This order will decide W.Ps. No. 2192/2007 (instant), 1728/2010, 4430/2010 & 1346/2011, instituted by the same petitioner challenging the imposition of fee/charges by the Chaklala Cantonment Board Chaklala, and Cantonment Board Wah Cantt., on various categories of sign Boards installed on the front of the shops/offices for advertisement of commercial activities andcollection of the same by the Board from the petitioner through a contractor.
2. A demand bill for an amount of Rs. 74520/- dated 10.04.2007, issued by the Chaklala Cantonment Board Chaklala for the period commencing 01.07.2006 to 30.06.2007 is the subject matter of W.P.No. 7192/2007.
A notice dated 23.02.2010 issued by Cantonment Board Chaklala Cantt., demanding the amount of Rs. 22,89,916/- is the subject matter of W.P.No. 1728/2010.
Fixation of advertisement charges through reference CBR No. 10 dated 20.08.2009 by the respondent Cantonment Board Chaklala is the subject matter of W.P. No. 4430/2010.
A notice dated 16.04.2011 issued by the Cantonment Board Wah Cantt, requiring the petitioner to pay Rs. 8,17,500/- as advertisement charges on account of various advertisements displayed on the face of various commercial concerns is the subject matter of the W.P,No. 1346/2011.
3. In all the petitions comments were sought from the respondents, the same were submitted in the first three petitions. The learned counsel for the respondents relies on those comments for W.P.No. 1346/2011 as well. The parties are ready to advance their arguments. The proceedings will be treated as one in the notice cases.
4. It is contended by the learned counsel for the petitioners that the petitioner a public limited company, is one of the leading manufacturers and distributors of the aerated Beverages; that the notice and resolution requiring the petitioner to pay the advertisement charges/fees on various categories of sign Boards is violative of the Provisions of the Cantonment Act, 1924 and the Collection of the same through a contractor is not warranted by law. He argues that under Section 60 of the Cantonment Act. 1924, the Cantonment Board may impose only those taxes with the previous sanction of the Central Government which may be under any enactment imposed in any Municipality of the Province concerned; that under the same Section, the imposition could only be effected after its Notification in the official gazette which is lacking in the instant case. Places reliance on "1991 CLC 354 titled Glaxo Laboratories (Pakistan) Limited Versus. Union Council, Dulu Khurd through Chairman and 4 others, "PLD 1978 Supreme Court 190" titled Muhammad Suleman etc. Versus Abdul Ghani. "PLD 1977 Supreme Court 639" titled Muhammad Ishaq Versus Chief Administrator of Auqaf, Punjab, and "PLD 1998 Peshawar 26" titled Qarshi Industries (Private) Ltd. through Deputy Manager (Admin) Versus Government of N.W.F.P through Secretary Local, Government and Rural Development Department Peshawar and 10 others, that, no such tax is permissible under the prevalent Punjab Local Government Ordinance, 2001, therefore, cannot be imposed and collected by the respondents. Places reliance on "PLD 2003 Lahore 730" titled Mst.
Nargis Moeen and another Versus Government of Pakistan through Secretary Defence, Islamabad and another, "2006 CLC 1674" titled Station Commander, Chaklala Gantt. Versus Col. (R)
Muhammad Abbas Malik, "2007 YLR 1547" titled Cantonment Board, Lahore Cantt. through Executive Officer and 2 others Versus Mst. Sultan Jahan, "2007 YLR 1681" titled Mst. Sultan Jahan Versus Cantonment Board, Lahore Gantt., through Executive Officer and 2 others, that the imposition of fax has to be preceded by the mechanism and procedure provided under Sections 61, 62 and 63 of the Act, which postulates the drawing of tax proposal, fixation of rates and invitations of objections etc. This requirement of law which is sine qua none for imposition of tax has not been satisfied; that a tax could only be collected for the facilities provided by the State or its Departments or a local authority and a fee could only be collected for the services rendered on the principle of Quid pro quo, which is not the case in hand. Places reliance on 1999 PLC (C.S) 1173" titled Azad Government of the State of Jammu and Kashmir through Chief Secretary Azad Kashmir Government, Civil Secretariat Muzaffarabad Versus Haji Mir Muhammad Naseer and others, and W.P.No. 3222 of 2004; that even if the tax could be imposed and collected, the same could not be done through a contractor as letting out such rights to a contractor is not permissible under law. Places reliance on "2004 YLR 366" titled Messers Shamim & Co, Versus Tehsil Municipal Administration, Multan City through Nazim and 2 others, and "2005 MLD 1520" titled Arbab Contracting & Co. through Managing Partner Versus Tehsil Municipal Administration Multan and 2 others. It is further argued that no tax could be charged on the bill boards. Relies on "2008 YLR 1889" titled Shabbir Hussain Versus Tehsil Municipal Administration Rahimyar Khan through Nazim and 3 others.
