RAHEEL KAMRAN J .--Through this writ petition, the petitioner has prayed as under: "It is, therefore, respectfully prayed that this petition be accepted and an appropriate writ may kindly be issued:
(i) Declaring the demand notice issued by respondent No.2 bearing reference No.Ads/Dues/2014/13 dated 02.06.2014 amounting to Rs.1,612,400/- and second undated notice amounting to Rs.5,489,100/- for promotional displays amount to be without lawful authority and no legal ef fect:
(ii) Declaring the appointment of respondent No.2 through contract conveyed through letter dated 27.06.2013 and Authority letter dated 03.04.2014 unconstitutional, illegal, void-ab-initio as the same has been done without lawful authority .
(iii) Permanently prohibit/restrain the respondents from further demanding or collecting tax/charges on promotional displays from the Petitioner Company without any legal backing or claiming any fee without providing any corresponding services.
(iv) Restraining the respondents from removing/damaging any boards of promotional displays containing the name or logo of petitioner from any shop, buildi ng, land, wall, vehicle or creating any hindrance in the installation of new boards of promotional displays on shops, hostels, buildings etc. till the final disposal of the titled petition and/or harassing and threatening the employees/of ficials off the petitioner Company or affecting any recovery through coercive measures.
(v) Suspending the operation of impugned demand note/invoice No.Ads/Dues/2014/13 dated 02.06.2014 amounting to Rs.1,612,400/- and second undated notice amounting to Rs.5,489,100/- for promotional displays amount pending decision of this constitutional petition;
(vi) Granting of cost to petitioner .
Any other order that this Hon'ble Court deem fit and appropriate may also kindly be passed."
2. Brief facts of the case, as alleged in the petition, are that the petitioner is an Oil Marketing Company ("OMC") which directly and through its retailer manages and operates retail outlets for the sale of petroleum products at various locations throughout Pakistan. Respondent No.1 assigned the responsibility to collect fee/tax on display of promotional material on National Highways to respondent No.2, being its contrac tor, vide letter No.(1 14)/NHA/Dir and (MOU)/2013/240 dated 27.06.2013 and 23.05.2013 respectively , who issued notice for collection of rental charges from display of promotional material on G.T Road (Rawalpindi to Attock Section), vide notice of demand, bill/invoice/challan bearing reference No.Ads/Dues/2014/13 dated 02.06.2014 amounting to Rs.1,612,400/- and also called upon the petitioner company through un-dated letter to deposit the amount of charge for display of promotional material amounting to Rs.5,489,100/-, which have been, inter alia, assailed herein.
3. Learned counsel for the petitioner contends that respondent No.1 has no authority under the National Highway Act, 1991 (hereinafter referred to as the "Act") as well as Rules and Regulations made thereunder to impose or levy any charge on display of promotional material or to collect the same through any of its agents, especially through respondent No.2, therefore, the aforementioned acts are totally void ab-in itio, without lawful authority and of no legal effect. He adds that the petitioner is not being provided with any service s by respondents with regard to advertisement and the sign boards of the petitioner-company are installed at private premises, therefore, respondents are not entitled to the levy of any fee or charge on such display of promotional material. He finally contends that without prejudice to the foregoing, any levy of advertisement fee or charge has to be based on the principle of quid pro quo. In support of his arguments, learned counsel has placed reliance on the cases of Collector of Customs and others v. Sheikh Spinning Mills (1999 SCMR 1442 ); Pakcom Limited v.
Federation of Pakistan (PLD 2011 SC 44); Shell Pakistan Ltd. v. Capital Development Authority (PLD 2015 Islamabad 36 ) and GAM Corp. (Pvt.) Limited v . National Highway Authority ( 2021 CLC 1755 ).
