' This II Appeal is directed against the decree passed by the District Judge, Hyderabad, in 1st Appeal No, 256/66. Whereby the decree passed by the Senior Civil Judge, Hyderabad in Suit No, 367/66 filed by the appellant was set aside.
2. The facts giving rise to this appeal briefly stated, are, The appellant filed a suit in representative capacity for and on behalf of the Cinema's Owners of Hyderabad, for declaration that the imposition of tax on cinemas by resolution No, 526 passed by the Hyderabad Municipality on 7-1- 1965 was void and of no consequence. The appellant also prayed in the suit for permanant injunction restraining the Hyderabad Municipality from recovering the tax.
3. The case of the appellant, as stated by the Advocate for the appellant, is that Hyderabad Municipality (now called Hyderabad Municipal Corporation) had proposed to levy tax on Cinemas, but the proposal was rejected by it by its resolution dated 24-5-1963. However, on 10-12-1963, the Exhibitors Association without any invitation filed objections to the imposition of the tax on the cinemas.
4. On the same day i,e, 10-12-1963, the Municipal Committee passed a resolution resolving that cinema tax may be recovered from each cinema within Hyderabad Municipal limits at the rate of Rs, 5 per show with effect from 1-1-1964. Thereafter, the Municipal Committee published notice in the daily IBRAT Hyderabad dated 15-5-1964 and in the daily 'DAWN' dated 15-5-1964, Exbs. D/2 & D/3 respectively, calling upon the people to file objection to the proposal within 30 days from the date of publication. The notice reads as follows :- "The Municipal Committee under their Resolution No, 132 dated 10-12-1963 have resolved to levy Cinema Tax within the Municipal Limits of Hyderabad Municipal Committee w. e.
1. 1st January, 1964 at the rate of Rs, 5 per show.
' This tax is to be charged weekly from all the cinemas situated within the Municipal Limits Proprietor of each cinema will be required to submit the details of shows held during the week duly certified by the Excise and Taxation Officer, Hyderabad.
' The proposed income from this tax is estimated to Rs, 60,000 annually and will be utilized for the welfare of the city.
' Any objection or suggestion to the preliminary taxation proposals may be made to the undersigned by 16th June, 1964- ' The objection or suggestions so received will be heard by the SubCommitte to be appointed for the purpose on 16th July and thereafter.
' The Sub-Committee so appointed, after hearing objections etc., will submit its report to Municipal Committee by Ist August, 1964.
' The Municipal Committee will considered the report of the Sub-Committee on 20th August, 1964 and will submit final taxation proposals to the Government on Ist September, 1964."
' On 7-6-1964, Municipal Committee appointed a Sub-Committee, by Resolution No, 333 for hearing the objection, if any. This was followed by a letter of Municipal Committee addressed to the Office Superintendent (Exh. D/5) asking him to intimate, if any objections had been received and if the meeting of the Sub-Committee under Resolution No, 333 dated 7-6-1964 for hearing objections had been called on 16-7-1964. The Office Superintendent made an endorsement on Exh. D/5 that no objections had been received in his office and this information had already been given to the Deputy Superintendent, Taxes personally.
' Thereafter, on 7-1-1965, resolution No, 526 was passed resolving that the proposal might be submitted for approval as would appear from Exh. D/6.
' Since admittedly no objections were filed pursuant to this notice and since Government of West Pakistan had given sanction to impose the tax at the rate of Rs, 5 per show on cinemas within the limits of Hyderabad the tax was levied with effect from 8-7-1965.
' The sanction is contained in Exh. D/8 which reads as follows :- ' NOTIFICATION [3rd July, 1965)
' No, So III (LG). 5(17) HYD/65.-In exercise of the powers conferred upon him under section 33 of the Municipal Administration Ordinance, 1960, read with item 11 of the Third Schedule thereto, the Governor of West Pakistan is pleased to grant sanction to the imposition of tax at the rate of Rs, 5 (rupees five) per show of all the cinemas in the Municipal Limits of Hyderabad with immediate effect.
' By order of the Governor of West Pakistan. INAYAT ULLAH, Basic Democracies, Social Welfare and Local Government Depatment."
