' MRS. ASHRAF JAHAN, J.--- By this petition, The Karachi Goan Association has impugned the demand notice dated 2-8-2011 in respect of property tax amounting to Rs,21,40107 along with proposed penalty, issued by Deputy District Officer and Assistant Collector, Property Tax G-Division, Karachi.
2. The facts giving rise to this litigation are that the petitioner, is a society registered under the provisions of Societies Act, 1860, whose main object is to provide social and cultural facilities to its members on charitable basis, had been issued a lease by the Municipality of Karachi on 16-12-1924 for 28,302 square yards of land on a Plot No, J.M.1/79, Jamshed Quarters, M.A. Jinnah Road, Karachi (hereinafter referred to as the "subject property") for the establishment of a Gymkhana. It is the case of the petitioner that since the date of issuance of lease," they had used the subject property solely for the purpose of Gymkhana i,e, as a playground, which is rented out to general public without any discrimination on "first come first served" basis against a nominal fee, which is entirely used for the benefit of the society and the subject property. It is being used by all members of the public for playing Cricket, Hockey and Football without any discrimination whatsoever. On 2nd August, 2011 the petitioner received a notice from the respondent No,1 directing them to pay a sum of Rs,21,40,107 (inclusive of a proposed 50% penalty) in respect of the property tax under the provisions of Sindh Urban Immovable Property Tax Act, 1958 (hereinafter referred to as the 'Act of 1958'). It is the case of the petitioner that under the provision of clause (e) of section 4 of the Act of 1958, "public parks and playgrounds" are exempt from payment of property tax, which provision has recently been exhaustively examined by a Division Bench of this Court in C.Ps. Nos.D-892 of 2004, D-1364 of 2008 and D-2499 of 2010, which were disposed of by a common Judgment dated 24-6-2011 in favour of the petitioners confirming therein that public playgrounds are exempted from the above levy of tax. This decision is reported as Pakistan Cricket Board v. D.G. Excise and Taxation 2011 CLC 1894 ("Earlier judgment"): Therefore, it has been prayed by the petitioner that their petition may be allowed and the respondents may be restrained from demanding property tax from them in respect of subject property.
3. The respondent Nos.l (i) and (ii) have filed their parawise comments on 24-11-2011 and have taken the stand, that notice dated 2nd August, 2011 for payment of outstanding property tax dues amounting to Rs,21,40,107 together with 50% proposed penalty had rightly been issued to the petitioner as they are chronic defaulter and avoiding to pay the Government outstanding dues of tax since long.
4. Further, it is the case of the respondents that the petitioner does not fall under clause (e) of section 4 of the Act of 1958, as the subject property is a commercial entity, being run for the purpose of earning profits and benefits by deriving rent from the paid members. They have further asserted that the subject property is not being used for general public and the Excise and Taxation Department (respondents) have already filed a Civil Appeal before the Hon'ble Supreme Court of Pakistan against the Earlier Judgment, relied by the petitioner and the same is pending for decision before the apex court. It is also the case of respondents that as the petitioner have directly approached this Court without availing the remedy under the Act of 1958 provided for such grievances, therefore, the present petition is not maintainable in law on this ground.
5. We have heard the learned counsel appearing for the parties. It is contended by the learned counsel for petitioner that the subject property is owned by the petitioner as a playground which is exempted from payment of tax under clause (e) of section 4 of the Act of 1958, therefore, the notice dated 2-8-2011 has been issued by the respondents in excess of their jurisdiction and hence the same is void. He has also drawn our attention to the dictionary meanings of word 'Gymkhana' and stated that petitioner association is entertaining general public for use of playground and it is commonly taking nominal rent from different schools or associations for allowing them use of playground for conducting their sports activities. There is also proper pitch for the cricket and even test matches had been played on this ground, therefore it cannot be said that this ground is being utilized for any commercial purposes. In support of their case they have mainly relied upon the Earlier Judgment.