5. On the other hand, it is contended by the learned counsel appearing on behalf of the Board that the Cantonment Board had under Section 60 of the Cantonments Act, 1924, power for imposition of the taxes and fees as the contemporary local council have under Section 116 of the Local Government Ordinance, 2001; that the imposition of the taxes was notified in accordance with law and that the technicalities Should not be allowed to defeat the ends of justice. He relies on "PLD 2003 Karachi 495" titled Clifton and Defence Traders Welfare Association through General Secretary Versus President, Clifton Cantonment Board, Karachi and 4 others, and "2009 MLD 628" tilled Human Safety Foundation Versus Govt. of Sindh and 11 others.
6. I have heard the learned counsel for the parties and have also gone through the record.
7. The language of notices in all the cases reveals that the respondents have sought the payment of fees for the sign boards installed on the front of the shops. The petitioners have been using the shutter gates or the sign boards of the shops for displaying the name of their products or their logo.
It has no relation with any advertisement made through the hoarding boards, bill boards or any other mode of advertisement. Under Section 11.6 of the Punjab Local Government Ordinance, 2001, read with Item No. 6 of Part 3 of the Second schedule appended to it, the Tehsil Municipal Administration has the power to levy the tax or fee on advertisement other than on radio, television and bill boards. Under Section 60 of the Cantonments Act, 1924, only those taxes could be imposed that are permitted to be imposed under any enactment in any Municipality in the Province. The question is whether a tax or fee can be imposed on the use of some space borrowed by the petitioner from the shopkeepers. To resolve this issue, the terms 'fee' and 'taxes' have to be defined and a distinction has to be drawn inter se the two definitions. Fee is meant to defray the cost of particular services rendered to a particular individual on the principle of Quid pro quo. Tax is levied as a part of common burden. It is imposed for public purpose. The Board has neither provided any services to the petitioner for displaying the name of its product or its logo on the shops of individuals. Thus, the money demanded by the respondents cannot be termed as a fee. As far the imposition of tax is concerned, the same cannot be done without satisfying the pre-conditions of drawing of proposals fixation of liability, determination of, the rates, invitation of objections and publication of the notification. The imposition may take effect only from the day of kits notification.
The pre-conditions as laid down under Sections 61 to 63 of the Cantonments Act, 1924, having not been satisfied, the imposition, the demand and the collection of taxes by the respondents would be a sheer illegality and an activity devoid of any sanction of law. In my view, I seek supports from the judgments cited as "1999 PLC (C.S) 1173" titled Azad Government of the State of Jammu and Kashmir through Chief Secretary Azad Kashmir Government, Civil Secretariat Muzaffarabad Versus Haji Mir Muhammad Naseer and others, "2008 YLR 1889" titled Shabbir Hussain Versus Tehsil Municipal Administration Rahimyar Khan through Nazim and 3 others, and "1991 CLC 354" titled Glaxo Laboratories (Pakistan) Limited Versus Union Council, Dulu Khurd through Chairman and 4 others. The judgment "2009 MLD 628" cited by the learned counsel for the respondents does not lay down any ratio whether such tax could be imposed or not. In that case the Court had directed the authorities concerned to take preventive measures to avoid the casualties in future, In the judgment "PLD 2003 Karachi 495" only the importance of advertisement in the world of commerce was appreciated but the imposition of tax was not the moot point. These judgments render little support to the stance taken by the respondents. No rule framed under the Act ibid provides for the collection of the fee for the use of borrowed space of the sign boards of the shops on an internal arrangement between the borrower and the "2007 CLC 35" titled Messers Ace Quality (Pvt.) Limited through Chief Executive Versus Tehsil Municipal Administration, Multan Saddar through Nazim and 3 others. The petitioners have also challenged the authority of an individual claiming to be a contractor to collect the fee and taxes. Section 112 of the above Act, provides the competence for entering into a contract. It reads as follows: "Section 112: Contracts by whom to be executed.--Subject to the provisions of this Chapter, ever [Board] shall be competent to enter into and perform any contract necessary for the purposes of this Act."
The contracts permissible under the section are those which are necessary for the "Purpose of the Act". The Purpose includes the duties and discretionary functions of the Board which are laid down under Sections 116 and 117 of the Act. The collection of the fees and tax is not one of the purposes of the Act. The collection of fees and taxes could be the means for ensuring the accomplishment of the purposes of this Act but not by any stretch of perception a Purpose itself. Thus the fees and taxes could not be collected through a contractor. The imposition and collection of the amount in question through the impugned notice is an illegality in itself. Demanding the same through a contractor adds an element of contempt and aggression to it. I rely on the judgment dated 31.05.2010 passed in W.P. No. 2078/2010 titled 'Muhammad Munir Abdullah Versus T.M.A etc." reported as "2010 YLR 2543".
8. For the reasons discussed above, the imposition of tax/fee by the respondents without satisfying the preconditions for imposition of tax, without providing any corresponding service or facility, the said taxes being not prevalent in the collateral local councils and the issuance of the impugned notices on account of being issued on behalf of a contractor are declared illegal, ineffective on the rights of the petitioners and is set-aside. These petitions stand, accepted.