6. Being aggrieved by the imposition of the tax the appellant as already stated, filed a representative suit, being Suit No, 367 of 1965, in the Court of Civil Judge, First Class, Hyderabad, for declaration that Resolution No, 526 dated 7-1-1965 demanding Rs, 5 per show per cinema was void of no consequence and for permanent injunction restraining the defendants/respondents from recovering the same from the cinema owners in the city of Hyderabad.
7. By the judgment and the decree dated 31-8-1966, the learned Civil Judge decreed the suit as prayed. The respondents filed first appeal with the District Judge, Hyderabad, who by the judgment dated 9-8-1967 accepted the appeal and set aside the judgment and decree passed by the learned Civil Judge, holding that the representation dated 10-12-1963,,filed by the appellant was filed before the passing of Resolution No, 132 dated 10-12-1963 by the respondents and the same could not be deemed to be an objection contemplated under the law and further holding that he was satisfied that there was no irregularity in finalising the proposal to levy the tax of such nature as would justify interference by a civil Court. The learned District Judge while allowing the appeal also took note of the fact that the appellant herein had not invoked the provisions of section 119 of the Municipal Administration Ordinance, 1960, which provide an appeal from such an action. The learned District Judge also held that the Government of West Pakistan was a necessary party to the suit and on that ground also the suit was not maintainable.
8. I have beard Mr. Jhamat Jethanand for the appellant and Mr. Afzal Ahmed for the respondents.
Mr. Jethanand has raised before me only one point namely, that the imposition of the tax was invalid inasmuch as the rule 3 and rule 5, sub-rules (1), (3) and (4) and rule 6 sub-rules (1) and (2) of the West Pakistan Municipal Committee (Imposition of Taxes) Rules, 1960 (hereinafter called the Rules) were not complied with. In order to appreciate the point raised it is necessary to refer to these rules. I therefore, for the sake of convenience, reproduce these rules hereinbelow "3. Priliminary taxation proposals.-(1) While framing the annual budget or the revised budget of the Municipal Committee, the Chairman of the Committee shall review position of the Committee and if in his opinion the financial position calls for any change in the tax structure, be shall formulate taxation proposals and incorporate them in an Appendix to the budget.
(2) While sanctioning the annual budget or the revised budget, as the case may be, the Municipal Committee shall decide whether any of the taxation proposals formulated under sub-rule (1) shall be dropped or proceeded without modifications or with such modifications as may be approved by the Municipal Committee.
(3) The Controlling Authority, while considering the annual budget or the revised budget, as the case may be, may confirm, modify or reverse any decision of the Committee taken under sub-rule (2).
5. Hearing of objections and suggestions to the preliminary taxation proposals :-
(1) All objections and suggestions received from the inhabitants shall be entered in a register maintained for the purpose.
(2)
(3) The Subcommittee shall bear the same in public and shall afforded all possible facilities to the persons making them, to present their case
(4) The Subcommittee shall, on the close of the hearing of objections and suggestions, draw up and send to the Municipal Committee by the date specified for the purpose in the taxation programme, a detailed report showing-
(a) the salient features of the preliminary taxation proposals ;,
(b) the date of issue of the public notice under sub-rule (1) of rule 4 ; (c)the last date for the receipt of objections and suggestions ;
(d) the number and nature of objections and suggestions received within the specified period ; (e)the manner in which the objections and suggestions were heard ;
(f) the finding of the Sub-committee in respect of each objections and suggestions heard by it ; (g)the recommendations of the Subcommittee with regard to the taxation proposal, and whether such recommendations are in accordance with the Model Tax Schedule and ;
(h) financial implications involved in such recommendation.
6. Finalisation of the taxation proposals :-
(1) On the date specified for the Purpose in the taxation programme, the Chairman shalt present the report of the. Subcommittee constituted under sub-rule (2) of rule 5 to a special meeting of the Municipal Committee for consideration.
(2) The Municipal. Committee shall consider the report of the Sub-Committee and shall for reasons to be recorded therein :
(a) approve it with or without modifications ; or
(b) drop the taxation proposal ; (c)If the Municipal Committee decides to drop the taxation proposal the Chairman shall inform the Controlling Authority, about the decision of the Committee."