4. Learned counsel for respondent No.1, on the other hand, contends that the impugned charge is essentially in the nature of tax and in the alternative, it is a fee or license fee. He has made reference to the provisions contained in clauses (vii), (viii) and (xiii) of Section 10(2) of the Act and Rule 12 of the National Highways and Strategic Roads (Control) Rules, 1908 (as Amended in 2002) promulgated by the Federal Government in exercise of powers conferred under Section 31,, of the Act to contend that the impugned charge has been levied lawfully and that the notices impugned; in the instant writ petition has been issued with lawful authority . In this regard, he has placed reliance on the judgment of this Court in the case of Jamil Ahmed and others v. Government of Pakistan (PLD 2019 Lahore 298). He additionally relies on "Chapter X" of the National Highway Authority Regulatory Framework and Standard Procedure for Preservation and Commercial Use of Right of Way (ROW), 2002 titled Display of Promotional Material framed by the Authority in purported exercise of powers under Section 32 of the Act, which lays down the detailed procedure for the Authority to give franchise rights for hoardings for specific period. He finally contends that the instant writ petition involves factual controversy , which could not be resolved in exercise jurisdiction under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 ("Constitution").
5. Heard. Record perused.
6. What is the nature of impugned levy or charge on display of promotional material (i.e. whether it is a tax, fee or license fee) is the primary question for this Court to determine.
7. A tax is compulsory exaction of money by public authorities, which form part of common burden for raising revenue and upon collection it becomes part of public revenue of the State. It is an attribute of sovereignty . A tax is a contribution to the Government, impo sed in the common interest of all is for the purpose of defraying the expenses incurred in carrying out the public functions. Reliance in this regard is placed on judgments of Hon'ble Supreme Court in the cases of Messrs Elahi Cotton Mills Ltd and others v. Federation of Pakistan and 6 others (PLD 1997 SC 582); Federation of Pakistan through Secretary Ministry of Petroleum of Natural Resources and another v. Durani Ceramics and others (2014 SCMR 1630 ) and Workers' Welfare Funds v.
East Pakistan Chrome T annery Private Ltd and others ( PLD 2017 SC 28 ).
8. Article 77 of the Constitution commands that no tax can be levied for the purpose of Federation except by or under the Authority of Act of Majlis-e-Shoora (Parliament). Article 142 governs the subject matters upon which Majlis-e-Shoora (Parliament) can legislate, which are, amongst others, specified in the Federal Legislative List.
Entries 43 to 53 in the Federal Legislat ive List relate to jurisdiction of the Majlis-e-Shoora (Parliament) to levy taxes, which does not include any entry covering tax on display of promotional material which is subject matter of the instant writ petition. It is the taxing power (and its associated entry , if any) that controls the taxing event as set out in a fiscal statute, and not vice versa. It is perhaps for this reason that there is no provision in the Act which purports to levy a tax on display of promotional material.
9. Additionally , the components which enter into the concept of a tax are well known . The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy; the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax; the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability . If these components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity . Reliance in this regard is placed on the case of Messrs Govind Saran Ganga Saran v.
Commissioner of Sales Tax and others (AIR 1985 Supreme Court 1041). In the instant case, nothing has been specified in the Act with certainty in terms of the taxable event, persons upon whom the incidence of tax falls, the rate of tax and the value to be taxed in relation to display of promotional material on or along the National Highways, Motorways or Strategic Roads. The impugned demand is, therefore, not a tax by any stretch of imagination.
10. Like tax, the levy of a fee also requires enactment by the appropriate legislature in the legislative field approved by the Constitution. In view of Entry No.54 read with Entry No.34 in the Federal Legislative List, the Federation is competent to enact and levy fees in relation to any services provided or rendered on the National Highways and Strategic Roads.
