Anwar Zaheer Jamali, J.--With the leave of this Court vide order dated 27.3.2009, this civil appeal by Pakistan Television Corporation Limited (hereinafter referred to as the "Corporation''), a Public Limited Company incorporated under the Companies Ordinance, 1984 is directed against the judgment dated 27.5.2008, passed by Islamabad High Court Islamabad, in Writ Petition No, 1562 of 2003 (re: P.T.V. Corporation versus Capital Development Authority) and three other similar Writ Petitions No, 1741 of 2002, 7 of 2003 and 649 of 2007, involving common questions of law, whereby all these petitions were dismissed.
2. Briefly stated; to the extent of present appellant, the background of this litigation is issuance of two bill/ demand notice in the sum of Rs,971658/- and Rs,2177000/- dated 13.9.2001 respectively, by respondent Capital Development Authority (in short the "Authority") to the appellant Corporation, demanding payment of property tax, including arrears, upto for the year 2001-2002, due on their two immovable properties situated within the territorial limits of the Authority. In this regard, the grievance of the appellant was that though it is a Public Limited Company incorporated under the Companies Ordinance 1984, but, as evident from its Articles and Memorandum of Association, it is wholly owned, administered and managed by the Government of Pakistan, therefore, exempt from payment of property tax in terms of Paragraph 4(6) of the Notification No, SRO 24(1)/2001 dated 11.1.2001 (in short the SRO of 2001).
3. The claim of exemption so raised by the appellant was strongly disputed by the respondent Authority, who asserted that within the territorial limits of the Authority property tax was initially imposed by SRO 806(I)/91 of 1991, issued in exercise of powers conferred by Rule 6(1) of Capital Development Authority (Imposition of Taxes) Rules 1981 etc. and other SROs issued from time to time. Finally on 11.1.2001, SRO of 2001 was issued in exercise of powers conferred by Section 15-A of the Capital Development Authority Ordinance 1960 read with Section 33 & 34 of the Municipal Administration Ordinance, 1960, and Rule 6(1) of the Capital Development Authority (Imposition of Tax) Rules 1981, after observing all codal and legal formalities required under the law and with the prior sanction of the Federal Government, whereby rate of property tax was enhanced to one- twelfth of the annual value of buildings and lands located within the area already specified in the Cabinet Division Notification No, SRO-1(I)/99 dated 1.1.1999, thus property tax was payable by the appellant like many other Government owned corporations. Moreover, in pursuance to the directions of the High Court, contained in its order dated 7.11.2002 in Writ Petition No, 510/2002, appellant Corporation was also afforded proper opportunity of personal hearing by the Chairman of the Authority on 11.4.2003, during which they could not show that the appellant despite being a Public Limited Company controlled by the Federal Government, has their hundred percent shareholding with the Federal Government or their immovable properties within the territorial limits of CDA stood in the name of Federation of Pakistan as its owner. It was further brought to their notice that all public corporations who are wholly or partly owned by the Government of Pakistan were not exempt from payment of property tax on their immovable properties, because under Clause 4(6) of the notification dated 11.1.2001, such corporations were specifically excluded from the exemption clause in respect of buildings and lands owned by the Federal and Provincial.
Governments. It was also brought to the knowledge of appellant that many other public corporations, like State Bank of Pakistan, WAPDA, National Highway Authority etc. were regularly paying property tax on their respective immovable properties within the territorial limits of C.D.A. therefore, the appellant cannot claim any exception to such general policy, having full backing of law. The exercise of issuance of bills/demand notices to the appellant was thus defended by the respondent Authority, and it was prayed that the appellant be directed to make payment of all the arrears of property tax due against them, as mentioned in the bills/demand notices issued to them for this purpose from time to time.
4. Writ Petition No, 1562 of 2003, instituted by the appellant Corporation on 9.6.2003, for seeking relief that various demands of property tax raised by the respondent Authority be declared illegal, without lawful authority and of no legal effect, was taken up for hearing by a learned Single Judge of Islamabad High Court on 27.5.2008, alongwith three other writ petitions, referred to above. After hearing the parties' counsel in all these petitions, the same were dismissed by common impugned judgment, inter alia, by placing reliance upon the judgment of this Court in the case of Province of NWFP versus Pakistan Telecommunication Corporation (PLD 2005 S.C. 670) and with the observations that the appellant was a Corporation established under the Companies Ordinance 1984, and thus, its buildings and lands were not exempt from payment of property tax to the respondent Authority which has lawful jurisdiction and statutory backing to levy and charge such tax from the appellant. It was further held that the appellant were not entitled to avail the benefit of exemption as envisaged either under Paragraph 4(6) of SRO of 2001 or Articles 165 of the Constitution of Islamic Republic of Pakistan, 1973 as they do not qualify for exemption under these provisions of law.