9. It is contended by Mr. Jethanand that objections filed by the appellant were not considered. The learned District Judge has held that these objections were not filed pursuant to public notice published in the c newspapers inviting objections to the proposal of levying the tax. I may mention that the objections were filed on 10-12-1963, while the notice was published in daily `Ibrats Hyderabad dated 15-5-1964 (Exh. D/2) and daily `Dawn' Karachi dated 15-5-1964 (Exh. D/3).
Therefore, the objection filed on 10-12-1963 could not be deemed by any stretch of imagination to be the objections made pursuant to the notice and if they were not considered at all, no exception could be taken to it.
' It was next contended by Mr. Jethanand that no register of objections and suggestions received from the inhabitants as contemplated by rule 5, sub-rule (1) was maintained for the purpose. In this connection Mr. Jethanand relied on the evidence of Kazi Abdul Majid (Exh. 57) who stated that no such registered was maintained. However, this assertion for Kazi Abdul Majid was not based or any positive evidence. On the contrary, Rasul Bux, Deputy Superintendent, Taxes of the respondents (Exh. 59) made a categorical statement that such register was maintained. In cross-examination he was asked why he had not brought the register. His explanation was that no objection was received by the Subcommittee. Since no notice was served o on the respondents to produce the register nor was the same summoned, no grievance could be made and no adverse inference could be drawn against the respondents for non-production of the register. This witness further stated that the respondents had followed the rules in levying the tax and no provisions were omitted.
' The next grievance of Mr. Jethanand was that no meeting of the Sub-Comm. Ittee was held as required by sub-rule (3) of rule 5 of the Rules and no report of the Sub-Committee was drawn up and sent to the Municipal Committee as required by sub-rule (4) of rule 5 and by sub-rules (1) &
(2) of rule 6 of the Rules. In reply it was submitted by Mr. Afzal Ahmed learned counsel for the respondents that when no objections were filed, the question of compliance of these provisions did not arise. Here I may point out that rule 4, contemplates the drawing up and sending of the report on the closing of the hearing of objections and suggestions but if there were no objections or suggestions the question of drawing up and sending the report by the Sub-Committee or its consideration by the Municipal Committee did not arise. Therefore, the grievance of the appellant on this account is without any valid reason.
' It was next submitted by Mr. Jethanand that the provision of rule 3 of the Rules were not complied with but no such objection was specifically taken in the plaint or even in the memorandum of appeal as admitted by Mr. Jethanand. He however, argued that the imposition of the tax has been challenged as being illegal. However, unless the point was specificall raised and the respondents had due notice and opportunity to meet the same it cannot be allowed to be raised for the first time at this stage.
10. It was next argued by Mr. Jethanand that the provisions of rules 5 and 6 of the Rules are mandatory and ill support of his submission the learned counsel relied on Messrs Dreamland Cinema, Multan v. Commissioner of Income-tax Lahore(1), Chairman, Dhanbad Municipality v.
Janeshwar Bhakat and others (2). Kalu Karim and others v. City Municipality of Broach (3) and Parmeshwar Mahaseth and others v. State of Bihar and others (4).
' Mr. Jethanand also referred to following passage from 'Statutory Construction' by Crawford, 1940 Edition, which appears at page 537- "In accord with the rule applicable to statutes generally, which we have hitherto discussed, statutes regulating the assessm ent of taxes must {{FOOT NOTE}}
(1) PLD 1977 Lah. 292 (2) AIR 1934 Pat. 83
(3) AIR 1927 Bom. 527 (4) AIR 1958 Pat. 149 {{FOOT NOTE}} ' be given a mandatory construction, if their purpose is to protect the tax.' prayer."____ ' And also the 'Interpretation of Statutes' by N. S. Bindra, 6th Edition, page 576 :- "Statutes regulating the assessm ent and collection of taxes are, on the other hand, given a mandatory construction if they are designated for the benefit and protection of the tax-prayer."
' So far the above-quoted passages are concerned there is no doubt that the provisions contained in the Statute regulating the assessment and collection of taxes which are designated for the benefit and protection of the tax-payers have to be construed as mandatory if due to non- observance thereof some prejudice could be caused to the tax-payers. But in the instant case the question is slightly different and it is whether in the circumstances of this case it was not necessary to observe the rules mentioned hereinbefore.
