MR. JUSTICE AZHAR SALEEM BABAR.--(1). Through the instant writ petition filed under section 44 of the AJ &K Interim Constitution Act, 1974, a direction has been sought to restrain the non-petitioners from collecting publicity/advertisement fee by setting aside the notifications dated 21-10-2009 and 27-1-2012, demand notices dated 27-3-2012, 1-11-2011, 20-12-2011, 20-12-2011 and authority letters dated 18-1-2011, 13-10-2011, 13-10-2011, by declaring the same as illegal, void ab initio and without any legal effect.
2.Necessary facts culminating into the instant writ petition are that petitioner, Habib Bank Ltd., is a banking company registered under the laws of Islamic Republic of Pakistan having its head office at Habib Bank Plaza, I.I. Chundrigar Road Karachi 75650, Pakistan and registered office at 4th Floor, Habib Bank Tower, Jinnah Avenue, Islamabad Pakistan having its branches in all cities of Azad Kashmir. Non-petitioners Nos. 1 to 7 are functionaries of Government of AJ&K and are functioning in connection with the affairs of the State of Azad Jammu and Kashmir. The official non-petitioners issued demand notices dated: 27-3-2012, 1-11-2011,20-12-2011, 20-12-2011 for payment of publicity/advertisement fee from the petitioner/bank for sign boards which are erected at various branches of petitioner/bank by hiring the services of the private non-petitioners for collection of the impugned fee and issued the authority letters in their names. The official non-petitioners have sanctioned the levying of the impugned publicity fee vide notification dated 21-10-2009 and 27-1- 2012. The case of the petitioner is that they are not liable to payment.of taxes under law. Moreover, the impugned notifications dated 21-10-2009 and 27-1-2012 and the impugned notices are patently illegal, against the provisions of statutory law and dictums of the superior Courts, hence, are liable to be set aside and levying of publicity fee in the garb of impugned notifications is also without any legal justification. The petitioner/bank feeling aggrieved of the impugned notifications, notices and publicity fee, filed the instant writ petition for setting aside the same.
3.This writ petition was admitted for regular hearing vide order dated 2-5-2012 and non-petitioners were directed to file written statement. Non-petitioners Nos. 4, 5 and 8 filed their written statement whereas on request of rest of the non-petitioners, comments already filed have been treated as written statement.
5(sic) I have heard learned advocates for the parties. Learned counsel for the petitioner has emphasized that labeling of business name of a branch of the bank is not an advertisement; rather it is a statutory obligation provided in the Companies Ordinance and the direction issued by the State Bank of Pakistan (SBP). He has further explained the word "tax" and "fee" and has stressed that the amount demanded by the official non-petitioners does not fall within the definition of 'tax'. It has also been argued that the official non-petitioners are not competent to levy any fee on the petitioner because the official non-petitioners do not provide any service to the petitioner for the demanded fee. Another argument advanced on behalf of the petitioner is that the official non- petitioners cannot demand any amount in jhe garb of fee unless a prior approval from the Government has been obtained and it has been notified in the official gazette. He has referred to section 65 of Local Government Act. So far as collection of fee/tax through contractor is concerned, learned counsel is of the view that a contractor cannot be hired for such a purpose under law.
Learned counsel has relied on the following case-law:-
1. 1999 PLC (C. S.) 1173; 2. 2011 MLD 1987; 3. 2008 YLR 1888; 4. 1991 CLC 354;
6. PLD 1998 SC (AJK) 17; 7. 2007 CLC 35.
6. On the other hand, learned counsel appearing on behalf of the official non-petitioners is of the view that a writ petition is not competent in view of dictum laid down in PLD 2013 SC 413. He further argued that notifications of the year 2009 and prior to that year have been challenged through the instant writ petition, which attract the principle of laches. He has relied on PLD 1993 SC AJ&K 12, 2008 SCR 619, 2012 SCMR 1004 in this regard. Learned counsel is of the view that under section 86 of the Local Government Act, a provision of appeal has been provided to an aggrieved person, so, the petitioner has an alternate remedy. The writ petition is, therefore, not competent in his view. It has also been contended that the petitioner has not challenged the Local Government Act and without doing so notifications under the Act cannot be challenged. Learned counsel has further explained that the Local Government has been providing service to the petitioner in the shape of sweeping the streets etc., so, it cannot be argued that the impugned fees have been demanded without providing any services. While relying on section 89 and 7th Schedule of the Local Government Act, learned counsel has argued that fees and taxes could be calculated through contractors. He has relied on section 90(1)(2) and 8th Schedule of the Local Government Act as well. It has been contended that Municipal Corporations or a District Council is competent to enhance or reduce the amount of tax.
7. It is true that the Government has powers to make rules under section 89 of Local Government Act, 1990 and a Local Council has been empowered to make by-laws in accordance with the rules afore-cited. Clause 21 of 7th Schedule attached to the Act further authorizes that rules may be framed regarding regulation of assessment, collection and administration of taxes, rates, tolls and fees and all matters relating thereto. But the matter has to be seen in view of objections raised by the petitioner. A perusal of impugned demand notices Annexures B-1, B-2, B-3 and B-4 transpires that Municipal Corporation Muzaffarabad and District Council Sudhnooti have demanded different amounts from benches of the Habib Bank Limited as publicity fee. An amount of Rs. 10,800 has been demanded from HBL Nakka branch by District Council Sudhnooti on 20-12-2011 whereas an amount of Rs. 7200 has been demanded from HBL Peeng Branch. In the same way, HBL Trarkhal has been demanded Rs. 7,680. It is pertinent to mention here that HBL Branches have been directed to pay the amount to one Haji Muhammad Azram contractor. Obviously, the impugned notices do not indicate that some tax has been levied on the HBL Branches; rather certain amounts have been demanded as "tax" and "fee" by the official non-petitioners. The terms "tax" and "fee" have been well elaborated by Supreme Court of Azad Jammu and Kashmir in a case reported as 1999 PLC (C.S.)
