Syed AIZAD HUSSAIN and others vs MOTOR REGISTRATION AUTHORITY and

ANWAR ZAHEER JAMALI, J.---The above captioned three civil petitions for leave to appeal are directed against the common judgment dated 24-12-2009, passed by a learned Division Bench of Lahore High Court, in Writ Petition No,8886 of 2008, whereby the said petition along with a bunch of 225, other identical writ petitions, challenging the vires of section 6 of the Punjab Finance Act, 2008 (Act I of 2008) on various legal grounds, were dismissed. As the controversy involved in these petitions is same, we, therefore, propose to dispose of these petitions by this single judgment.

2. Succinctly, relevant facts of the case are that by virtue of section 6 of the Act I of 2008, in the Province of Punjab, tax titled "Tax on imported luxury motor cars" was levied on two categories of motor cars, specified in the schedule provided therein. For ease of reference, the said provision of law is reproduced as under:-- "Tax on imported luxury motor cars.---(i) Subject to this section, the Government shall levy a onetime tax on an imported motor car of a specified category registered in the Punjab after 30th June, 2005.

(2) The categories of the imported motor cars and rates of the tax shall be such as provided in the Schedule.

(3) The Government shall not levy the tax, if the motor car is--

(a) owned by the Federal Government or the Government;'

(b) a transport vehicle or a motor vehicle with seating capacity exceeding ten;

(c) exempt from taxation under the Punjab Motor Vehicle Taxation Rules, 1959; and

(d) a motor vehicle or class of motor vehicles notified by the Government.

(4) An owner, occupant, or keeper of the motor car shall be liable to pay the tax.

(5) An owner, occupant, or keeper of the motor car shall, within the prescribed period, submit a statement to the officer authorized by the Government and in the prescribed manner which shall contain:

(a) the engine capacity of the motor car;

(b) the date of registration of the motor car;

(c) the amount of tax leviable on the motor car;

(d) the proof of payment of the tax; and

(e) any other information as may be prescribed.

(6) If an owner, occupant or keeper fails to submit the statement within the prescribed time or fails to pay the tax despite an order passed by the authorized officer, the owner, occupant or keeper shall be liable to pay, in "addition to the tax", a penalty not exceeding the amount of the tax, as may be determined by an officer authorized by the Government.

(7) The tax shall be assessed, collected and recovered in the prescribed manner.

(8) The Government may, within one year, revise an order passed or proceedings conducted under this section and the order of the Government shall be final.

(9) A person shall not challenge any order passed or proceedings being conducted under this section before any Court or forum except as provided under this section and no suit, application or petition shall lie to any Court against an order or proceedings under this section.

(10) In addition to any other mode for recovery of the tax or penalty levied under this section, it may be recovered as arrears of land revenue under the Punjab Land Revenue Act, 1967 (XVII of 1967).

(11) The Government may, by notification in official Gazette, make rules for carrying out the purposes of this section.

(a) In this section "motor car" means a motor car as defined in the Provincial Motor Vehicles Ordinance, 1965 (XIX of 1965) and includes a station wagon and jeep;

(b) "prescribed" means prescribed by the rules made under the section;

(c) "Schedule" means the Schedule appended to this Act; and

(d) "tax" means the tax levied under the section; SCHEDULE [See Section 6 (2)] S.No,Category of motor car Rate of Tax

1. Imported motor car with engine capacity from 2000 cc to 3000 cc.Rs.200,000

2. Imported motor car with engine capacity exceeding 3000 cc. Rs.300,000

1. The petitioners being owners, occupants or keepers of imported motor cars failing within the ambit of such taxing provision of Act 1 of 2008, and many others in like position, aggrieved by it, challenged the legality of such levy in their respective writ petitions before the Lahore High Court mainly on the following grounds:-

(a) Under Articles 70(a) and 142(a) of the Constitution of the Islamic Republic of Pakistan read with entries No,43 and 49 of the Federal Legislative List, provided in IVth Schedule thereof, the impugned tax could only be levied by an Act of the Parliament and thus, Provincial Legislature has no competence in this behalf.

(b) All the petitioners, whose motor cars fall in the two categories of the above schedule, have already paid huge sums to the Federal and Provincial governments and Motor Registration Authority under different heads of duties, taxes and fee, including 4% of the gross value of their motor cars as registration fee, therefore, under the garb of this new tax on the imported motor cars, termed as "Luxury Cars" which are registered in the Province of Punjab after 30th June, 2005, recovery of such tax is unjustified, discriminatory in nature and amounts to double taxation, which is prohibited in law.

(c) The impugned provision of tax under Act I of 2008, in reality, is fee and not a tax, which cannot be legally levied through Provincial legislation by labelling it as "Tax on imported luxury motor cars"

(d) The imposition of tax under section 6 of Act 1 of 2008, with effect from 30-06-2006, is a taxing provision with retrospective applicability, which is unwarranted by law.