11. There are two kinds of fee imposing enactments which have been recognized in various judicial pronouncements. One is based purely on the principle of quid pro quo i.e. a charge payable for rendering specific service or extending specific privilege which the payers can avail subject to the conditions that may be attached to it, also known as fee-simplicitor'. In such an enactment, there is direct and immedi ate correlation in absolute terms between the service that is rendered and the fee that is charged for it. The other kind of fee-levying legislation is where Cess is imposed as a compulsory exaction in the same manner as taxes are imposed with the distinction that it is imposed for achieving a specific purpose promised in the enactment itself which, when realized, would bring some advantage or benefit for the payers in future. It can be described as 'purpose specific' and in many judicial pronouncements have been termed as Tess fee'. In such a form of levy, the specified purpose is pre- committed to the payers before the revenue is collected under the legislation. In such a form of levy, the rule of quid pro quo does not exist in the same sense as it exists in a case where an existing service is rendered or a privilege is extended directly to the payer for a fee. What needs to be taken into consideration is whether the enactment has promised some benefit or advantage for the payers to be made available in future by utilizing the revenue, making it more akin to a fee than a pure revenue raising measure like taxes in general are imposed with no precondition attached for their spending. When Cess as a fee is levied to meet an earmarked exigency spelt out in an enactment, it preserves the levy for such purpose only even with the change in the Government set up. It cannot be levied as a general revenue collecting tool and the Government would not be justified to collect it if the funds are diverted to some other expenditures. So, it is like a 'promised spending' to be applied to the specific purpose described in the enactment hence, in order to remain a fee-levying enactment, the purpose for which the Cess is to be charged should be well spelt out and defined in the enactments as narrowly as possible lest it may convert it into a tax-levying enactment. The proceeds of Cess should be clearly identifiable in the accounts by using separate accounting codes so that its collection and utilization is reconcilable with the purposes stated in the enactment. A co-relation between the revenue collected and the expenditures incurred for the promised specific purpose should always be maintained. Reliance in this regard is placed on judgment of the Hon'ble Supreme Court in the case of Khursheed Soap and Chemical Industries Private Ltd. v . Federation of Pakistan ( PLD 2020 SC 641 ).
12. It is manifest from perusal of the Act that neither any specific provision for the levy of fee on display of promotional material has been legislated nor such fee is levied to meet an earma rked exigency spelt out therein.
The Act, therefore, does not expressly provide for the levy on display of promotional material in either of the forms be it 'fee-simplicitor' or Tess-fee'.
13. A "license" is the permission by the competent authority to do an act which, without such permissionwould beilleg Reliance in this regard is placed on judgment of the Hon'ble Supreme Court in the case of Rehmatullah Khan and others v. Government of Pakistan and others (2003 SCMR 50). A "license fee" is the fee charged to permit or allow a person to operate under a regulatory scheme or licensing regime. It is quite distinct from the "tax", "fee simpliciter" or "Cess-fee". It is the fee for conferring a privilege or license. Reliance in this regard is placed on judgement of this Court in the case of D.S. Textile Mills Limited v. Federation of Pakistan and others (PLD 2006 Lah. 335). For the imposition of a license fee, it is imperative that there must be an enactment prohibiting the general public from the activity permitted under the license. Learned counsel for the Petitioner in this case could not refer to any provision of the Act whereunder display of promotional material on private property alongside the National Highways and Strategic Roads is prohibited or regulated. The impugned demand is, therefore, not even a license or regulatory fee.
14. It is settled law that rules and regulations, being subordinate legislation, cannot go beyond the ambit and scope of the parent statute. The mere fact that power has been conferred on the Authority to make rules and regulations does not authorize framing of delegated legislation that is inconsistent with or repugnant to the parent Act, more so in the case of levy of a charge, which falls within an essential legislative funct ion that cannot be delegated.
Reliance in this regard is placed on judgm ents of the Hon'ble Supreme Court in the cases of Jurists Foundation v. Federal Government (PLD 2020 SC 1); In the matter of Reference No.2 of 2005 by the President of Pakistan (PLD 2005 SC 873); Pakistan Tobacco Company Ltd. and others v. Government of N.W.F.P through Secretary Law and others (PLD 2002 SC 460) and Zaibtun Textile Mills Ltd. v. Central Board of Revenue and others (PLD 1983 SC 358). In the present case, the rule making power is couched in general language permitting the Federal Government to frame rules for carrying out the purposes of the Act without laying down any guidelines for the exercise of such power . No charge, much less the charge on display of promotional material can be levied by the Government or the Authority in exercise of its power to frame Rules under Section 31 or Regulations under Section 32 of the Act in the absence of a clear legislative mandate in this regard.