6. Conversely, it is contended by the learned A.A.-G. That Karachi Goan Association is only for the Goans and not for ordinary public. There is a club as well, therefore their plot of land is not covered under the definition as provided under section 4(e) of the Act. He has also pointed out that statutory remedy provided under the law has not been availed by them, therefore they are not entitled for any relief. In support of his contention he has relied upon the case of Hatim Ali Bhatti v, The Excise and Taxation Officer etc. (NLR 1989 TAX 38) and also referred to pending appeal before the Supreme Court of Pakistan.
7. In rebuttal learned counsel for the petitioner has clarified that the club building is a separate property as evident from the Annexure A/3, which is resolution dated 10-8-2011 issued on the letter head of society, by the Society Secretary, showing the address as '93 Depot Lines Karachi' whereas the playground is on separate Property bearing No,J.M-1/79 Jamshed Quarters, Karachi, therefore, arguments advanced by the learned A.A.-G. Have no force.
8. We have considered the arguments advanced before us and have perused the case record. It is an admitted fact that the Earlier judgment relied by the petitioner has been challenged by the respondents before the Hon'ble Supreme Court of Pakistan, wherein leave has been granted.
However, the judgment has not been suspended, and in this manner final adjudication of this dispute is still awaited from the apex court.
9. Reverting to the facts of present appeal, it is yet to be seen whether the Earlier Judgment is applicable to the facts of present petition or not. The perusal of present petition goes to show that after the receipt of impugned demand notice, the petitioner have straightaway challenged the same before the High Court under Article 199 of the Constitution and have not tried to avail the remedy of appeal/revision before the competent authorities, under the Act of 1958. The perusal of the Earlier Judgment reveals that the learned Division Bench before passing its judgment had earlier referred the cases to the Director-General, Excise and Taxation Department to decide the matter after hearing the parties.
10. In the case in hand, it is not the only crucial point for consideration that, whether this case is covered by the Earlier Judgment but before that the disputed questions of fact involved in this petition which need proper adjudication are that whether as per terms and conditions of lease dated 16-12-1924 and actual utilization of leased land by the petitioner the exempting provision of section 4(e) of Act of 1958 relating "to public parks and playgrounds" covers the case of petitioner or not? Moreover whether the petitioner is not earning profits and benefits through allowing the use of subject property to persons other than its members for putting it to commercial use as alleged by the respondents. In this case admittedly after receipt of demand notice dated 2-8-2011 the petitioners have not submitted its reply or approached the authorities in the hierarchy of Act of 1958 to put up their claim before them for exemption. While respondents in their parawise comments have disputed their claim on the ground that the disputed property does not fall under the provisions of clause (e) of section 4 of the Act of 1958 as it is not being used by the petitioner for general public playground, but for the purpose of earning profit. In addition to it, it is also an admitted position in the case that against the disputed levy and demand of property tax available remedies of appeal and revision provided in section 10 of the Act of 1958 have not been availed by the petitioner which appears to be adequate alternate remedy within the meaning of Article 199 of the Constitution.
11. Considering all these facts and also keeping in view the Earlier Judgment relied by the petitioner, we deem it appropriate in order to meet the ends of justice, to follow the similar course which was followed by this Court in the Earlier Judgment. Accordingly, the impugned notice is' Set aside but the matter is referred to the Director-General, Excise and Taxation Department, Government of Sindh to adjudicate the same after giving proper opportunity of hearing to the petitioners, through a speaking order. The D.G. Excise and Taxation shall determine whether the property for which exemption is being claimed is being put to commercial use or its usage is in terms as claimed by the petitioner. In considering these points, the D.G. Shall of course act strictly in accordance with the law and parameters as laid down and established by and in the Earlier Judgment. The entire exercise is to be completed within 60 days from today. No action adverse or detrimental to the petitioner may be taken till the exercise has been completed. The petition is accordingly disposed of in above terms.