MIAN SAQIB NISAR, J.--- All the petitions mentioned in the attached Schedule, are being disposed of together through this judgment, as these involve common questions of law, having akin facts.
2. By virtue of provisions of section 6 the Punjab Finance Act 2008 (Act I of 2008) (hereinafter be referred to as Act 2008), the following tax has been imposed upon certain vehicles; the provision reads as under: Tax on imported luxury motor cars.--- (1) Subject to this section, the Government shall levy a one time 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)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 orderpassed 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 penaltylevied 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.
(12) In this section--- a)"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)] Sr. No Category of motor car Rate of Tax
1. Imported motor car with engine capacity from 2000 cc to 3000 ccRs. 200,000
2. Imported motor car with engine capacity exceeding 3000 ccRs. 300,000 The petitioners are the owners or occupants or keepers of the imported vehicles falling within the ambit of the above tax; they form two categories first, whose vehicles have been registered prior to the enforcement of the impugned tax, and the second yet unregistered, when the levy was imposed.
2. Learned counsel appearing for the petitioners in large number of these cases, by reference to Articles 70(4) and 142(a) of the Constitutionof the Islamic Republic of Pakistan (the Constitution) and Entry No.49 ofthe Legislative List provided in Schedule IV thereof have argued that the impugned tax can only be imposed by an Act of the Parliament and the Provincial Legislation has no competence in this behalf. Reference to support the plea has been made to the cases reported as WAPDA, and others v. Mian Muhammad Riaz and others, PLD 1995 Lah. 56, and Sayphire (Pvt.)
Ltd. and othersv.Government of Sindh, PLD 1990 Kar. 402; the petitioners falling in the first category assert that they have already paid the Motor Vehicle Tax @ 2% of the value of their vehicles at the time of the registration, therefore, the tax in question in the garb of "luxury" cannot be imposed on the rule regarding the prohibition of double taxation; that the instant tax in fact is a fee, which cannot be legally imposed, See Rahimullah Khan, and others v. Government of N.-W.F.P 1990 CLC 550; it is a colourable legislation, See Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026, Fauji Foundation and others v. Shamimur Rehman PLD 1983 SC 457; the levy of tax is discriminatory and violates the provisions of Article 25 of the Constitution of Islamic Republic of Pakistan, See Charanjit Lal Chowdhury v. The Union of India and others AIR 1951 SC41; the classification is not based upon intelligible differentia and has nonexus and relevance to the object of the tax which can be logically spelt out; if the object is to tax the "luxury", various luxurious vehicles such as Mercedes Benz C-180 and BMW 320, which worth millions of rupees,but having less engine capacity escape the mischief of the tax, while thereconditioned imported, Toyota Mark-X which comparatively is far less in value but has more engine capacity has been subjected to tax; the impugned tax is harsh and unreasonable; various dictionaries have been quoted to translate the word "luxury"; section 6 as argued has no retrospective effect and thus cannot take away and destroy the petitioners' vested right and annul the past and closed transaction.
Mr. Imtiaz Rashid Siddiqui, Advocate one of the learned counsel contends that Articles 141 and 142 should be read in conjunction with Article 77 along with relevant entries of the 4th Schedule; the subject-matter of the tax and placement of incident of the tax, shall give an insight into the charge; it shall thus be the rule of pith and substance, which should be kept in view while resolving the issue of legislative competence; moreover, it is the genesis of the tax, which shall be relevant, for the above purpose and the examined as per the following:
(i) the subject-matter of the tax should be analyzed; a)with reference to the placement of the incident of taxation; b)so as to appreciate as to as what really the levy of tax is about;
(ii) it is a tax, according to him:- a)on imported car b)for once c)for specified category of vehicles d)registered in Punjab after 30-6-1995 e)the data and the category is given in the schedule.
