied upon the case of Barkhurdar v. Muhammad Razzaq (PLD 1989 SC 749), Qabil Shah v.
Shaday (PLD 1992 Peshawar 144).
' In rebuttal the learned Advocate for the plaintiff contended that the objection raised by the learned Advocate for WAPDA that the suit No,1556 of 1997 has been filed by an unregistered proprietary concern, he submitted that inadvertently it has been written so, in the title, in fact it has been filed by Ghulam Murtaza, a sole proprietor to Messrs Pub Corporation and necessary amendment can be made in the title of the plaint, which will not involve substitution or addition of pleadings, therefore, S.22(1) of the Limitation Act will not be applicable. He has relied upon the case of Ismail Haji Sulaiman v. Messrs Hansa Line (PLD 1961 Dacca 693). Replying the argument of the learned advocate for the WAPDA that the being a statutory organization it is exempted from payment of octroi and taxes; he referred the case of Union Council Ali Wahan v. Associated Cement (Pvt.) Ltd. (1993 SCMR 468) and contended that any statutory organization being engaged in government activities, therefore, invoking the doctrine of lifting the veil of incorporation in such a case to enable the company to have the benefit of Article 165 of the Constitution, would place the company in an advantageous position to the detriment of the companies which were also engaged in manufacturing and the sale as they would not be entitled to the benefit of exemption of octroi which would be violative of, inter alia, Article 25 of the Constitution, therefore, grant of exemption to the company by lifting the veil of incorporation would not, in way, foster the cause of justice but in fact retard the development of the rural area.
' I have carefully considered the above arguments in the light of the record.
' In the first instance let it be decided by invoking the doctrine of lifting the veil of incorporation that whether WAPDA being a statutory organization. It came into being on account of promulgation of West Pakistan Water and Power Development Authority Act, 1958. It is a corporate body having its own charter. It is subject to administrative control of the Federal Govt. And final scrutiny by National Assembly as its audited accounts are to be placed before Public Accounts Committee for scrutiny and examination. By way of amendment through the Pakistan Water and Power Development Authority (Amendment Act) 1964 far reaching amendments have been brought in the original Act of 1958 to convert WAPDA into a modern, viable and dynamic corporation. The scope of its activities has been considerably enlarged. It may privatize or otherwise and restructure any operation other than hide generation power stations and National Transmission Grid. It may enter into a joint venture, inter alia, with any other corporation/Company and, it may even purchase bulk power from private sector. Reliance is placed on the case of M/S Go down Textile Mills v. WAPDA (1997 SCMR 641).
' In the case of WAPDA v. Administrator, District Council, Swabi (2005 SCMR 487) the question of exemption of taxes in respect of a project to be executed by the WAPDA came for examination and after survey of cases including the case of Union Council (supra) relied upon by the learned advocate for the plaintiff following was held:-- "6. The crux of appellant's case as argued before us is that WAPDA, due to executing a project of and on behalf of the Federal Government, its properties and income etc. Is exempt from taxation under Articles 165 and 165-A of the Constitution. Let us see how far, in the circumstances of the present case aforesaid provisions of the Constitution are attracted.
7. Starting with sub-Article (1) of Article 165, it pertains to the properties owned by and the income, as such, of the Federal Government and the Provincial Governments. It simply lays down that no tax can be levied on the properties and income of the Federal Government by Provincial Legislatures and no property of a Provincial Government can be subject to tax either by the Parliament or by any other Provincial Assembly. This sub-Article does not cover the peculiar situation in hand.
8. Sub-Article (2) of Article 165 provides that if a trade or business of any kind is carried on by or on behalf of the Government of Province outside that Province, the Government carrying on such trade or business can be taxed under Act of Parliament or under Act of Provincial Assembly of the Province in which that trade or business is carried on. In the present case no trade or business is carried on by Government of one Province outside that Province. Here Ghazi Barotha Hydropower Project is executed on behalf of the Federal Government and hence sub-Article (2) of Article 165 is also not applicable. The advantage of working on behalf of some Government is available only in this sub-Article (2) of Article 165, which, as remarked earlier, is not attracted in the instant claim.
