' NASIR-UL-MULK, J.---The common question in these connected cases is regarding legality of imposition of loading and unloading tax on the cement and sand etc. And annual license fee on cement factories imposed by the Local Tehsil Councils. The appellant in Civil Appeal No,318 of 2011, Messrs Lucky Cement Factory Limited is aggrieved of the imposition of Rs,5 per ton on loading and unloading of cement and sand and imposition of Rs,50,00,000 per annum license fee on its factory located in. District Lakki Marwat by the Tehsil Municipal Administration by notification dated 5-5- 2009. The notification was challenged before the Peshawar High Court, D.I. Khan Bench in Writ Petition No,385 of 2009 which was dismissed on 30-3-2010. Civil Appeals Nos,364 and 365 of 2011 have been filed respectively by Messrs Cherat Cement Company Limited and Messrs Army Welfare Trust, both located in District Nowshera, impugning the common judgment delivered by the Peshawar High Court dismissing their writ petitions against the imposition of license fee by the Tehsil Council. Nowshera, of Rs,20 per truck on loading and unloading of cement and sand etc, and license fee of Rs,500,000 per annum on their cement factories. The grievance of the petitioner, Haji Muhammad Ramzan, in Civil Petition No,208 of 2013, however, is slightly different in that he has questioned the imposition by Tehsil Municipal Administration, Lakki Marwat of loading and unloading fee on the minerals extracted from the mines leased out to the petitioner. His Writ Petition No, 702 of 2011 filed before the D.I. Khan Bench of the Peshawar High Court was dismissed in the light of judgment delivered in Writ Petition No, 385 of 2009 filed by Messrs Lakki Cement Factory Limited.
2. We may state at the outset that during the course of hearing of these matters Mr. Kalam Badshah, Tehsil Municipal Officer. Lakki Marwat, stated before the Court that since the imposition of the impugned taxes, they had not demanded the payment of license fee and that the same will not be claimed presently but such imposition, if proposed, will be considered after adopting proper procedure. Since similar concessional statement was not made on behalf of the Tehsil Council, Nowshera, the validity of the imposition of license fee on cement still requires determination.
3. Mr. Athar Minallah, learned Advocate Supreme Court appearing on behalf of the appellant in Civil Appeals Nos, 318 and 364 of 2011, raised some objections to the procedure followed by the Tehsil Council, Lakki Marwat and made extensive submissions with reference to various documents placed on record which we examined in the light of the relevant statutory provisions. Before we advert to these submissions, however, it will be appropriate to refer to the relevant statutory provisions under which the respondents have levied the impugned fees.
4. The taxing provision in the N.W.F.P. Local Government Ordinance, 2001 is incorporated as section 116 and reads as follows:-- "116. Taxes to be levied.---(1) A Council may levy taxes, cesses, fees, rates, rents, tolls, charge, surcharge and levies specified in the Second Schedule: ' Provided that Government shall vet the tax proposal prior to the approval by the concerned council: ' Provided further that the proposal shall be vetted within thirty days from the date of receipt of the proposal failing which it would be deemed to have been vetted by Government.
(2) No tax shall be levied without previous publication of the tax proposal and after inviting and hearing public objections.
(3) A Council may, subject to provisos of subsection (1), increase, reduce, suspend, abolish or exempt any tax." `Council' has been defined in section 2(vi) to include Tehsil Council. The Second Schedule contains five Parts; Part III relates to Tehsil Council and enumerates fifteen items on which the Council has been empowered to impose taxes. Item No,9, which has been relied upon by the learned counsel representing the Tehsil Council reads:- "9. Fee for licenses or permits and penalties or fines for violations."
5. Mr. Athar Minallah. Learned Advocate Supreme Court appearing for the appellants however submitted that the fee on licenses referred to in item No,9 is restricted to activities for carrying of which the law provides acquisition of licenses and in this contents he referred to Para 89 of the Sixth Schedule of the Ordinance. To appreciate the contents of Para 89 of the Sixth Schedule reference may be made to section 195 of the Ordinance which reads:-- "195. General powers of local governments, etc.--- Notwithstanding any specific provision of this Ordinance, every local government, Village Council and Neighborhood Council shall perform their functions conferred by or under this Ordinance and in performance of their respective functions shall exercise such powers and follow such procedures as are enumerated in the Sixth Schedule."
' Whereas section 116 relates to the taxing powers of the Council the provision of section 195 read with Sixth Schedule lays down the general functions to be performed by the Council. Para 89 of the Sixth Schedule is titled "Licences required for carrying on of certain occupation.--
(1) No person of any of the following classes, namely, (a) butchers and vendors of poultry, game or fish.