(e) The levy of such tax is a classic example of discrimination as the classification laid down for this, purpose is irrational. Many luxury motor cars such as Mercedes Benz and BMW, frequently imported by elite class of the country, having less than 2000 cc. Engine capacity, though much higher in cost in international market, have been left untaxed under this scheme, without any rationale for such exclusion.

4. Dilating upon the above grounds, Mr. Saud Nasrullah Cheema, learned counsel for the petitioner in C.P.L.A. No,366-L/2010, vehemently contended that the retrospective applicability of section 6 of Act I of 2008 with effect from 30th June, 2005 is unprecedented and beyond the legislative authority of the provincial government, thus, a nullity in law. He further contended that said levy of tax is in violation of Articles 25 and 77 of the Constitution of Islamic Republic of Pakistan, 1973 as there is no logical or rational categorization of luxury motor cars for burdening the present petitioners with the levy of such tax and excluding many others having more luxurious and costly motor cars at their disposal, like Mercedes Benz and BMW, having engine capacity of less than 2000 cc or one, having been registered with the motor vehicle registration authority Punjab, before the target date i,e, 30th June, 2005. He further strongly criticized the retrospective applicability of such tax on the petitioners, who were already out-pocketed with heavy sums towards duties and taxes under different heads at the time of import and subsequent registration of their motorcars in the Province of Punjab. More so, when in the other three provinces of the country, no parallel levy is in force, which is recoverable only in the Province of Punjab in terms of section 6 of the Act I of 2008.

5. Mr. Azhar Siddique, the other learned counsel representing the petitioners in CPLAs Nos.753- L/2010 & 811-L/2010, while endorsing the above submissions of the learned counsel, added that combined reading of entries Nos.43, 44,47,49 & 52 of the Federal Legislative List, under Fourth Schedule of the Constitution, will show that powers for levy of such tax were not available under the domain of provincial legislative body, thus its recovery cannot be enforced against the petitioners and other motor car owners, who were affected by such levy of tax on registration of their motor cars after 30th June, 2005 in the province of Punjab. He also dilated upon the concept of "Luxury" in the modern day life and urged that many things which used to be considered in the past as "Luxury" are now only considered as necessities of life or at best comforts of life, thus the introduction of impugned taxing provision on so-called theory of "Luxury" has no credibility or moral justification, particularly when focused from the angle of discrimination, with reference to only the engine capacity of such motor cars. Learned counsel further made reference to some provisions of the Indian Constitution in order to gain support for his submissions about the illegality committed by the Provincial legislature in enforcing such tax in the province. However, when he was confronted about the non-availability of such parallel provisions in the Constitution of Pakistan, he candidly conceded and did not dispute that the ratio of some cases from Indian jurisdiction, which he intended to refer, will have no bearing upon the merits of these cases, due to such marked difference in the statutory and co constitutional provisions. In the end, to fortify their respective submissions, learned counsel made reference of following cases:-

(a) Sayphire Textile Mills Ltd. v. Government of Sindh (PLD 1990 Karachi 402)

(b) Federation of Pakistan v. Shaukat Ali Mian (PLD 1999 SC 1026)

(c) Charanjit Lal v.Union of India (AIR 1951 SC 410)

(d) Harjina & Co. v., Islamic Republic of Pakistan(1993 SCMR 1342)

(e) Raja Industries Ltd. v. Government of Punjab (1999 MLD 3141)

(f) Express Hotels (Pvt.) Ltd. v. State of Guajrat (AIR 1989 SC 1949)

(g) A.B.Abdul Kadir v. State of Kerala (AIR 1976 SC 182)

6. Conversely, Mr. Saeed Yousaf Khan, Additional Advocate-General Punjab, in order to support the impugned judgment of the Lahore High Court, squarely relied upon the detailed reasoning recorded in it by the learned Division Bench of Lahore High Court. He concluded his submission with the note that all the contentions raised before this Court and some other contentions raised by the learned counsel before the Lahore High Court in other connected writ petitions, were thoroughly discussed and comprehensively answered in the impugned judgment, which is based on sound legal principles, duly supported with relevant case-law. Thus, no case for grant of leave to appeal is made out in these petitions.

7. We have carefully considered the submission of the learned counsel and perused the material brought on record by the parties. We have also gone through the impugned judgment of the learned Division Bench of Lahore High Court, which goes to show that without exception all the contentions raised before us have been thoroughly discussed and repelled by the Court in its impugned judgment with specific reference to some relevant provisions of our constitution and case-law on the subject.

