ASLAM RIAZ HUSSAIN, J.-This judgment shall dispose of Civil Appeals No. K-85/72, K-86/72 and K- 87/72 as they are directed against the same judgment of, the Sind High Court dated 6-10-1972, dismissing the Constitu--tional petition filed by the petitioners and also because all of them involve the same questions of law.
2. The petitioners in Civil Appeals Nos. K-85 and 87 of 1972, namely Hirjina Salt & Chemical (Pale.)
Ltd., Karachi, and Messrs Dhabeji Salt Works Ltd., Karachi, are companies incorporated under the Companies Act, having their registered offices at Karachi. They own big salt works at Gharo and Dhabeji, respectively, in Taluka Mirpur Sakro, in District Thatha, where salt is manufactured for export to foreign countries through their offices at Karachi. The appellant in Civil Appeal No. K- 86/72, is a registered firm with its office at Karachi and owns premises located inter alia at Dhabeji, Gharo, where raw bones collected from whole of Pakistan are crushed into powder where after the power is sold for export to Belgium, Japan and U. K., through its office at Karachi.
3. By a Notification dated 7-10-1963, the Deputy Commissioner Thatta declared, inter alia, Dhabeji and Gharo as well as the salt works of the appellants in Appeals Nos. K-85 and K-86 of 1972, as Markets within the meaning of rule 4 of the West Pakistan Union Council Dharat (Market Fees) Rules, 1961 (hereinafter called the Dharat Rules), and sanctioned a levy of dharat (Market fee) by the Union Council Gharo within the area whereof the aforementioned manufacturing works or the factories of the appellants were situated. The fee was levied at the rate of one paisa per rupee of the sale price of the goods sold therein retail the rate of two paisas per rupee of the sale price, when sold wholesale.
4. A demand of fee was thereafter made from the companies by the Union Council concerned. The appellants protested and denied their liability to pay the fee on the ground that salt and bones were only manu--factured at their respective factories/works at Dhabeji and Gharo and all transactions of sales of the products used to take place at their respective registered offices at Karachi. In reply the respondent asserted that the demand made by the Union Council was legal.
Demand Notices were again issued against the appellants but the appellants again denied their liability. Ultimately the Mukhtiarkar issued notices to the appellants, threaten--ing action against them under the Land Revenue Act. Thereafter all the three appellant-companies challenged the levy of the market fee through separate writ petitions in the High court of Sind, on the grounds, inter alia, that market fee was not leviable on them as only manufacture of salt and crushing of raw bones took place in those premises, and further that the respondent Union Council did not render any service in lieu of the fee levied on them.
5. The respondents contested the petitions and claimed that market fee was legally levied but did not dispute, in their written statements or the affidavits filed therewith that the premises were used only for manufactur--ing of salt or crushing of bones and took up the position that since the premises where the goods were manufactured for sale, were situated within the jurisdiction/limits of the Union Council, the appellants were liable to pay the market fee. Another affidavit was, however, filed by the respondents sub--sequently on 14-5-1969, in paragraphs 2 and 3 whereof they took the following stand :-
(2) That it is denied that no sale whatsoever takes place at the petitioners' salt works at Dhabeji. In fact goods are loaded for transport from the Factory and property in goods passes to the purchasers at Dhabeji. However, under the Basic Democracies Order, 1959, it is competent to the Government of West Pakistan to frame Rules for the levy of tees and under rules 3 and 4 to declare any premises or areas within the Union Council, used for manufacture of goods which are intended for sale, as market. The Notification in question has declared the petitioner's manufacturing premises at Dhabeji as a market within the definition given by the relevant Rules.
(3) That it is submitted that there need be no quid pro quo between the collection of fees and the amenities or the services, as the fee is not a payment in the nature of price paid for buying any article or remuneration for services rendered persaunt to a contract. However, it is submitted that amount collected through this fee is being spent by the Union, Council Gharo on maintaining roads, keeping the areas clean and hygienic and for such allied purposes from which the petitioners also receive or are entitled to receive equal benefits."