(b) .......................................................................................................................
(n) any other trades and occupations specified in the bye-laws, or through public notice by local council from time to time shall carry on his trade, calling or occupation in such part of a local area as may be designated by the local council unless he has applied for and obtained a licence in this behalf from the concerned local government.
(2), (3)..
(4) A local council may charge fees for the grant of licences under this paragraph."
' The activities mentioned in Item Nos,(a) to (n) do not include manufacture of cement. It is also not the case of the respondents that such manufacturing has been included in any bye-laws of the Local Council made under Clause (n). The opening words of Para 89 makes it clear that the activity mentioned therein cannot be carried out without obtaining license from the concerned Council.
Reading Item No,9 of Part III of the Second Schedule with Para 89 of the Sixth Schedule makes it clear that imposition of fee mentioned in the former would be limited to the activities specified in the latter provision.
6. We now turn to Para 44 of the Sixth Schedule that reads:- "44. Dangerous and Offensive Articles and Trades.---(1) The articles and trades specified in the Annex shall be deemed to be dangerous or offensive for the purpose of this paragraph.
(2) Except under and in conformity with the conditions of a licence granted by the concerned local government,
(a) no person shall carry on any dangerous or offensive trade;
(b) no premises shall be used or suffered to be used for any dangerous or offensive trade; and
(c) no person shall store or keep in any premises
(i) any dangerous or offensive articles for domestic use; or
(ii) any dangerous or offensive articles in excess of such limits and quantity as may be fixed by by- laws.
(3) Notwithstanding the grant of a licence under sub-paragraph (2), the concerned local government may, for reasons to be recorded, and after notice to the person affected, pass an order for the prohibition, closure or removal of any offensive and dangerous trade or article if such action is deemed expedient or necessary to implement the order."
' The above provision requires a person engaged in any activity that is dangerous and offensive listed in the Annex to obtain license from the Local Council. The object of the said license appears to be to empower the Local Council to regulate through conditions imposed in the license the activities that are dangerous and offensive. The activities mentioned in Para 44 read with Annex are of a different nature than those enumerated in Para 89. The purpose of the former provision is to protect the public from the hazards of dangerous and offensive activities whereas the license issued under Para 89 would require the licensee to carry on his trade, calling or occupation in such part of the local area as designated by the Council. With regard to the issue before us a marked distinction appears in the two provisions, Whereas Para 89 expressly empowers the Local Council to charge fee for the grant of license, no such provision is made for the issuance of license under Para 44. Such omission in the latter provision clearly indicates that the legislator did not intend to empower the Local Council to levy fee on the license A issued under Para 44. It is settled that fee can be charged only for services provided. It appears that for the activities mentioned in Para 89 to be carried out in a specified local area the Local Council may provide some services, whereas such services may not be rendered for regulating the activities enumerated in Para 44, where the Local Council is mandated to take preventive measures. Perhaps this distinction escaped the notice of the High Court which proceeded on the premise that license fee could be imposed on the items mentioned in the Annex to Para 44, that included Item 24, namely, "Manufacture of cement and hume pipes".
7. There is another aspect of the case. The High Court in the judgment delivered in "Messrs Cherat Cement Company Limited" divided Item No,24 into two parts, namely, manufacture of cement and manufacture of hume pipes. The manufacture of cement was not found to have nexus with pipes.
This construction led the Court to conclude that since the Council was empowered to regulate manufacturing of cement through license, the imposition of license fee on manufacture of cement was within its competence. Mr. Athar Minallah, learned Advocate Supreme Court on behalf of the appellant submitted that the mentioned provision is restricted to manufacture of pipes, whereas, Mr. Muhammad Akram Sheikh and Mr. Muzammil Khan, learned counsel for the respondents contended that manufacture of cement was an activity independent and separate from the manufacture of hume pipes.