15. Section 10(1) of the Act authorizes the Authority to take such measures and exercise such powers as it considers necessary or expedient for carrying out the purposes of the Act. This rule making powers is couched in general language permitting the Federal Government to frame Rules to carry out purposes of the Act without laying down any guidelines for the exercise of such powers. Section 10(2) of the Act, however , enumerates some specific subjects on which Rule making powers may be exercised by the Federal Government, relevant clauses whereof upon which much reliance has been placed by learned counsel for respondent No.1 are reproduced herein below:
(2) Without prejudice to the generality of the powers conferred by subsection (1), the Authority may for the purpose of carrying out the purposes of this Act.
(i)--- (ii)---
(vii) Levy, collect or cause to be collected tolls on National Highways strategic roads and such other roads as may be entrusted to it and bridges thereon;
(viii) License facilities on roads under its control on such terms as it deems fit;
(xiii) Raise funds (local and foreign) through borrowing, floating of bonds, sharing or leasing of assets or any other means, from time to time;
16. The above provisions manifestly do not contain any specific clause empowering the Federal Government to levy any fee or charge on display of promotional material or hoardings. In the abse nce of any such provision in the Act, including Section 10 ibid, framing of Rule 12(1) ibid by the Federal Government and "Chapter X" of the National Highway Authority Regulatory Framework and Standard Operating Procedure for Preservation and Commercial use of Right of Way (ROW), 2002 by the Authority are void and ultra vires the Act to the extent of levy of charge/fee on display of promotional material or hoardings on private property . Reliance of respondent No.1 on the case of Jamil Ahmed and others v. Government of Pakistan and others (PLD 2019 Lahore 298) is inapt and misconceived for that case is distinguishable on facts. Petitioners in the said case were using approach road of Authority within right of way, therefore, they were held liable to pay Approach Rent al Charges under the provisions of National Highway and Strategic Roads (Control) Rules, 1998 and Chapter VI of the National Highway Authority Regulatory Framework and Standard Operating Procedure for Preservation and Commercial use of Right of Way (ROW), 2002.
17. Even otherwise, the impugned charge/fee has been held by this Court in the case of GAM Corp. (Pvt.) Ltd. v.
National Highways Authority (2021 CLC 1755 ) and by the Hon'ble Islamabad High Court Shell Pakistan Ltd v. Capital Development Authority (PLD 2015 Islamabad 36) to fall outside the scope of the above mentioned provisions of the Act as well as Rule 12(1) of the National Highways and Strategic Roads (Control) Rules, 1998 as amended in 2002. Learned counsel for the respondent has made no attempt to distinguish the aforementioned judgments.
18. As regards plea of learned counsel for respondent No.1 as to factual contro versy , suffice it to observe that undeniably the promotional material is being displayed by the petitioner on the property which is privately owned and does not fall within jurisdiction of the Authority . Respondents have not placed on record any document whatsoever showing the petitioner's display of promotional material on its property and provision or rendering of any service by the Authority to it in relation to which the rent/fee impugned in this writ petition is sought to be charged. A bald and unsubstantiated plea of factual controversy cannot be enter tained to throw out claim of the petitioner . There being no element of quid pro quo on part of the NHA in the instant case, the impugned demand of fee/charge is manifestly without lawful authority and of no legal effect. Reliance in this regard is placed on the judgments in the cases of Collector of Customs and others v. Sheikh Spinning Mills (1999 SCMR 1442 ); GAM Corp. (Pvt.) Limited v. National Highway Authority (2021 CLC 1755 ) and Shell Pakistan Ltd v. Capital Development Authority (PLD 2015 Islamabad 36). Having come to this conclusion, there is no need to dilate upon the question whether the Authority could delegate its powers to collect rent/fee/charge to a private contractor .
19. In view of the foregoing, this writ petition is allowed and the impugned notices are declared to be without lawful authority and of no legal effect. The petitioner may approach the Authority for refund of the amounts, if any, deposited with it towards the charge/fee on display of promotional material on private property , which refund shall be made expeditiously .