Through this writ petition the following prayer has been made:-- "It is, therefore, respectfully prayed that demand of property tax being raised by the respondents against the petitioner, the notices/challan issued by Respondent No. 4 for payment of property tax in question as well as the coercive measures taken by respondents against the petitioner for arrest/attachment of property may kindly be declared to be illegal, against law, ultra vires, arbitrary, without jurisdiction, unwarranted and hence without lawful authority.
' It is further prayed that respondents may kindly be restrained from demanding the alleged property tax from the petitioner or taking any steps for forcible recovery of same till the decision of writ petition."
2. Learned counsel for the petitioner states that the matter in issue in this writ petition has been decided vide judgment of august Supreme Court of Pakistan reported as "2011 SCM R 1856 (Province of Punjab through District Coordination Officer, Okara and others Vs. Market Committee, Okara through ChairmanISecretwy)", therefore, this writ petition be accepted in the light of judgment referred supra.
3. On the other hand, learned Assistant Advocate General states that in the comments filed by the respondents the main contention of the respondents is that the petitioner is not exempted from the property tax but states that when the matter has been resolved by the august Supreme Court in the judgment referred supra he is unable to defend this writ petition.
4. I have heard the learned counsel for the petitioner, learned A.A.G. And also gone through the case law referred to by the learned counsel for the petitioner.
5. The main question involved in this petition is that whether under Section 4(b)(ii) of the West Pakistan Urban Immovable Property Tax Act (V of 1958) and in accordance with Section 3(28) of General Clauses Act (X of 1897), the Market Committee is a local authority. As the facts of the case are absolutely the same, when civil appeals filed by the Province of Punjab against Market Committee Okara were decided, when Lahore High Court decided the matter in favour of Market Committee, therefore, it will be appropriate that for taking light from the said judgment Paragraphs No. 3 to 6 of the judgment of august Supreme Court referred supra be reproduced, which are as under:--
3. Heard. There is no discord between the parties that as per Section 4(b)(ii) of the Act, 1958, the properties owned or administered by a 'local authority' when used exclusively for public purpose and not used for the purpose of profit by a 'lo'cal authority' are exempted from the property tax. It is also an undisputed fact that the property/ies qua which tax was demanded is/are being used by the respondent for the public purpose, rather for the purpose of profit; thus, the controversy between the parties is confined and focused to the proposition if the respondent is a 'local authority' within the meaning of Section 4(b)(ii). For the resolution of the above, it may be mentioned that neither Act, 1958 nor the Ordinance, 1978 has provided a definition of the 'local authority. It is settled law that in such an eventuality the word/expression used in a statute must be construed in terms of the General Clauses Act, 1897; accordingly resorting to the Act, 1897, 'local authority' has been defined in Section 3(28) as under:-- "Local authority".--"local authority" 'shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to or entrusted by the Government with, the control or management of a municipal or local fund." (emphasis supplied).
' This definition came up for interpretation in quite a number of cases and while considering, if National Bank of Pakistan constituted under the Ordinance, 1949 is a 'local authority' in terms of the above, the Supreme Court of Pakistan in the judgment reported as The Deputy Managing Director, National Bank of Pakistan, Principal Office, Jinnah Avenue Dacca v. Maul Huq (PLD 1965 SC 201) held as under:-- "The expression "local authority" has been used in statutory phraseology, in the Indian sub- continent for a great many years, and is always understood to mean an authority which is entrusted with the administration of a local fund. Local authorities are bodies exercising within limited territories included in a province, powers which belong to the Province, but which by statute are delegated to the local authority. A local authority is ordinarily charged with functions of self- Government, and has power of making bye-laws, of imposing taxation, and of maintaining and administering a local fund".
' In the judgment reported as Karachi Development Authority v. Province of Sindh through the Secretary, Excise and Taxation Department, Karachi and 4 others (PLD 1977 Karachi 152), a Division Bench of the Sindh High Court while examining the Karachi Development Authority Order, 1957, concluded that the said law postulates that the K.D.A. Is empowered by law to exercise certain Municipal functions; it has been entrusted with certain powers and functions of the Province in relation to Local Self-Government; it has the power to impose fees/tax and administrator, control and manage its fund thus, it was a 'local authority'.
' In Commissioner of Income Tax, Lahore v. Chief Secretary, Government of the Punjab, Lahore (1981 PTD 66), this Court while examining an income tax exemption for Thal Development Authority considering the object, purpose and constitution of the said authority and while repelling the submission of the revenue that it was not a local authority to which the tax exemption was available came to the conclusion that:- "We are unable to accept this submission, because as we observed the powers conferred on the said Authority were at least as wide as those conferred on any local authority and include the power to levy taxes. Therefore, as the said Authority was a local authority and was not liable for income tax."
' In Chief Secretary, Government of the Punjab, Lahore v. Commissioner of Income Tax, Lahore Zone, Lahore (1976 PTD 56) a case, which again pertains to the status of That Development Authority, a Division Bench of the Lahore High Court while examining the term "local fund" appearing in Section 3(28) ibid in reference to the 'local authority and by taking into account the definition (of local fund) given in the compilation of Treasury Rules (Volume-I) and also provided by Law Lexicon by Aiyer, "The brief review of some of the relevant provisions of Thal Development Act discussed above is sufficient to form a fair idea as to the constitution and features of the Thal Development Authority, its powers and duties and the functions entrusted to it under the law. It is a statutory corporation constituted under Section 3 of the Thal Development Act. It is a body corporate, has perpetual succession and can sue and be sued. It has its own juristic personality distinct from its members.