9. Coming to Article 165-A, it undoubtedly provides that the Parliament has power to make a law to provide for the levy and recovery of a tax on the income of corporation, company or other body etc. This categorically deals with the levy of income-tax. Whereas, in the instant case the tax is being levied on the export of produce which are located within the limits of a District Council. Not dealing with the question of income tax in the present case, Article 165-A is also not applicable.
10. This Court in case of Daewoo. Corporation (2001 SCMR 1012) has already held that quarrying of stones and the like material like gravel and sand, is covered by the expression 'produce' and is taxable.
11. Again this Court in case of Union Council v. Associated Cement (1993 SCMR 468 at page 480 para. 12) has categorically held that the lifting of the corporate veil as such is no longer permissible and the distinct juristic personality of the incorporated or statutory body has been recognized notwithstanding the control, the destination and the functioning of such bodies. This was with regard to previous remarks of this Court in case of Karachi Development Authority decided on 29- 12-1991 but reported in (2005 PTD 2131). In the circumstances, we are of the view that the appellant cannot derive benefit from either Article 165 or from Article 165-A of the Constitution.
12. This was with regard to the grounds, as such, of the exemption but another very important aspect of the case is altogether different and not at all related to the aforesaid exemptions. The fact is that the District Council has imposed export tax and educational cess not on WAPDA -but on Ghazi Barotha Contractors, and the same had continuously been paid for a long time. The contractors, by no stretch of imagination or arguments can equate them with the Federal Government nor have they claimed so. This is proved by their conduct of having paid such tax for a considerably long time, constituting against them estoppel as well. The WAPDA has stepped in merely because such payments are to be reimbursed by it to the contractor. This reimbursement is a pure and personal contractual liability shouldered by WAPDA itself in para. 9 of written contract.
The learned High Court has elaborately dealt with this aspect of the case. Rather this aspect has mainly prevailed with the High Court while dismissing the writ petition. We fully agree that the actual imposition of the tax is on the contractor who cannot be exempted therefrom. Whatever WAPDA has undertaken qua the reimbursement thereof is a pure contractual liability and now it cannot be evaded on the pretext of exemptions, which otherwise are not available. On the one hand, WAPDA realizes that various taxes or cesses are most likely to be imposed on the contractor but when so imposed as well as recovered, the reimbursement thereof is now practically avoided."
Coming to the present case, the plaintiff in para. No,5 of the plaint has made the following averments, which are reproduced below:-- "5. That the issues, as enumerated above were discussed. The Plaintiffs and so also the Defendants presented their respective case before the D.C. The D.C., after hearing the parties, gave decision wherein it was held:--
(i) The cheque amounting to Rs,10 lacs would be accepted by the contractor (the Petitioner) in lieu of part of the blocked payments. The contractors had earlier refused this payment. As regard, rest of the payments, Chief Engineer, WAPDA would give an undertaking by 31-3-1996 in which a schedule of payments would be given.
(ii) The dispute between the two parties regarding octroi rates would be referred to the competent authority for arbitration pending which the contractors would receive payments at 3% to 5% WAPDA would pay the balance amount to the contractor presently collecting octroi. It was decided in clear terms that the balance, if any, would be paid to the present contractor and not to the Union Council. In this regard, the Chief Engineer WAPDA would give another undertaking by 31st of March, 1996.
(iii) It was also, decided that WAPDA would ensure that in future the payments of dues is made in a smooth and expedious manner. The parties in the course of the afore-referred meeting, agreed to honour the decision of the D.C. Further, the plaintiff agreed, as a genture of goodwill, to accommodate and allow defendants to pass through and take their electrical goods within the octroi jurisdiction of the Council. The defendants, on the other hand, committed themselves to honour their side of the agreement, which amongst others, included:
(a) to pay a cheque of Rs,10 lac;
(b) to issue an undertaking by 31-3-1996, wherein a schedule of payment would be given;
(c) to refer the dispute to the competent authority for arbitration to settle the matter of appropriate classification and consequently to fix rates accordingly; and
(d) to ensure that in future, payments of dues is made in a smooth and expeditious manner. True copy of Minutes of the Meeting bearing No,DC/AI/JB/ 839/96 dated 22-3-1996 chaired by the D.C. Is annexed hereto and marked; "D."