5. Mr. Aftab Ahmed Khan, learned ASC for the appellant, after detailed narration of relevant facts of the case, regarding inception of "Television Promoters Company Limited" in the, year 1965 and then "Pakistan Television Corporation Limited" after its conversion into a public limited company and other developments which had taken place from time to time in the formation of this Corporation, vehemently contended that although appellant Corporation, is a Public Limited Company incorporated under the Companies Ordinance, 1984, but still its hundred per cent control, shareholdings and assets vests with the Federation of Pakistan, as evident from the Article and Memorandum of Association of the appellant Corporation, and other material in the forms of various notifications referred to in Paragraph IV of the facts stated in the memo of this appeal, therefore, the demand of payment of property tax by the respondent Authority is wholly without jurisdiction. In this context, he further made reference to the language of Paragraph 4(6) of the Notification No, SRO. 24(1)/2001 dated 11.1.2001, relating to exemption and also Article 165 of the Constitution of the Islamic Republic of Pakistan 1973.
6. The crux of the submissions of the learned counsel was that for all practical purposes, the assets owned by the appellant Corporation in the forms of lands and buildings, which have been subjected to property tax by the respondent Authority, shall be deemed to be exclusively owned by the Federal Government within the meaning of these provisions of law, therefore, not liable to levy of any property tax. To gain support to his submissions, learned counsel made reference to the case of Muhammad Aslam Saleemi versus Pakistan Television Corporation (PLD 1977 Lahore 852), which, according to him, lays down that the functions entrusted to and performed by the appellant Corporation are in connection with the affairs of the Federal Government and for this reason the appellant Corporation acts as an agent of the Federal Government. Moreso, when the major shareholder in the said Corporation is also the Federal Government. In addition to it, learned counsel also made reference to the following other cases:- (i)Sindh Industrial Trading Estate Ltd. v. Central Board of Revenue. (PLD 1975 Karachi 128)
(ii)Central Board of Revenue v. SITE. (PLD-1985 SC 97)
In the first case mentioned above, legal status of Sindh Industrial Trading Estate (Ltd) Karachi, being a public limited company performing its functions as a department of the Provincial Government was examined in an entirely different context relating to its accessibility under the Income Tax Act, 1922 and it was held that being a department of Provincial Government of Sindh, performing functions as such, it enjoyed the status of exemption in terms of Article 165 of the Constitution of the Islamic Republic of Pakistan 1973. This view of the learned Division Bench of Sindh High Court was upheld in the other cited judgment.
7. In the end, with reference to the. impugned Notification No, SRO. 24(1)/2001, dated 11.1.2001, he also challenged levy of property tax on the ground of lack of territorial jurisdiction of the respondent Authority for charging such tax from the appellant corporation. However, at the same time learned ASC did not dispute/controvert that both the properties of appellant Corporation, subjected to property tax are located within the territorial limits of CD.A. as well as the area notified in SRO No, 1(I)/99 dated 1.1.1999, issued by the (Cabinet Division) Government of Pakistan.
8. Conversely, Mian Muhammad Hanif, learned ASC for the respondent strongly defended the impugned judgment of the Islamabad High Court in favour of the respondent Authority. For this purpose, after making reference to some of the notifications issued and relied by the respondent Authority for charging property tax from the appellant, he squarely placed reliance upon the case of Province of NWFP (supra). Further submission of the learned counsel was that ratio of this judgment is fully applicable to the facts and circumstances of the present case, as in the said case, in order to avoid the payment of property tax, Pakistan Telecommunication Corporation had also unsuccessfully followed the same line of defence with reference to Section 4(a) of Urban Immovable Property Tax Act 1958, which is para materia to Paragraph 4(6) of SRO of 2001; and Article 165 of the Constitution, but failed. Learned ASC also cited following other cases in support of the case of respondents, and the impugned judgment:-- (i)Union Council, Ali Wahan, Sukkur v. Associated Cement (Put.) Limited (1993 SCMR 469)
(ii)Bilquis Anwar Khan v. Pakistan (2001 SCM R 809)
(iii) Tures Hotel, Islamabad v. Capital Development Authority (2006 SCM R 1738)
In the case of Union Council, Ali Wahan, Sukkur (supra), the legal status of Associated Cement (Pvt.) Limited as a public limited company, whose total shares were owned and controlled by the Federal Government was examined in the context of exemption provided under Article 165 and 165- A of the Constitution and it was held that invoking the doctrine of lifting the veil of incorporation in such a case to enable the company to have the benefit of Article 165 would place the company in an advantageous position to the detriment of the companies which were also engaged in manufacture and sale of cement 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. With these observations, the plea of exemption from the payment of octroi tax in terms of the two Articles of the Constitution, referred to above, despite the company's share holding being 100% with the Federal Government was not accepted. The appeal was accordingly allowed and the claim of Associated Cement (Pvt.)
