This writ petition and the connected writ petitions (mentioned in Schedule A hereto) have been filed by the Banks and other companies for brining under challenge the advertisement tax/fee levied by Parks and Horticulture Authority (the Authority ), the Cantonment Board, Chaklala and the Local Government.
2. The issue relates to the boards installed by the Banks on their premises/branches displaying their names in relation to which notices have been served on them by the respondent authorities for payment of advertisement tax/fee. A number of writ petitions were earlier filed which were decided through judgment dated 20.04.2015 rendered in writ petition No. 2166 of 2011. Habib Bank Limited filed Civil Appeal No. 796 of 2015 whereas other Banks filed intra Court appeals against the said judgment. .Civil Appeal No. 796 of 2015 was disposed of on 07.10.2015 by the Hon'ble Supreme Court by remitting the same to this Court for treating it as an intra Court appeal. All the intra Court appeals were decided by a learned Division Bench of this Court by relying upon the following observation made in order dated 07.10.2015 passed in Civil Appeal No. 796 of 2015: Learned counsel when confronted with the leave granting order , on instructions states that the respondents would not charge any advertisement charges on the board which is affixed upon the branch for the purposes of identifying the location of the branch, however , if any publicity of its product is made by the appellant in the cantonment area the advertisement charges can be validly applied.
3. According to the learned counsels for the petitioners, the matter has not come to an end despite the conceding statement made before the Hon'ble Supreme Court as noted above. It is stated that the respondent authorities are continuously sending notices to the petitio ners seeking payment of advertisement tax/fee. Learned counsels submit that the display of name of the Banks on their premises is a statutory requirem ent which does not amount .to publicity or advertisement. The demand of the respondent authorities for advertise ment charges, it is claimed, has no statutory underpinning. The learned counsels also pressed into service the principle of quid pro quo to submit that the respondent authorities do not provide any service to the petitioners and thus cannot charge advertisement fee.
4. Learned counsel for the Authority , while referring to Sections 2(o), 12(8) and 21(4) of the Parks and Horticulture Authority Act, 2012 (the PHA Act), contended that PHA has the necessary authority to charge fee from the petitioners. It is, however , submitted that Government of Punjab has issued Notification dated 25.06.2018 whereby amendment was made in Regulation 7 of PHA Rawalpindi Outdoor Advertisement Regulations, 2017 to the effect that Banks are exempt from the payment of shop sign charges for boards measuring 8 Square feet. It is accordingly stated that advertisement fee would only be levied on any signboards installed by the Banks which exceed the permissible measurement prescribed by the Regulations.
5. Learned counsels for the Cantonment Board placed reliance on Section 282(23) of the Cantonments Act, 1924 (the Cantonments Act) and Notification dated 05.07.2018 issued by the Ministry of Defence whereby Bye-laws were framed for regulating the pasting of bills and advertisements in W ah Cantonment.
6. Learned counsels for the respondent authorities submitted that the Bank's display not only their names on boards but have also installed boards regarding their products and services which amounts to advertisement on which levy of advertisement tax/fee is lawful.
7. Arguments heard and record perused.
8. Section 22(a) of the Companies Act, 2017 reads as follows:
22. Publication of name by a company .--Every company shall:
(a) display in a conspicuous position, in letters easily legible in English or Urdu characters its name and incorporation number outside the registered of fice and every of fice or the place in which its business is carried on: Similarly , the State Bank of Pakistan through BPRD Circle No. 207 dated 12.10.2007 issued the Branch Licensing Policy , paragraph No. 51 whereof reads as under:
51. Every licensed place of business of banks/DFIs shall carry a name which should be prominently display outside the place of business.
Paragraph 8.3 of the said Policy mandates as under: Display of Name : Every place of business of licensed institutions shall carry a name which should be prominently displayed outside the place of business with the name of licensed institutions on Signboar/S ignage. Further , Signboard of conventional banking branches having Islamic banking windows shall contain words "Islamic Banking Windows" with logo covering a minimum 1/4th portion of the board. The branch shall also display a prominent notice on entrance stating "Islamic banking services also available" to clearly indicate the nature of branch to customers.
It is settled law that circulars of State Bank of Pakistan have the status of law (see Government of Pakistan and others v. Messrs Hashwani Hotel Limited PLD 1990 SC 68). The Banks are thus bound to comply with the above provisions.
9. The afore-mentioned provisions demonstrate in no uncertain terms the obligation of the Banks to prominently display their name in a conspicuous place of business, their head offices, branches etc. It is also apparent that the Cantonment Board recognized this right of the Banks before the Hon'ble Supreme Court in Civil Appeal No. 796 of 2015. It is thus clear that in so far as the display of name of the Banks outside the business premises is concerned, there is not much dispute between the parties that the Banks can do so without payment of advertisement tax/fee.