In reply to the above averments, the WAPDA in its written statement has given the following reply: "4. As regards the contents of paras. 4, 5, 6 & 7, as submitted in para. 3 above the octroi tax was not leviable on WAPDA's Equipments and materials. The alleged proceedings by the Deputy Commission Malir and his alleged decision was coram non judice having no legal effect and not binding on WAPDA. The alleged undertakings by the officers of WAPDA were mistakenly made and were subject to legal entitlement of the plaintiff to claim octroi tax on WAPDA's Equipments and Materials."
' From the above reply it is clear that the WAPDA has not denied the meeting between the two parties in the office of the Deputy Commissioner and in consequence thereof part payment of the outstanding bill of the plaintiff by the WAPDA; therefore, now it cannot be pleaded that WAPDA is not liable to pay the outstanding dues as claimed by the plaintiff.
' In the similar situation in the unreported case of WAPDA v. Government of Sindh (C.P.No,D- 660/1986) relief upon by the learned Advocate for the plaintiff this Court has held that: "The petitioners have objected to the recovery of octroi tax by the H.D.A. And Pipri Union Council
(Dadu) on the goods which are brought within their local limits on the ground that these goods only pass through the limits of the said council and corporation in transit. There is nothing on the record before us to show that Union Council Pipri or Hyderabad, Municipal Corporation are charging octroi tax on building material which passed through their respective limits in transit. On the contrary the pleading and record clearly show that octroi tax is charged by the Union Council Pipri and Hyderabad Municipal Corporation on goods and material which is brought in their respective limits by petitioner for consumption there. There is no merit in the above petition which are accordingly dismissed but in the circumstances of the case, we made no order as to costs."
' In that case it was never pleaded that WAPDA was exempted from payment of octroi duty being a statutory body under Federal Government.
In the present case in which such plea was taken by the WAPDA but the plaintiff's demand which was partly fulfilled by the WAPDA as per its own case. I am therefore of firm view that the WAPDA is not exempted under Articles 165 and 165-A of the Constitution of Pakistan from any tax and octroi as laid down by the Hon'ble Supreme Court in WAPDA case supra (2005 SCMR 487) and therefore this Court cannot exempt it from payment of taxes and octroi by the application of the doctrine of lifting the veil of incorporation.
The next question with regard to filing of Suit No,1556 of 1997 by an unregistered firm as sole proprietorship concern. In this regard the argument of the learned advocate for the plaintiff that inadvertently and due to typing mistake the parties have been misdescribed and error has occurred in designating the party in the plaint, hence the plaintiff Ghulam Murtaza has filed the suit but it has been Muhammad Yousuf, a sole proprietor of Messrs Pub Corporation and the misdescribed as Messrs Pub Corporation in fact it should be "Ghulam Murtaza son of" mistake can be corrected being bona fide and the amendment will not involve substitution or addition of party and therefore. Section 22 of the Limitation Act will not be applicable, has immense force keeping in view the contents of plaint including its verification clause of the plaint in the said suit. It shows that plaint has been verified on oath by the said Ghulam Murtaza as the plaintiff and not as sole proprietor of Messrs Pub Corporation. Hence the misdescription of the plaintiff in the plaint which appears to be bona fide typographical error which can be corrected by amendment in its title even with red ink and such amendment will not involve substitution or addition of party,. Reliance is placed on Ismail Haji Sulaiman case supra (PLD 1961 Dacca 693).
From the above discussion it is clear that the plaintiff has a right for the decree in his favour in terms of prayer clause (a) with costs, whereas the WAPDA is not entitled to the relief as prayed in its Suit No,1135 of 1998, which is dismissed with costs.