Limited, a state functionary, for exemption from payment of octroi tax, was rejected. In the case of Mrs. Bilquis Anwar Khan and 39 others (supra) several identical petitions challenging the authority of "Capital Development Authority" to levy property tax, were dismissed with the observations that by virtue of Section 15-A, SRO No, 806 dated 20.8.1991 and SRO No, 619(I)/1994 dated 16.6.1994 read with relevant provisions of Municipal Administration Ordinance, 1960, the authority had the competence to levy such tax. Accordingly, these petitions/appeals were dismissed. In the case of Tures Hotel, Islamabad (supra), the earlier view of this court in the case of Bilquis Anwar Khan was reiterated and thus the appeals challenging levy of property tax by the Capital Development Authority, Islamabad, were dismissed.
9. Before concluding his submissions, with reference to the Criminal Original Petition No, 108 of 2010, moved by the respondents, which has been clubbed with this appeal, further submissions of the learned counsel was that deliberately full compliance of order dated 27.3.2009 passed in this appeal, has not been made by the appellant as yet, which entails and justify consequences of contempt proceedings against them.
10.Before we proceed to examine various rival contentions raised before us by the parties counsel, it would be advantageous to reproduce hereunder the relevant Paragraph 4(6) of SRO 24(I)/2001, dated 11.1.2001, and Article 165 of the Constitution which read as under:-- {{TABLE}}
4. The following categories of buildings and lands shall be exempt from payment of tax to the extent shown against each category:-- Category 1Exemption 2 {{TABLE}}
(1) ..............
(2)..............
(3)..............
(4)..............
(5)..............
(6)Buildings and land owned by the Federal or a Provincial Government, but excluding public and private corporations 100% (7)..............
Article 165 of the Constitution:
165. (1) The Federal Government shall not, in respect of its property or income, be liable to taxation under any Act, of Provincial Assembly and, subject to Clause (2), a Provincial Government shall not, in respect of its property or income, be liable to taxation under Act, of [Majlis-e-Shoora (Parliament)] or under Act, of the Provincial Assembly of any other Province.
(2)If a trade or business of any kind is carried on by or on behalf of the Government of a Province outside that Province, that Government may, in respect of any property used in connection with that trade or business or any income arising from that trade or business, be taxed under Act, of [Majlis-e-Shoora (Parliament)] or under Act, of the Provincial Assembly of the Province in which that trade or business is carried on.
(3)Nothing in this Article shall prevent the imposition of fees for services rendered".
11.After looking at the exempting provision of SRO of 2001, it will be pertinent to mention here that for the purpose of exemption under the strict parameters of this provision of SRO, heavy burden was on the appellant Corporation to bring its case within its ambit. Indeed, sub-para (6) of Paragraph 4
(ibid) provides in unequivocal terms about the exemption of buildings and lands vesting in the Federal or Provincial, Government from levy of property tax, but excluding public and private corporation. Obviously sub-para 6 (ibid) is to be read as a whole and no redundancy can be attributed to its latter part, excluding the benefit of exemption to public and private corporations.