6. At the hearing of the writ petitions before the High Court the contentions raised on behalf of the appellants were that rule 4 of the West Pakistan Union Council Dharat (Market Fees) Rules, 1961, framed under Article 89 of the Basic Democracies Order, 1959, which defines the word 'Market' is ultra vires of the present Statute, in that it has given to the said word a meaning beyond the one envisaged by the Basic Demo--cracies Order ; secondly that the imposition made by the Union Council was in fact a 'Tax' and not 'Fee' because no services were being rendered to the appellants in return of the payment thereof, and thirdly that no tax could be levied on the sale of salt because under the Constitution it was exclusively livable by the Central Government. It was urged lastly on behalf of the appellant in Civil Appeal No. K-86/72, that crushing of bones did not constitute manufacturing of any goods and as such the process was not covered by the definition of market prescribed by rule 4 of the Dharat Rules.
7. All the four contentions were repelled by a Division Bench of the High Court vide the impugned judgment. The three appellants then filed petitions of Leave to Appeal against the said judgment and leave was granted to them on 18-2-1972, to reconsider the aforementioned questions.
8. We have heard the learned counsel for the parties in each case at considerable length. They have reiterated the same contentions as raised by them before the High Court. Before reproducing these contentions it may be useful to explain the circumstances which gave rise to the levy of the fee and filing of the writ petitions.
9. The Basic Democracies Order, 1959 (hereinafter called the B. D. O.) was promulgated by the then President on 27-10-1959, and was applicable to the whole of Pakistan.
10. Article 60(1) of the Order empowered the District Council and a Union Council, with previous sanction of the Commissioner, to levy in the prescribed manner, all or any of the taxes, rates, tolls and fees mentioned in the Fifth Schedule. It is further provided by clause (2) of Article 60 that the Government may by a notification in the official Gazette, specifying separately the taxes, rates, tolls and fees mentioned in the aforesaid Schedule which may be levied, respectively, by a District Council and by a Union Council shall be competent to levy any tax, rate, toll or fee livable by a Union Council, and no Union Council shall be competent to levy any tax, rate, toll or fee livable by a District Council. Item No. 24 of the Fifth Schedule authorised the levy of 'Fees for Markets' by the District and the Union Councils. Subsequently, however, the Government notified two separate Schedules and in the Schedule relating to the Union Councils 'Fee for Markets' were mentioned at Item No. 16. In other words the power to levy fees on markets was thereby conferred exclusively on Union Councils.
11. Article 89 of the Order conferred rule-marking power on the Government and provided that the Government may make rules to carry out the purposes of the Order and in particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters enumerated in the Sixth Schedule, and all matters incidental, consequential and supplemental thereto. By virtue of Item No. 22 of the Sixth Schedule it could make rules for "regulation of the assessm ent collection, and administration of taxes, rates, tolls and fees, and all matters relating thereto".
12. Article 62 laid down that the Government may frame model tax schedules and where such schedules have been framed, the District and Union Councils were to be guided by them in levying taxes and fees etc. Accordingly a Model Lax Schedule for dharat (fees for markets) was prepared, which provided, inter alia, for the declaration of any premises or area to be a market within the meaning of rule 4 of the Rules to be framed for levy of dharat.
13. Based on the Model Schedule the Government, by Notification No. S. SOL-BD. 1-8/61, dated 13-2- 1962, framed the West Pakistan Union Council Dharat (Market Fees) Rules, 1961 (hereinafter referred to as Dharat Rules), which were enforced with immediate effect. It consisted of eight rules. Those relevant for the purpose of this case are rules 3 and 4, which are reproduced below for facility of reference :- "3. Definitions.-In these rules, unless the context otherwise requires, the following expressions, shall have the meaning hereby respectively assigned to them, that is to say :-
(a) "dharat" means fee levied under these Rules with regard to any transaction in a market ; and
(b) "market" means any premises or area declared to be a market under rule 4.
4. Declaration of market.-A Union Council may, with the previous sanction of the Controlling Authority, declare any premises or area within the Union Council used for the manufacture of goods for sale or for the sale of goods to be a market with effect from such date as may be specified. The declaration shall be notified in the official Gazette and shall also be published in the Union Council in such other manner as may be determined by the Union Council."
14. In pursuance of the powers delegated to him by the Commissioner the Deputy Commissioner, Thatta, issued a notification on 7-10-1963 in terms of the Model Tax Schedule declaring certain areas and factories to be markets, including Gharo and Dhabeji, where works of the appellants were located as also the Salt Works of the appellants situated therein, to be `Markets' within the meaning of rule 4, and sanctioned the proposal for imposition of market fees thereon. The notification reads as follows :- OFFICE OF THE DEPUTY COMMISSIONER, THATTA The 7th October, 1963.