He thus states that in fact it is the capacity of the vehicle, which has been subjected to the tax and the field of taxation in this regard is covered by Items Nos.52 and 59 of the Federal Legislative List; further by making reference to the judgment reported as Hirjina & Co. v. Islamic Republic of Pakistan and another, 1993 SCMR 1342 paragraph No.5, it is submitted that the impugned tax in fact is in the nature of the excise, imposition whereof exclusively falls within the domain of the Parliament; he has also argued that an analogous earlier imposition was upheld by this Court, but that was on account of the difference phraseology of the previous enactment, therefore, the said dictum shall be inapplicable to the present matters; in this respect, he states that previously it was brand of the vehicle, which was the object of taxation, but now the criteria is the capacity; he has also pleaded that the tax law,which destroy a vested right, can never have the retrospective effect andin this context, reference has been made to the case reported as Molasses Trading & Export (Pvt.) Limited v. Federation of Pakistan and others, 1993 SCMR 1905; it is further submitted that the omission of the words "has been" in fact relates only to the recent past and therefore, while interpretingretrospectively" of the provisions, it shall not be applicable to the vehicles, which have been registered prior to the enactment, but only those, which have to be registered by the cut-off date but for certain reasons have not been registered.
3. Mr. Shan Gull, learned A.A.-G. has argued that the imposition of the tax of the instant and akin nature when earlier imposed through the Punjab Finance Act, 1997, was challenged almost on the similar grounds, it was sustained in the judgment of Division Bench of this Court reported as Amanat Khan v. Motor Registration Authority, Chakwal and 2 others 1999 CLC 1597 and vide decisions in the cases reported as Messrs Syed Bhais (Pvt.) Ltd. through Company Secretary v.
Government of the Punjab, Excise and Taxation Department through Secretary and another PLD 2000 Lah. 20 and Messrs Raja Industries Ltd. v. Government of Punjab and others 1999 MLD 3141, thus on the principle of law laid down in the case reported as Multiline Associates v. Ardeshir Cowasjee and 2 others PLD 1995 SC 423 and The Province of East Pakistan v. Dr. Azizul Islam PLD 1963 SC 296 at 308, this Division Bench is bound by the earlier decision of a D.B. having same ratio; he has also argued that by express provisions of law and by necessary intendment of the Legislation even vested right of the parties can be affected retrospectively and rule of past and closed transaction, shall not come in the way; that the basic object and purpose of the tax in question is the use and enjoyment of certain vehicles and such an imposition is not covered by an item of the Federal Legislative list. Further more that the double taxation upon same subject is not a bar under any provision of the Constitution or the law; he states that the present case is regulated by Entry No.33 read with 47 of the concurrent list. This is neither tax upon the import nor is upon the capacity production and has not nexus to the excise duty at all; the learned Assistant Advocate- General submits that all the pleas raised and judgments cited by the petitioners' side are not germane to challenge the impugned tax on any account whatsoever; he has made reference to certain portion of the case reported as Elahi Cotton Mills Limited. v. Federation of Pakistan PLD 1997 SC 582 at 675, 692, on the point of discrimination, there is stated to be none; the imposition of the tax can be validly made and the wisdom of legislation cannot be questioned. Regarding cut off date he has supported his argument on the basis of the judgments reported as Messrs Haider Automobile Ltd. v. Pakistan PLD 1969 SC 623 and Sh. Amin Ullah v. Pannu Ram PLD 1967 SC 289 and has finally concluded his submissions by making reference to paragraph No.31 at 675 of the Elahi Cotton Mill's case PLD 1997 SC 582.
4. Heard. We are not persuaded by the argument of petitioners' side that on account of any different phraseology or subject-matter of the tax, the earlier enactment i.e. the provisions of section 7 of the Punjab Finance Act 1997, which was examined in the judgment reported as Messrs Raja Industries Ltd. v. Government of Punjab and others 1999 MLD 3141, the judgment has no nexus hereto. In this behalf, it may be mentioned that previously the tax was imposed by reference to the brand of the cars and also the engine capacity thereof, whereas' presently it is only the engine capacity, which has been made the basis; only for the reason that the brand stands omitted does not make this case any different from the earlier matter. The questions, which have been examined by the Division Bench of this Court in the noted judgment about the retrospectivity of the imposition of the tax, past and closed transaction, competence of the legislature, the rule about the discrimination and also if the imposition is confiscatory or otherwise have been conclusively settled. In this regard, certain portions of the judgment seems to be relevant:---
(9) Mr. Ali Zafar, Advocate's argument that the Provincial legislature was not competent to levy the said tax has not impressedus. In our opinion the matter falls squarely under ItemNo.33 of the concurrent legislative list contained in Schedule to the Constitution. Needless to say that the said Item No.33 is to be read with Item No.47 of the said list.