8. We have given serious consideration to the above noted submissions of the learned counsel, but have not been able to convince ourselves about the merits of any such submissions. A combined reading of Article 142(a), (b) and (c) of the Constitution together with the Federal Legislative List and concerned Legislative List , provided in Part-I and II of the Fourth Schedule, in terms of Article 70(4), with particular reference to its various items referred to above by the learned counsel, show that looking to its nature the impugned tax levied under section 6 of the Act I of 2008, to the exclusion of Article 142(a) and, by dint of Article 142(c), falls within the competence of Provincial Legislature to levy one time tax of such nature. Thus, no exception could be taken to such valid piece of legislation. Learned counsel when confronted with this factual and legal position, revealing constitutional validity of impugned levy of tax by the Provincial Legislature, had no plausible reply to rebut this position. In the same context, it will be pertinent to mention here that while dealing with the issue of Constitutional validity of a piece of legislation, the Courts must not lose sight of one important principle of interpretation of statute that a law should be saved rather than destroyed, and for this purpose the Courts, A as far as possible, should lean in favour of upholding the Constitutionality of a legislation, keeping in view the rule of Constitutional interpretation that there is presumption in favour of Constitutional validity of legislative enactment, unless ex facie it is violative of some Constitutional provision. In doing so, the judicial approach should be dynamic rather than static, pragmatic and not pedantic, and elastic rather than rigid, as explicitly discussed and held in the case of Elahi Cotton Mills (Pvt.) Ltd. v. Federation of Pakistan (PLD 1997 SC 582). The submission of learned counsel Mr. Cheema, about the levy of impugned tax only in the Province of Punjab from the angle of discrimination, is equally devoid of force as no valid legislation made by any Provincial Legislative body can be struck down on this account, as such legislative bodies, for enactment of Provincial laws, have independent powers, leaving no room for comparison on the yardstick of discrimination. Similarly, submissions of the learned counsel as regards nature of levy, being fee and not tax or being wrongly labelled as "luxury", have no foot hold, as mere assertion of the petitioners in this regard, without looking at the ground realities and actual impact of such legislation, is of no consequence.

9. As regards the retrospective applicability of such taxing provision of law with effect from 30th June, 2005, a reference to the case of Molasses Trading and Export (Pvt.) Limited v. Federation of Pakistan (1993 SCMR 1905), will be useful as in this judgment in the context of interpretation of statutes, its retrospective applicability qua infringement of vested rights, was discussed in detail and following observations were made:- ....It is agreed on all hands that the well settled principles of interpretation of statutes are that vested rights cannot be taken away save by express words or necessary intendment. It also cannot be disputed that the legislature, which is competent to make a law, has full plenary powers within its sphere of operation to legislate retrospective or retroactively. Therefore, vested rights can be taken away by such a legislation and it cannot be struck down on that ground...."

10. If any further case-law is needed to fortify the above view, reference to another judgment of this Court in the case of Haider Automobile Ltd. v. Pakistan (PLD 1969 SC 623) can be made with full advantage, which lays down as under:- ....I would entirely agree with him that a vested right cannot be taken away save by express words or necessary intendment. The legislature, however, which is competent to make a law, has full and plenary powers in that behalf and can even legislate retrospectively or retroactively. There is no such rule that even if the legislature has, by the use of clear and unambiguous language, sought to take away a vested right yet the Courts, must hold that such a legislation is ineffective or strike down that Legislation on the ground that it has retrospectively taken away a vested right...."

11. For the same reason submission of the learned counsel as to the harshness of the nature of levy due to its retrospective applicability, also has no force. The other submission of the learned counsel about the discriminatory nature of the impugned tax on naming it as "Luxury tax" has no factual basis to hold the ground, as the classification made under the impugned legislation i,e, section 6 of the Act I of 2008 is based on rational criteria of engine capacity of the motor cars with specific exemption provided to certain categories of motor cars in subsection (3) ibid. For this reason, the impugned taxing legislation cannot bet termed as violative of Article 25 of the Constitution, nor the use of title "Luxury tax" has any material significance to help the case of petitioners. The plea raised by most of the petitioners before the Lahore High Court about payment of several other Federal and Provincial taxes and duties, besides, huge registration fee, may have some force on moral side to extend sympathies to such owners, occupants and keepers of motor cars, which fall within the ambit of taxing provision, but legally and technically, the effect of a statute, once made in accordance with law, cannot be diluted on such account. The learned Division Bench of Lahore High Court in its impugned judgment has very aptly made reference to several judgments of this Court in aid of its conclusion that challenge to section 6 of the Act 1 of 2008, by the petitioners is without any sound legal basis. Similarly, the cases referred to at the Bar have been properly discussed and distinguished in the impugned judgment, therefore, we feel no necessity to repeat this exercise again.

12. Before we conclude, it will not be out of place to mention here that out of these three C.P.L.As.

C.P.L.A. No, 366-L/2010, as per office note, is time barred by four days, while C.P.L.A. No, 753-L is time barred by 70 days, but only in the later petition, application for condonation of delay has been submitted on the ground that the petitioners were not aware about the passing of impugned judgment, thus they could not avail their remedy in time. As observed above, C.P.L.A. No,366-L/2010 is time barred, but no application for condonation of delay has been moved for this purpose.

Accordingly, for this additional ground, this petition is liable to be dismissed. Similarly, the ground for condonation of delay urged in C.P.L.A. No,753-L/2010 is neither plausible nor satisfactory, thus, this petition is also liable to be dismissed on this additional ground, being barred by time.

13. This being the position, we do not find any substance in these petitions, which are accordingly dismissed and leave refused. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.