NOTIFICATION No. BD/LB/2143.-In exercise of the powers conferred by Article 60(1) of the Basic Democracies Order, 1959 read with Commissioner of Hyder--abad Division's Notification No. 2450-D/60 dated 14-4-1961 delegating the powers to the Deputy Commissioner of his Division for sanctioning the proposals of Taxes of the Union Councils in their respective Districts, I Shah Jahan S. Karim, C. S. P., Deputy Commissioner, Thatta, hereby sanction the imposition of the following Schedule of Taxes, levied by the Union Council, Gharo, Taluka Mirpur Sakro of District Thatta within its jurisdiction.
This Schedule of Tax shall come into force with immediate effect.
SCHEDULE OF TAX (Dharat Fees for Markets)
Short title and commencement.-This Schedule may be called the Gharo Union Council Dharat (Fees for Market) Schedule.
It shall come into force with immediate effect.
Markets.-The following premises and area in the Union Council shall be markets within 'the meaning of rule 4 of the West Pakistan Union Council Dharat (Fees for Markets) Rules, 1961 with immediate effect :
(1) Gharo, (2) Dhabeji, (3) Dehra, (4) Thahim, (5) Gujo, (6) Filter Plant (7) Hirjina Salt Works, (8)
Dhabeji Salt Works, (9) Qareshi Salt Works (10) Muhammadi Salt Works:
(1) Dharat (fees for markets) in respect of goods sold in a market by retail, dharat shall be levied at the rate of one paisa per rupee of the sale price and shall be payable by seller.
(2) In respect of goods sold in markets wholesale by auction or other--wise, dharat shall be levied at the rate of the two paisas per rupee of the sale price, one-half of Dharat being payable by the seller and the other half by the buyer. The share payable by the buyer, shall be collected by the seller and the total amount payable both by the buyer and the seller shall be paid by the seller to the Union Council.
(Sd.) for (Shah Jahan S. Karim)
C. S. P.
It is in pursuance of this notification that the demand for payment of the fees was made upon the appellants-Companies, which led to the filing of the writ petition which was subsequently dismissed by a Division Bench of the Sind High Court, vide the impugned judgment.
15. Before us the learned counsel for the appellants reiterated the same contentions as had been raised on their behalf before the High Court, which are as follows:-
(i) That rule 4 of the Union Council Dharat (Fees for Markets) Rules, 1961, was ultra vires, inasmuch as while defining the word "market" it went beyond the scope of Basic Democracies Order, under which the Rules were framed and gave it an artificial and extended meaning, far beyond the meaning intended to be given to it by the parent Statute i.e. The Basic Democracies Order. The learned counsel pointed out that the word `market' which occurs in Item No. 24 of the Fifth Schedule to Article 60 of the Basic Democracies Order has not been defined by the said Order itself and therefore that word (i.e. Market) must be understood and interpreted according to its ordinary dictionary meaning, that is to say, 'a public place where goods are bought and sold', and therefore, the premises or areas which were used simply for carrying out the process of manufactur--ing do not come within its definition, and consequently a different or extended or artificial meaning could not have been given to the word 'market' by rule 4. He argued that as such the premises or areas in question cannot be termed as markets notwithstanding the fact goods are manufactured there for sale, so long as no sale takes place within the premises or areas in question or within the jurisdiction of the Union Council concerned;
(ii) That the fee levied by the concerned Union Council was in fact a 'tax', as no service was being rendered against the said levy. The learned counsel pointed out that a clear distinction existed between taxes and fees. He submitted that where taxes are a part of common burden, fees carry with them a concept of quid pro quo, and- cannot be levied without the corresponding benefit of any service rendered by the levying authority. It was contended in this connection that in its initial correspondence with the appellants as well as in the first affidavit filed by them, the respondent had not denied the assertion that no service was being rendered in return of the levy of the lees, though it was so belied in the second affidavit filed by it ;
(iii) That under Article 131 of the Constitution of 1962 read with Item No. 43 of the Third Schedule of the 1962 Constitution, the Central Legislature had the exclusive power to levy duty on salt. Therefore, neither the Provincial Legislature nor any Local Council/Union Council had the power to levy fee or tax on salt and that the levy in the present case was, therefore, without jurisdiction ; and
(iv) That it was on behalf of the appellant in C. A. No. K-86/72, that mere crushing of bones did not constitute a process of manu--facturing of any goods and, therefore, this process was not covered by the definition of the word `market' as prescribed in rule 4 of the Order.