(10) Similarly we are not inclined to agree with the argument that the provisions is discriminatory or confiscatory. We may refer here to some of the principles of law deduced by Mr. Justice Ajmal Mian (as his Lordship then was), after recapitulating the case-law from the Sub-Continent as also USA, England and also afterreference to some judgments of Privy Council vis-a-vis a taxingstatute in the case of Elahi Cotton Mills Limited v. Federation of Pakistan PLD 1997 SC 582. The principles find mention in para.31 of the report. We would quote a few, which are relevant to the present controversy:- "That Courts while interpreting laws relating to economic activities view the same with greater latitude than the laws relating to civil rights such as freedom of speech, religion, etc., keeping in view the complexity of economic problems which do not admit of solution through any doctrinaire or strait jacket formula as pointed out by Holmes, J. in one of his judgments."
"The Fransfurter, J., in Morey v. Daud (1957) U.S. 457 has remarked that in the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to the legislative judgment."
"That the Legislature is competent to classify persons or properties into different categories subject to different rate of tax. But if the same class of property similarly situated is subjectto an incidence of taxation, which results in inequality amongst holders of the same kind of property, it is liable to be struck down on account of infringement of the fundamental right relating to equality."
"That the tests of the vice of discrimination in a taxing law are less rigorous. If there is equality and uniformity within each group founded on intelligible differentia having a rational nexus with the object sought to be achieved by the law, the Constitutional mandate that a law should not be discriminatory is fulfilled."
"That the policy of a tax, in its operation, may result in hardshipor advantages or disadvantages to individual assesses which areaccidental and inevitable. Simpliciter this fact will not constitute violation of any of the fundamental rights."
"That the law should be saved rather than be destroyed and the Court must lean in favour of upholding the Constitutionality of a legislation keeping in view that the rule of Constitutional interpretation is that there is a presumption of favour of the Constitutionality of the legislative enactment unless ex facie it is violative of a constitutional provision."
Considering the impugned statute in the light of above-noted principles we find that the statute is neither confiscatory nor discriminatory. Owners of luxury vehicles are a class by themselves and no discrimination is reflected from the said statute inter se the members of the said clause."
5. We do not find ourselves in full accord with the ratio of the noted judgment and thus the instant case is squarely covered by the rule laid down in the Multiline Associates's case PLD 1995 SC 423, in which, it has been held: Earlier judgment of equal Bench in the High Court on the same point is binding upon the second Bench...If however, a contrary view has to be taken, then request for constitution of larger Bench should be made." This principles is also fortified by the case reported as The Province of East Pakistan v. Dr. Aziz Islam PLD 1963 SC 296, therefore, the points, which have been settled in the aforesaid judgment, are binding upon us.
6. Notwithstanding and without prejudice to the above the question, whether the provisions of section 6 of the Act 2008, cannot be applied retrospectively regarding the vehicles, which were already registered when the tax was imposed and thus it would effect any so-called vestedright of the petitioners, the answer to the legal proposition is provided bythe judgment reported as Molasses Trading and Export (Pvt.) Limited v. Federation of Pakistan and others 1993 SCMR 1905, in which, it is clearly held:
(e) Interpretation of statutes--- ---Vested rights...Such rights cannot be taken away save by express words.or necessary intendment in the statute.
(g) Vested right--- ---Such right can be taken away by a retrospective/retroactive legislation and such legislation cannot be struck down on that ground'
Thus examining the provisions of section 6 ibid on the touch-stone of the noted dictum, suffice it to say that on account of lucid, express, unambiguous language, which categorically provides a cut off date, the intention of the legislature is very much clear; that the imposition is vividly, consciously, lambently retrospective in nature and shall also effect any past and closed transaction and even any alleged vested right; thus all those vehicles, which are imported into Pakistan by the given date, notwithstanding the registration or otherwise by then shall be liable to tax.
7. The argument that because on the registered vehicles tax has already been paid, therefore, it shall amount to double taxation, in this regard, the learned counsel for the petitioners' side have failed to cite any law, which prohibits that a subject/object is not liable to pay tax more than once.