' Now, I would consider the cases relied upon by the learned counsel for the appellant.
' In the first-named case reliance was placed on the following observations made at page 296 :- "Where two equally reasonable constructions are possible, one strict and the other beneficial to the assessee, the latter should be preferred in a taxing statute in view of the rule laid down in C. I. T. v.
Hossan Kasam Dada (PLD 1961 SC 375)."
' But this case is distinguishable for in the instant case the question of interpretation of any provision of Municipal Administration Ordinance or the Rules having two equally possible interpretation does not arise. Here the simple question is whether rules 5 and 6 of the Rules, in the circumstances of the case could have been followed even if they are considered to be of mandatory nature. Since no objections were filed to the proposal to levy the tax the answer would be that no question arose for following the said rules.
' In the case of Dhanbad Municipality it is observed that it is a well-settled principle of law that when the Legislature has empowered an authority to impose taxes after doing certain acts it cannot impose the taxes unless that is done and the authority must show if challenged, the set was done. On the facts of this case it was further held that it was not a question in which a requirement of law was irregularly performed, there was a total absence of compliance with a condition without which the tax could not be imposed. In this case the provisions of section 86 of Bihar Municipality Act, 1922 came under consideration. Under this section laterine tax could be imposed on holdings containing dwelling houses, laterine, urial and cesspool and on holdings containing shops of places of business in which, in the opinion of the Commissioner at a meeting, a latrine, urinal or cesspool was requirted. The tax was imposed on shops without forming any such opinion by the Commissioners. This case would have application to the facts of the present case if any objections were filed and were not considered and the procedure provided was not followed but since no objections were filed the question of following the procedure would have been an exercise in vain.
In the instant case it cannot be said that a condition precedent has not been performed.
' In Kalu Karim's case the Government had sanctioned the imposition of terminal tax on the articles mentioned in the schedule except Item No, 20 which the Government on representation made by the Municipality allowed to be added without giving any notice to the objectors or affording opportunity of raising objection to the proposed amendment. It was held that the levying of tax on the new article without having followed the procedure provided by Chapter VJI was illegal. Again this case is distinguishable because in that case the objector was not heard and no opportunity was given to file objections to the newly-added item in the Schedule but in the present case notice was duly issued inviting objections and no objections were filed.
' Now, I would take up the last case relied by upon Mr. Jethanand. In this case elections of the Commissioners of Darbhanga Municipality were held without publication of the notification in the Gazette as required by rule ,7 of the Bihar Municipality Elections and Election Petitions Rules, 1963. It was observed as follows :- "The relevant provisions of the Election Rules and the Bihar. And Orissa Municipal Act do not dispense with the preparation of a separate register of voters ward by ward. Of course, on the basis of the electoral roll of the Assembly constituency. Such a separate register has to be prepared for each ward and it must be published before the holding of an election is notified. Where this is not done, the Municipal Election held on the basis of Assembly electoral rolls must be held to be invalid.-[See AIR 1957 SC 304 rel. On]." - ' Again this case is distinguishable. In the instant case by notice duly published, objections were invalid. The tax was not imposed without issuing the notice.
' The learned District Judge in the judgment under appeal, on consideration of rule 7 (1) of the Rules, held that the Government of West Pakistan was a necessary party to the suit, although he termed the decision on this point as academic, for according to him, the fate of the appeal hinged on the point dealt with earlier in this judgment, which he also decided in favour of the respondents.
However, I am of the view that the suit would, not have failed due to non-joinder of the Government of West Pakistan in view of the provisions of Order I rule 9, C. P. C. For what was really challenged was the non-observance by the respondents of the Rules before sending the proposal to the Government and not the sanction of the Government and therefore, the Government was not be heard on the point relating to nonobservance of the rules. Further, the beneficiary of the tax was not the Government. Lastly, no issue was raised in the trial Court on this point.
' For all these reasons I hold that since no objections were filed therefore, the question of compliance of rules 5(1)(3) and (4) and 6 (1) and (2) did not arise, Accordingly the appellant had no cause to file the suit. I therefore, dismiss the appeal, leaving the parties, in the circumstances of this case, to bear their own cots throughout. ."