8. We tend to agree with the learned counsel for the appellants. There are different kinds of Reinforced Concrete Cement (RCC) pipes manufactured for a variety of purposes, for example drainage pipes, sewerage pipes, concrete pipes, cement pipes and hume pipes. The latter is named after Walter Reginald Hume, an Australian who invented the pipe, which is also khown as spun pipe for it is manufactured while spinning the cage at the time of pouring concrete. The cement pipes are a kind different than hume pipes. Item No,24 on plain reading relates to pipes i,e, 'hume pipes' and 'cement pipes' as the words 'manufacture of cement' is not followed by any punctuation. Had the legislature intended to make manufacturing of cement in the Annex, the same would have been mentioned in a separate item and not together with the hume pipes in single statement. This appears to be the only reasonable construction of Item No,24. Even if the said phrase is open to two interpretations, according to the well settled principle of construction of taxing provisions, the meaning favourable to the subject is to be preferred. Furthermore, the taxing provisions are to be construed strictly and the intention to impose tax or duty must be shown by clear and unambiguous language. Thus, even if Para 44 of the Sixth Schedule is considered to confer power upon the Local Council to impose fee on the grant of license for items mentioned in the Annex, the manufacture of cement would not fall within the scope of Item No,24. Examining the issue from either aspect, the imposition of the license fee on cement factories was not within the competence of the Tehsil Council.
9. Next we take up the fee on loading and unloading of cement and minerals. This issue was taken before the High Court in the case of Messrs Cherat Cement Company Limited and Messrs Army Welfare Trust but has not been attended to. On the other hand, this appears to be the only question taken up before the High Court by Messrs Lucky Cement Factory Limited and Haji Muhammad Ramzan. Here too the Court had not examined the issue from the perspective of the petitioners but had dismissed the petitions on the ground that there was some memorandum of understanding arrived at etween the transporters of goods and the Tehsil Municipal Council, Lucky Marwat, Mr. Muhammad Akram Sheikh learned Senior Advocate Supreme Court appearing for the respondents, contended that the loading and unloading fee is imposed upon the carriers of the cement and not on the manufacturers and thus the appellants have no locus standi to question the levy as they do not fall within the meaning of aggrieved persons. Responding to the above contention, the learned counsel for the appellants submitted that notices for payment of the fee are being issued to the appellants and not to the truck owneRs, There is nothing on the record to resolve this factual controversy. However, we proceed to examine the question from the perspective of the appellant, Messrs Lucky Cement Factory Limited and the petitioner, Haji Muhammad Ramzan who allege that the fee is being recovered from them. Mr. Muzammil Khan, learned Advocate Supreme Court appearing on behalf of Nazim, Town Council and Town Municipal Officer, Nowshera (Civil Appeal No, 364 of 2011), submitted that the levy of such fee is justified under Item No,1 of Part III of the Second Schedule which provides for "local tax on services". When confronted, neither of the learned counsel for the respondents was able to show if any services were provided by the local council to the appellants for loading and unloading or for the purpose of transporting cement or other material in trucks or other vehicles. It was feebly contended on behalf of the respondents that the Tehsil Council is to maintain the roads used by the carriers for transporting the material. If that be the justification, the fee cannot be limited to the trucks engaged in carrying out material but shall be charged on all vehicles using the roads. On behalf of Messrs Cherat Cement Company Limited it was pointed out that the appellant had constructed its own road to the Factory. Be that as it may, the Tehsil Council can impose taxes on services provided by it and not on services privately acquired. The learned counsel for the respondents has not been able to refer to any provision of the Ordinance or the Schedules which would legally justify the imposition of tax by the Tehsil Council on activity such as loading and unloading of material or on their carriage.
10. As regards procedure adopted by the Tehsil Local Council for imposition of the said levies, it was not disputed by the learned counsel for the appellants that so far as the Tehsil Council Nowshera is concerned due public notice was given, objections invited and those submitted were duly examined and rejected. The learned counsel however had reservations over the procedure adopted by the Tehsil Council Lucky Marwat, mainly on the ground that no right of hearing was given to the appellants to submit their objections to the proposed levy and further that the levy is first to be proposed by the Tehsil Administration and then examined and approved by the Tehsil Council whereas the proposal was directly taken up by the Council. Mr. Muhammad Akram Sheikh learned Senior Advocate Supreme Court referred to Baldev Singh v. State of Himachal Pradesh (AIR 1997 SC 1239) to submit that right of hearing in such cases does not include personal hearing. Be that as it may, we need not to dilate upon the procedural flaws, if any, as we have already held that the impositions .Were beyond the competence of the Local Council.
11. In the light of the foregoing discussion, we hold that the levy of license fee on the manufacture of cement and the fee on loading and unloading of cement as well as the minerals was not within the powers of the Tehsil Councils, Lucky Marwat and Nowshera. The appeals are therefore allowed. The impugned notifications to the extent of imposition of license fee on manufacture of cement and tax on loading and unloading of cement and other material are set aside having being issued without lawful authority. Civil Petition No, 208 of 2013 is converted into appeal and allowed in the same terms.