10. The next question requiring determination is whether the tax/fee levied by the respondent authorities has any statutory backing.
Cantonment Board
11. There does not appear to be any sanction in the Cantonments Act, 1924 (the Cantonment Act) or the Rules framed thereunder permitting the charging of advertisement tax/fee from the Banks. A number of judgments have already dealt with this issue. A learned Division bench of the Sindh High Court in the case of Continental Biscuits Limited v. Federation of Pakistan through Secretary Defence, Ministry of Defence etc. 2017 PTD 1803 adjudicated upon the issue of levy of advertisement fee by the Cantonment Board, Hyderabad. It is significant to note that it was conceded before the Court by the Cantonment Board that the levy was in the nature of fee and not tax. The learned Division bench after examination of Sections 60 to 63 of the Cantonments Act came to the conclusion that the Board retained the power of general taxation subject to certain pre-conditions contained therein but had no power reserved under the Act for levy of advertisement fee. It was accordingly held that in the absence of any power to levy fee under the Cantonment Act, it could not frame any bye-law to impose the same. It was further held by the learned Division Bench that the Board was also not providing any service to the petitioner and thus could not claim fee in lieu thereof. The Court also found from the reading of Section 286B of the Cantonment Act that the Board had no power to delegate its powers to a private contractor . The Cantonment Board specifically pressed into service Section 282 (23) of the Cantonments Act which was dealt with in the judgment by holding as follows: Moreover , Section 282(23) of the Cantonments Act, 1924 only empowers the Board to frame by-laws to regulate the items mentioned in the relevant statutory provision/enabling enactment and does not empower them to levy a fee.
The afore-mentioned observations reflect the correct position of law. It is settled law that fiscal statutes prescribing levy of fee, tax, cess etc are to be strictly construed and that imposition of any such charge by a Government Agency is impermissible without specific legislative authority .
Similarly , in the case of Exide Pakistan Limited v. Cantonment Board Clifton and others 2012 CLC 1124, another learned Division bench of the Sindh High Court ruled against the levy of "Shop Board Fee" with reference to Section 200 of the Cantonments Act which provision only authorized the Board to levy "Stallages, rents and fees" subject to the qualifications contai ned therein including the prior approval and sanction of the competent authority .
The Hon'ble Supreme Court in the case of Hyderabad Cantonment Board v. Raj Kumar and others 2015 SCMR 1385 was looking at the levy of Parking fee by the Board. It was held with reference to Section 200 of the Cantonment Act that Board had no authority to levy any fee which is not contemplated by the said provision.
A learned Bench of this Court in the case of Messrs Coca-Cola Beverages v. Cantonment Board Chaklala, Rawalpindi etc. 2011 MLD 1987 was once again dealing with the issue of levy of fee/charges on the signboards installed on the front of Shops/of fices for advertisement of commercial activities. It was held in the judgment that such demand for such a levy could not be made when the Board did not provide any corresponding service to the petitioner .
12. The ratio of the afore-mentioned judgments clearly bring out the fact the Cantonment Board has no authority to levy fee in relation to the boards installed by the petitioners at their of fices/branches.
Parks and Horticulture Authority
13. Learned counsel submitted that the case of the Authority is distinguishable from the other authorities in as much as there are direct provisions contained in the PHA Act allowing the Authority to charge advertisement fee.
14. Section 2(o) of the Act reads as under: "Outdoor advertisement" means a streamer , board, poster , banner , or any other thing placed, painted, pasted or installed on a public or private building or property so that it is visible from a publi c place and which is intended to inform the reader of availability of a service, product or outlet or otherwise promote a person or a message Similarly , Section 12 of the Act in so far as it is relevant is reproduced hereunder:
12. Installation of billboards, sky signs and outdoor advertisements.-- (1) If any person intends to install a billboard, sky sign or outdoor advertisement in any manner on private or public property or public park, green belt or green area, he shall make an application in the prescribed manner to the Authority .
(2).......................................................................................................
(3) The Authority shall not grant permission if the installation of the billboard, sky sign or outdoor advertisement affects the rights of road users to safe and secure usage or view of the residents or provision of light and air, or the view or sanctity of a historical monument.
(4) The permission for installation of billboard, sky sign or outdoor advertisement shall include such safety measures as may be determined by the Authority or as may be prescribed, and shall not, in any case, exceed such period as the Authority may determine or as may be prescribed.
(5)...............................................................................................................
(6)...............................................................................................................
(7)...............................................................................................................
(8) The Authority may charge such fees for the grant of permission for installation of a billboard, sky sign or outdoor advertisement as the Authority may approve.
(9)...........................................................................................................