16. We now proceed to consider each of these contentions. In support of the first contention, namely, that the definition of the word `market' in rule 4 of the Union Council Dharat (Fees for Market) Rules, 1961, is ultra vires to the extent that it goes beyond the scope of the Basic Democracies Order, 1959, which has not defined the word `market' occurring at Item No. 24 in the Fifth Schedule to section 60 of the said Order and that wherever a word is not defined in a Statute' it must be construed in the ordinary dictionary meaning, the learned counsel for the petitioners referred to the definition of the word `market' as given in various English dictionaries, including New English Dictionary Vol. VI ; Oxford Dictionary, Stuarts Dictionary and Black's Law Dictionary,
17. It is now a well-established principle of interpretation of statute that Rules which are merely subordinate legislation, cannot override or prevail upon the provisions of the parent Statute and whenever there is an in--consistency between a Rule and the Statute, the latter must prevail. This, however, envisages that all efforts to reconcile the inconsistency must first be made and the provisions of the parent Statute prevail only if the conflict is incapable of being resolved. We also do not have any cavil with the proposition that when construing any word used in a Statute which has not been defined therein, it should be understood to have been used in its dictionary meaning or even its ordinary or popularly understood meaning. As a matter of fact, the learned Additional Advocate-General Sind, who appeared for the respondents, also relied on the definition of word 'market' as given in Chamber's Dictionary and the Webster's Dictionary. After going through the meaning of this word as given in the above-mentioned dictionaries, we notice that the same is so wide and extensive that it can be taken to include any place or area where goods of one or more kinds are sold repeatedly, over a short or long period of time. The definition of 'Market' as given in rule 4 is, therefore, covered by the ordinary dictionary meaning of that word. The appellants, counsel also adverted our attention to the definition of the word 'market' as given in Sind Local Government Order, 1979. The Municipal Administration Order, 1960, and the City of Karachi Municipal Corporation Act. No doubt in the definition clause of the above-noted Acts, the word 'market' has been defined more or less in the generally understood meaning of the word, i.e. Places where people assemble for the sale or purchase of goods but the learned counsel has overlooked the fact that definitions in those Acts also include "any other place which may be notified as a market by the Rules framed" under these Acts. In other words, said definitions authorize the rule- making authority under those Acts to give to the word `Market' a meaning different to the one given to it by the definition clause itself.
18. It will be noticed that according to the definition of the word `Market' as given in rule 4 it includes two categories of places namely ; (i) premises used for manufacturing of goods for sale ; and (ii) premises used for sale of goods. It would, therefore, follow that according to the definition as given by rule 4, a premises where either or both the acts are performed can be treated as a market within the meaning. But the earlier part of the definition which seeks to include `premises used for manufacture for sale' is evidently beyond the ordinary dictionary meaning of the word `Market' as noticed above.
19. The sole question which is, therefore, to be determined is whether or not, sale of the goods manufactured by the appellants took place in the premises declared as markets under the rule in question. From the very beginning the appellants took the stand that all transactions of sale of their goods, i.e. Salt or crushed bones, take place in their offices at Karachi, and no sale takes place at their workshops/factories. On the other band the stand of the respondents is that not only are the goods manufactured at the premises in question `for sale', but they are also actually sold there. The learned Additional Advocate-General appearing for the respondents, supported this stand on the basis of the provisions of the Sale of Goods Act and referred to section 4 of the said Act. This section draws a distinction between `Sale and Agreement of Sale'. A bare reading of this section shows that there is a marked distinction between the two. In an 'Agreement of Sale,' the seller merely promises to transfer property in the goods at a specified time, subject to some condition to be fulfilled thereafter while Sale consists of actual transfer of the property from the seller to the buyer.
20. The determining factor is the time when the property in the goods passes from the seller to the buyer. When a contract of sale is in respect of ascertainable or specified goods, the property therein may pass, if so agreed upon between the parties, on the payment of the price or a promise to do so.