1173. For proper appreciation, conclusion of the apex Court of the State is reproduced as under:-- "High Court has failed to take note of the fact that tuition fee was being received from only those students who were to receive education from teachers in educational institutions---Student was paying money and in return was getting education---"Tax" was a compulsory exaction of money by a public Authority for a public purpose and was not a payment for any specific service rendered---In respect of "fee" there was "quid pro qua" which meant "something for something" while in "tax" it was absent-In case of payment of fee not only there was "quid pro qua", but was absence of compulsory exaction because tuition fee was to be paid by one who would go to the educational institution and not by one who would not go there---Tuition fee as well as admission fee charged from students was a "fee" and could not by any standard be construed as tax."
8. It is very much clear from the afore-cited extract that tax is g an obligation imposed by an authority for public purpose whereas "fee" is a payment of obligation imposed on the rule of "quid pro quo" which postulates that the authority has to render some service in lieu of fee. It is the contention of the petitioner/bank that under statutory obligations the bank is bound to display its name on a conspicuous place of its branch. Learned counsel for the official non-petitioners has come up with the contention that service to the petitioner is being provided in the shape of cleaning and providing bins, so, authorities under the Local Government Act are empowered to levy tax/fee on the petitioner. The argument does not sound reason because the mentioned services are not provided to the petitioner in particular. The official non-petitioners may be empowered to levy tax for such services because keeping the streets clean may form 'public purpose' and to my estimation, the Municipal Corporations have already levied taxes under this head.
9.It is the claim of the petitioner/bank that displaying of name of different branches of the HBL is not an advertisement. Learned counsel has referred to section 143(a) of Companies Ordinance 1984 which states that:- "Every limited company.-- (a)Shall paint or affix and keep painted or affixed its name on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible and in English or Urdu characters, and also, if the registered office is situate in a place beyond the local limits of the ordinary original civil jurisdiction of a High Court, in the character of one of the vernacular languages used in that place."
10. He has further referred to paragraph 51 of Branches 'Licensing Policy (BLP) issued by the State Bank of Pakistan which reads as under:- `Every licensed place of business of Banks/DFIs shall carry a name which should be prominently displayed outside the place of business."
11.In the estimation of learned counsel, the petitioner is under obligation to abide by the statutory provisions of afore-cited law, so, a tax/fee cannot be levied against a statutory provision of law.
The argument cannot be agreed to in general, for the reason that an authority established under law cannot be restrained from levying tax/fee even if a business has been established under some specific provisions of law. However, it is agreed that displaying of name of bank outside a particular branch does not fall within the definition of 'advertisement'. In case of Coca-Cola Beverages (2011 MLD 1987), Lahore High Court has held as under:- "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 signboards 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 116 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 "tax" 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 its 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 v. Haji Mir Muhammad Naseer and others, "2008 YLR 1889" titled Shabbir Hussain v. Tehsil Municipal Administration Rahimyar Khan through Nazim and 3 others, and "1991 CLC 354" titled Glaxo Laboratories (Pakistan) Limited v. Union Council, Dulu Khurd through Chairman and 4 others."
12.In view of the aforementioned conclusion of the Lahore High Court, it is therefore, concluded that phraseology of the impugned demand notices indicates that the petitioner has been demanding different amounts as publicity fee, which the official non-petitioners are not empowered under law to impose.
13.I find logic in the argument that a tax/fee cannot be imposed without its publication in the official gazette. Under section 65 of the Local Government Act, 1990, taxes, rates, tolls and fees have to be notified in the prescribed manner. Learned counsel for the official non-petitioners could not satisfy the Court that imposition of taxes/fees have properly been notified. The impugned demand notices of advertisement fee are, therefore, bad in law on this score as well.
14.So far as collection of tax/fee through contractor is concerned, the matter has already been discussed in a judgment cited as 2011 MLD 1987 Lahore. Relevant paragraph is reproduced hereunder:- "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 provision 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 31-5- 2010 passed in Writ Petition No. 2078 of 2010 titled "Muhammad Munir Abdullah v. T.M.A and others" reported as "2010 YLR 2543."
15.Learned counsel for the official non-petitioners has argued that notifications of the year 2009 and earlier have been challenged through the instant writ petition, so, the petition is barred by the principle of laches. This argument does not support the case of the non-petitioners for the reason that fees are being demanded continuously under the impugned notifications, so, it creates a continuous cause of action in favour of the petitioner. Principle of laches does not attract in the case at hand.
Upshot of the above discussion is that the impugned notices demanding publicity fee from different branches of the HBL are not warranted by law, therefore, the impugned notices are set- aside. The non-petitioners are restrained from levying or demanding any tax/fee for displaying name of the Bank outside the building of a branch. The writ petition is accepted.