We are also unimpressed with the argument of learned counsel for the petitioners that the impugned tax is in the nature of "capacity tax" and thus the imposition is within the exclusive competence of the Parliament, rather in our view, it is the use and enjoyment of a vehicle having an engine of a particular power, which is subject to tax and by no stretch of legal imagination and interpretation it can be considered to be a tax on the production capacity of any plant, machinery, etc. so as to attract Entry No.52 of the Federal Legislative list; it shall quite ludicrous to hold as argued that the engine produces the energy to run a vehicle and this brings the case within the connotation of "production" appearing in the said entry. It is not even an excise duty, the judgment cited by Mr. Siddiqui is absolutely inapplicable to the instant matters and has been rendered in a different context altogether. We are afraid that no case of discrimination at all, of any nature, examining the matter from any point of view, has been made out. All the vehicles of the given engine power, from a particular date have been subjected to tax and this is across the board, and the capacity criterion in this behalf constitutes a class itself which is not shown to be based on any irrational criteria, rather the use and enjoyment of the vehicles having a bigger engine force are the subject/object of the tax, which is rationally founded.
8. As regards the validity of setting out the cut off date is concerned, the same is justified on the ratio of Messrs Haider Automobile Ltd, v. Pakistan PLD 1969 SC 623 and Sh. Amin Ullah v. Pannu Ram PLD 1967 SC 289.
9. The argument that the impugned is a colorable legislation, is unfounded and subtle, the same is our view about the submission that it is a fee in the garb of tax.
10. Mr. Shan Gul, learned A.A.-G. has rightly pointed out that this tax is on the use and enjoyment of certain vehicles having specific engine capacity and notwithstanding its model and brand, etc. the tax is applicable to all such vehicles; besides, the wisdom of the legislature as to why a particular item has been taxed and not the other cannot be gone into the Court until a case for discrimination has been made out, which is not so established in the present matters, See PLD 1983 SC 457, Fauji Foundation and another v. Shamimur Rehman.
In the light of above, we do not find any merits in these petitions, which are hereby dismissed.
SCHEDULE This schedule shall be read as an integral part of judgment, dated 24-12-2009 passed in Writ Petition No.8886 of 2008:--- Writ Petitions Nos.13426, 14698, 14699, 13723, 16048, 16049, 15685, 15743, 15723, 15737, 15588, 15586, 15974, 15535, 15563, 15564, 15491, 15173, 15170, 15780, 15534, 15174, 15175, 15350, 15180, 15349, 15347, 15346, 15348, 15351, 15172, 15171, 16028, 16027, 15019, 16023, 16034, 16050, 16039, 16040, 16070, 16071, 16079, 16075, 16077, 16186, 16339, 16494, 16493, 16480, 16427, 16490, 16691, 16224, 16202, 17450, 17459, 17509, 17140, 17614, 17615, 17611, 16872, 16875, 16876, 16905, 16906, 16907, 16873, 16946, 16952, 16957, 16958, 16959, 16960, 16987, 17044, 17704,17692, 17698, 17533, 17095, 17155, 17112, 17559, 17076, 17075, 17073, 17103, 17089, 17157, 17079, 17083, 17085, 17084, 17367, 17366, 17365, 17364, 17368, 17381, 17380, 17141, 17411, 17412, 17395, 17394 17393, 17392, 17410, 17214, 17389, 17413, 17204, 17205, 17206, 17207, 17296, 17297, 17305, 17215, 17243, 17241, 17277, 17300, 17270, 17257, 17295, 17301, 18540, 18539, 18541, 18428, 18246, 18255, 18257, 18258, 18187, 16530, 16531 16532, 16549, 16551 16566, 16581, 16580, 16582, 17784, 17785, 17786,.
17787, 17797, 17801, 17829, 17840, 17854, 17855 of 2008, 192, 193, 194, 195, 196, 199 of 2009, 16642, 16683, 16684, 16685, 16697, 16707, 16713, 16724, 16812, 16813, 16829, 17782, 17783 of 2008, 60, 41, 910, 2672, 3314, 4059, 5769, 5771, 5775, 6346, 7076, 7077, 5700, 7235, 8701, 11363, 11248, 11981, 11980, 12074, 12004, 12504, 13684, 13999, 13959, 14658, 14660, 15734, 15733, 17953, 12689, 6513, 18941, 18960, 19290 of 2009, 17363 of 2008, 17449, 22153, 1051, 6871, 6872, 6873, 6874, 22986, 23007, 23009, 22692, 23008 and 20787 of 2009.