12.Keeping in view this clear legal position, in order to decide the fate of this petition, we have to embark upon the investigation of fact on the basis of available record, as to whether the appellant Corporation, despite being a Public Limited Company incorporated under the Companies Ordinance, 1984, can claim that its immovable properties, subjected to payment of property tax vest in the Federal Government in order to avail its benefit or benefit of Article 165 (ibid). For this, here a reference to the judgment of this Court in the case of Province of NWFP (supra) will be useful, wherein, while discussing a proposition of law parallel to the one raised in the case in hand, following useful discussion was made with reference to a case against Pakistan Telecommunication Corporation, which was initially established under the Pakistan Telecommunication Act, XVIII 1991, and thereafter re-organized under the Pakistan Telecommunication (Re-organization) Act, 1996 and listed as a public limited company:-- "18. It was agitated that Federal Government being holder of lion share-holding in the Company virtually the properties of respondent-Corporation become the properties of the Federal Government but we are not persuaded to agree with the point formulated at the Bar. By virtue of its composition as a limited juristic company with private participation in the shareholding and after listing on the stock exchanges of the country, for all intents and purposes it remains a limited company with public participation and not the sole ownership of the Federal Government as misunderstood. The assets and liabilities of the Company now permanently vest in the Company and not in the Federal Government, as erroneously canvassed at the Bar. We are clear in our mind that the case of PTC decided hereinabove in relation to the levy of octroi charges stands entirely on different footing and is not at par with the liability of the Company for payment of property tax on its urban immovable properties. In our considered view, neither the provisions of Article 165 of the Constitution nor the provision of Section 4(a) of Act, 1958 advance the cause of the company. A limited company with private participation can hardly be construed to be a Government Department and even after unveiling the veil of incorporation, it remains a juristic person absolutely different from a natural person or a Government Department. Case-law cited earlier heavily leans in favour of liability for payment of tax rather than exemption from payment of tax and there can be no second opinion but to hold that on the basis of the available record and data, after incorporation of the respondent-Corporation as a public limited company it is no longer immune and. exempt from the payment of property tax. Learned Members of the Division Bench have recorded elaborate reasons rightly differentiating the case from Writ Petition No, 657 of 1994 decided earlier by another Division Bench of the High Court and rightly come to the conclusion that the PTCL is not the successor of the former PTC. In all material particulars, its properties and income cannot be construed to be the property and income of Federal Government by any stretch of argument.
19. Lastly, in order to reinforce his submissions, learned counsel for the respondent-Company placed on record annual report of the Company for the year 2004 and copies of paid-up challan reflecting huge amount of dividend paid into the public exchequer in the account of the Federal Government by way of income consequent upon shareholding of the Government but suffice it to say that while the Federal Government is entitled to receive the dividend income, the properties held and acquired by the Company are neither owned nor possessed by the Federal Government within the meaning of the term."
13. From 'a bare reading of the Articles and Memorandum of Association of the appellant Corporation, we can see that though the Federal Government has a dominating hand in all the administrative affairs of appellant Corporation, which, by its nature, a commercial venture, but at the same time, its hundred per cent shareholdings do not vest in the Federal Government. A careful reading of Articles and Memorandum of Association of Appellant Corporation reveals that even the capitalization of profit in terms of Article 138, provides for its distribution by way of dividend.
Moreover, from the language of other articles (ibid) it is evident that share capital and assets, including the immovable properties of the appellant, now subjected to payment of property tax by respondent Authority, are owned by the corporation itself and not by the Federal Government, which is the most important criteria for determining the fact, as to whether the demand of property tax raised by the respondent Authority from the appellant Corporation towards property tax in terms of various notifications has due statutory backing or that the appellant Corporation's properties are exempt from such levy on any factual or legal ground. A reference to SRO of 2001 dated 11.1.2001, by the learned counsel for the appellant in order to challenge the territorial jurisdiction of the respondent Authority from charging such tax from the appellant is also without force, as the body of this notification itself contains reference to other notifications specifying the areas for levying of property tax by the respondent Authority. Thus, the learned Single Judge in Chambers of the Islamabad High Court in its impugned judgment dated 27.5.2008 aptly made reference of various notifications and rightly concluded that the grievance of the appellant voiced in the Writ Petition No, 1562 of 2003 was not tenable in law. Similarly, a reference to Article 165 of the constitution by the appellant in order to avail its benefit of exemption from payment of property tax levied by the respondent on their two immovable properties at Islamabad is without any legal force, as the properties subjected to property tax are not owned by the Federal Government or the Provincial Government within the meaning of such Article. It is evident from the record that the legal status of the appellant, Corporation is that of a listed Public Limited Company and by fiction of law a juristic person, which can hold properties in its own name. It is for this reason that deliberately the appellant have withheld production of title documents of both the properties in question. Thus, before us also, no exception could be taken to such findings of the Islamabad High Court, contained in its impugned judgment.
14. Taking notice of the grievance of the respondent Authority mentioned in Criminal Original Petition No, 108 of 2010, we find that since the substantial amount to the tune of Rs, 20.00 million has already been deposited by the petitioner, therefore, taking a lenient view in the matter, we direct the appellant Corporation to make payment of all the remaining outstanding dues towards property tax etc. within sixty days from the date of this order. In case of failure, it will be open for the petitioner to re-agitate their grievance to this effect, which in turn way entail consequence of criminal/contempt proceedings against the appellant Corporation. With these remarks, this appeal, being devoid of merits is dismissed. The Criminal Original Petition No, 108 of 2010 is also disposed of accordingly.