Within its own local area, it exercises considerable powers of local Self-Government. It may frame schemes for the development of a local area under its control and provide of civic amenities for the inhabitants of the area. It has its own local fund to manage. It prepares its own annual budget for submission to the Provincial Government. It may levy taxes in its own local area with the sanction of Provincial Government. It may also make bye-laws. We have, therefore, no hesitation in holding that the Thal Development Authority is a local ' Authority as defined in Section 3(28) of the General Clauses Act."
' The question if Delhi Development Authority is a 'local authority' and, therefore, the provisions of payment of Bonus Act are not attracted, the issue was resolved by the Indian Supreme Court by reference to the said provision of the Act, 1897 in the case reported as Union of India and others v.
R.C. Jain and others (AIR 1981 SC 951) whereby it was held:-- "It cannot be said that the fund of the Authority, required to be maintained by Section 23 of the Delhi Development Act, is not a local fund as no part of it flowed directly from any taxing power vested in the Delhi Development authority. When it is said that one of the attributes of a local authority is the power to raise funds by the method of taxation, taxation is to be understood not in any fine and narrow sense as to include only those compulsory exactions of money imposed for public purpose and requiring no consideration to sustain it, but in a broad generic sense as to also include fees levied essentially for services rendered. It i's now well recognized that therc is no generic difference between a tax and a fee:" (emphasis supplied).
' Furthermore:-- "An authority, in order to be a local authority, must be of like nature and character as a Municipal Committee, District Board or Body of Port Commissioners, possessing, therefore, many, if not all, of the distinctive attributes and charicteristics of a Municipal Committee District Board, or Body of Port Commissioners, but possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund (emphasis supplied). The authorities must have separate legal existence as Corporate bodies.
They must not be mere governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the areas. Next, they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy effecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. Next, they must be entrusted by Statute with such governmental functions and duties as are usually entrusted to municipal bodies. Broadly, they may be entrusted with the performance of civic duties and functions which would otherwise be Government duties and functions. Finally, they must have the power to raise funds for the furtherance of their activities and the fulfillment of their projects by levying taxes, rates, charges, or fees. This may be in addition to moneys provided by Government or obtained by borrowing or otherwise. What is essential is that control or management of the fund must vest in the authority.
(emphasis supplied).
4. From the resume of the criteria set out in the afore-stated dicta, it is clear that in order to qualify as a 'local authority', a body/institution should have a juristic personality distinct from its members; it should have a perpetual success and a common seal and may sue and be sued in its corporate name; it should exercise its authority and perform its functions within a defined territory; such body should be charged with the functions of self government and has the power to make its bye-laws; it should have the empowerment to impose fees and taxes and to raise, maintain and administer a fund of its own. When the above characteristics are predominantly and substantially possessed by a body/institution it shall undoubtedly to be a 'local authority' in terms of law.
5. In the instant case, the preamble of the Ordinance, 1978 provides the object for the creation of the market committees, which are for the betterment of purchase and sale of the agriculture produce and for the purpose to establish markets and make rules for their proper administration; Section 9 in consonance with the preamble describes the functions and duties of a market committee which (functions etc.) are localized. Sections 12 and 12-A when read together envisage the concept of self governance of the market committee, when it provides for the election of- Chairman and Vice chairman and also the procedure for no-confidence against them. Section 14 contemplates the market committee to be body corporate with all the attributes of a juristic personality having a perpetual and common seal, which can sue and be sued. Importantly, Section 19 empowering the market committee' to levy, charge and impose fee, which (the fee) can be construed to be an interchangeable for the tax. Sections 20 and 21 provides for the establishment of the fund of the 'market committee' and the purpose for which the fund may be expended, clearly prescribing that all the moneys received by the market committee shall form part of the fund which shall be called "the market committee fund" and after defraying the' expenditure if any, the fund, if found surplus, it shall be invested by the market committee as may be prescribed; this undoubtedly postulates the authority of the market committee for the generating, entrustment, the maintenance and administration of its own fund; Section 36 empowers the market committee to make its bye-laws. All the above powers and attributes when put together, in our candid consideration qualify the 'market committee' to be a local authority in terms of Section 3(28) of the Act, 1897 and thus entitled to the exemption from the property tax as envisaged by Section 4(b)(ii) of the Act, 1958.
6. We are not impressed with the submission of the learned A.A.-G. That as one of the purposes of expending the fund of the 'market committee' is to pay tax on property etc., therefore, it shall be liable for the tax notwithstanding being a local authority. Section 21(xvi) to which reference has been made in this behalf is only an enabling provision providing for the scope of the expenditure permissible for the market committee, but in no way it can be construed to mean that market committee shall on that account be liable to pay tax even if an exemption has been granted to it by that law under which a tax was/is to be imposed or levied."
6. In this view of the matter, this writ petition is accepted and the demand raised for payment of property tax by the respondents is declared illegal. The petitioner is exempted from the payment of property tax. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.