21. The case with respect to the goods which are unascertained or unidentified and have yet to be separated from the bulk is however, different and is covered by the provisions of section 20 of the Sale of Goods Act, which lays down the rules as to when or at what point of time the property in the case of unascertained goods passes on to the purchaser. It is obvious that property in such goods can be transferred only after the identity of the goods delivered under the contract has been established which is not possible unless quantity to be sold is weighed and separated from the bulk and are actually delivered or booked for delivery. We are of the view that in the case of salt or crushed bones although the agreement to sell might have taken place at the respective offices of the appellants at Karachi, yet the sale thereof takes place at the time only when the salt or the crushed or powdered bones are weighed and separated from the bulk at the factory premises and are in a condition to be loaded in the trucks or can be delivered to the purchaser. It is at that point of time that the property or ownership in the specific quantity of salt or powdered bones passes on to the purchaser; who had earlier made transaction at Karachi. We are therefore of the view that rule 4 is intra vires of the main Statute as there is no inconsistency in the word 'market' as defined in the said rule and the same word as used at Item No. 24 in the Fifth Schedule to section 60 of the Basic Democracies) Order.
22. With regard to the second objection against the validity of the rules namely that the levy of fee is in fact in the nature of a tax, because no service of any kind was being rendered by the respondents in that connec--tion. The learned counsel for the appellants, relying on Mahboob Yar Khan and another v. Municipal Committee Mian Channu and 2 others (PLD 1975 Lah. 748), submitted that the distinction between a tax and a fee is that while a tax is a compulsory exaction of money for public purposes and is a part of common burden, fee is related to some special benefit or service rendered. That is indeed so, but in the second affidavit submitted by the respondents in support of their stand taken by them before the High Court, it has been clearly stated by them that the amount raised by the fees on the markets was being spent on maintenance of roads, keeping the area clean and hygienic and such like other purposes of which the appellants also received or were entitled to receive equal benefits. The objection that this had not been pointed out by the respondents in their earlier affidavit is no ground for holding that the service in fact is not being rendered by, them. Consequently the contention raised on the basis of distinction between 'fee' and 'a tax' has no force.
23. It was submitted on behalf of the appellants in C. A. K-85/72, that by virtue of Item No. 42(b) of the Third Schedule of the Constitution of 1962, the levy of duty on salt is a Central Subject and as such a Union Council was not competent to levy the fee in question.
24. This contention too has no force because the imposition of fee in the present case is not a 'duty on salt' but is referable to the markets as defined in rule 4, i.e. Premises or areas where salt is manufactured for sale or is sold. This view is reinforced by the fact that this very fee is also livable on powdered-bones, as in the case of appellants in C. A. K-86/72, and in fact, on all other goods sold within any premises declared to be market. It is consequently evident that the levy in question is not of the nature envisaged by Item No. 42(b) of the Third Schedule of the 1962 Constitution, but is merely a fee on the market i.e. Place where the salt (or other goods) are sold and `Sale' of salt etc. Is, in fact, not the relevant --factor
25. This brings us to the last contention which was raised on behalf of the appellants in C. A. K- 86/72 namely, that crushing of bones into powder does not constitute 'manufacture of any article.
This contention is mis--concieved because a look at the meaning of the word as given in various English dictionaries would show that it merely means a process of conver--ting certain articles which are used as raw material, by means of physical labour or mechanical power, into a different shape or form which, in its altered form, can then be used directly for consumption of be used by other manufacturers as raw material for making something else. Sometimes manufacturing means making an altogether new thing by using certain other things as components, like making a watch from metal and glass; while at other times it may only- mean altering the nature of the raw- material as when making a Chapati out of flour or Khoya from milk. But some--times it may amount only to change the form or shape of the raw material which may then be used for consumption or be used as a raw material for other manufacturers, as when converting wheat grain into flour which could either be used by consumers directly or by confectioners for making products of different kinds. A similar conversion of shape is made at the factory of the appellant in C. A. No. K-86/72. By crushing the bones its shape is altered into powder which, thus, becomes a new commodity to be used for various purposes including manufacture of medicines or edible substances, e.g. Jelly.
26. As a result of the above discussion we hold that the levy of the fee in question was valid and the appellants are legally liable to pay the same. All the three appeals are consequently dismissed.