15. According to the Authority , the definition of "outdoor advertisement " in the Act takes into account the kind of publicity that the Banks indulge in by displaying information about the availability of ATM machines and other services. The Banks, on the other hand, object to the construction placed on the definition of outdoor advertisement by PHA. It is stated that the expression "private building or property " contained in Section 2(o) of the Act refers to private properties of third parties and is not intended for the personal properties of the Banks.
16. Section 12(8) of the PHA Act is the charging provision. A bare reading thereof reflects that it authorizes the Authority to collect "fee" for the grant of permission for installation of a billboard, sky sign or outdoor advertisement.
Section 12(1) stipulates that a person intending to install an outdoor advertisement on a private or public property or public park, green belt or green area shall' make an application in the prescribed manner to the Authority . Now as far the outdoor advertisement in a "public park, green belt or green area" is concerned, the Authority can collect fee as the same are under its control by the terms of the PHA Act and thus some type of service is being provided by the Authority . The same cannot, however , be said for private buildings over which the Authority has no control and any installation of outdoor advertisement therein or thereon would not involve the element of providing service of any kind on its part. It is settled law that an authority can only charge and levy fee as compensation for corresponding service performed or rendered. If the object and purpose of the fee is simply to generate revenue for the authority and the amount of fee has no relation to the service or value thereof, it will amount to a tax. A statute which imposes a tax has to necessarily provide the event of taxation and also the rate thereof. Both of these necessary constituents are missing from the PHA Act. In the case of Federation of Pakistan through Secretary M/o Petroleum and Natural Resources and another v. Durrani Ceramics etc. 2014 SCMR 1630 , the Hon'ble Supreme Court dif ferentiated between tax and fee by making the following observations: Whereas 'tax' is a common burden for raising revenue and upon collection becomes part of public revenue of the State, `fee' is exacted for a specific purpo se and for rendering service or providing privilege to particular individuals or a class or a community or a specific area. However , the benefit so accrued may not be measureable in exactitude. So long as the levy is to the advantage of the payers, consequential benefit to the community at large would not render the levy a 'tax'.
Similarly , this Court in the case of East Pakistan Chrome Tannery (Pvt.) Limited v. Federation of Pakistan etc 2011 PTD 2643 while taking into account a plethora of judgments concluded that fee is collected for a specific beneficial purpose for the advantage of a particular class or sector or group of individuals who have paid or contributed towards the Fee. In determini ng whether a particular levy is fee the essential purpose of levy must be kept in mind which ought to be to render specific services to a specified area. It was held that there must be a relationship between the levy of fee and services rendered.
17. In view of the settled position of law, the Authority which does not provide any service to the Banks/petitioners cannot levy, charge and recover fee from them in respect of the outdoor advertisement that is installed and affixed on the premises of their branches or other offices. This aspect of the matter would also be applicable to the cases pertaining to the Cantonment Board.
Local Government :
18. Learned counsel representing the Local Government referred to Section 156 (1) of the Punjab Local Government Act, 2019, which reads as under:
156. Authority of a local government to levy taxes etc.- (1) A local government may, through a notification published in the official gazette, levy all or any of the taxes, fees, rates, tolls, rent and other charges given in the Tenth Schedule.
He submitted that clause (m) of the Tenth Schedule specifically caters for Tax on advertisement and billboards.
19. It is evident from the text of Section 156(1) of the Punjab Local Government Act, 2019 that the local government can only levy tax through a notification published in the Official Gazette. The learned counsel representing the local government, however , was not in a position to state with absolute certainty that any Notification for levy of tax on advertisement and billboards was issued and published in that Official Gazette. In the absence of such a Notification, the Local Government cannot levy and charge tax on advertisement from the Banks/petitioners. Even otherwise, the signboards required to be installed by the Banks under the terms of Companies Act, 2017 and the Policy of State Bank of Pakistan are exempt from advertisement tax. The Punjab Local Government Act, 2017 being a provincial law must yield to and cannot override the provisions of a federal statute.
20. In the result, this writ petition and the connected writ petitions are allowed and it is declared that:
(a) The Banks are entitled to install any signboard/signage outside their premises in terms of Companies Act, 2017 and the Branch Licensing Policy issued by State Bank of Pakistan through BPRD Circle No. 207 dated 12.10.2007 without being liable to pay any advertisement fee to the respondent authorities;
(b) the Cantonment Board has no authority under the Cantonments Act, 1925 to charge and levy tax or fee in relation to advertisement from the petitioners;
(c) the Parks and Horticulture Authority his no authority to charge and levy advertisement fee from the petitioners on account of outdoor advertisement; and
(d) In the absence of any Notification under Section 156(1) of the Punjab Local Government Act, 2019, the Local Government has no authority to charge and levy Tax on advertisement and billboards; All the notices issued by the respondent authorities which are impugned in this writ petition and connected writ petitions are set aside being without lawful authority and of no legal ef fect.