Shahid Karim, J. This constitutional petition challenges the Notification dated 22.05.2013 ("the Notification" ) on the ground that firstly it offends the provis ions of Section 5(3) of the Punjab Sales Tax on Services Act, 2012 (Act, 2012) and secondly that it has not been issued with the approval of Cabinet sitting as a whole and has been promulgated by the Governor of Punjab.
2. Section 5 of the Act, 2012 provides that: ?5. Amendment in Second Schedule .- (1) The Government may, by notification in the official Gazette, make an amendment in Second Schedule by modifying, adding or deleting any entry or entries with reference to the classification, if any, description of any service or class of services and the rate or rates of tax chargeable on any service or class of services not exceeding the maximum rate prescribed in Second Schedule.
(2) A notification issued under sub-sect ion (1) shall be effective from such date as may be specified in the notification but such date shall not be prior to the date on which the notification is published in the official Gazette.
(3) The Government shall at the time of presenting the Annual Budget Statement for the next financial year, lay before the Provincial Assembly of the Punjab all the notifications relating to the amendments in the Second Schedule during the current financial year ."
3. The precise submission with regard to first ground of attack is in relation to sub-section (3) of section 5 of the Act, 2012 which obliges the government to lay before the Provincial Assembly of Punjab all the notifications relating to amendments in the Second Schedule during the current financial year. The notification under sub-section (1) was gazetted on 22.5.2013 and was issued by the Governor . By the impugned notification, an amendment was made in the Second Schedule of the Act, 2012 which provides for taxable services under Section 3 of the Act, 2012. In terms of section 10 of the Act, 2012 there shall be charged, levied, collected and paid a tax on the value of a taxable service at the rate or rates specified in the Second Schedule. Reading these together , it follows that a tax shall be charged on the value of a taxable service at the rate specified in the Second Schedule which would also list the taxable services on whom the tax shall be levied. For all intents, therefore, Second Schedule is the provision where the rates of tax to be charged have been given as also the kind of taxable services on which that tax may be levied. In essence, the power to tax lies with the legislature and section 5 is a delegation of that power on the government to modify , add or delete any entry regarding class of services as well as the rate or rates of tax chargeable on any service or class of service not exceeding the maximum rate prescribed in Second Schedule.
This delegation is subject to an important rider which has been specified in sub-sec tion (3) and which obligates the government to lay before the Provincial Assembly the notifications relating to all such amendments in the Second Schedule during the financial year. The learned A.A.G as well as learned counsel for Punjab Revenue Authority
(PRA) admit that the notification was not laid before the Provincial Assembly . This begs the question whether the notification is null on that account?
4. Learned counsel for P.R.A has relied upon the provisions of Wealth Tax Act, 1963 (Act, 1963 ) which in his opinion are in pari materia to the provision of section 5(3) of the Act, 2012. Section 5 of Act, 1963 has a proviso which reads as follows: "Provided that the Federal Government shall place before the National Assembly all amendments made by it in the Second Schedule during a financial year .?
5. This, according to the learned counsel for P.R.A, was interpreted by the Suprem e Court of Pakistan in Syed Zia Haider Rizvi and others v . Deputy Commissioner of W ealth T ax, Lahore and others ( 2011 SCMR 420 ).
6. I do not agree with P.R.A that the provisions relied upon by the learned counsel and one found in Act, 1963 are similar and in pari materia with section 5(3) of the Act, 2012. There are material differences between the two provisions which will exercise a gravitational pull on the decision in this petition. This distinction was also alluded to by the Supreme Court in Syed Zia Haider Rizvi and the relevant extract may be set out below: "14. A bare reading of proviso to section 5 as well as clause 12(2) of the Second Schedule Wealth Tax Act, 1963, it appears that the Federal Government only requires to place before the National Assembly , all the amendments made by it in the Second Schedule durin g a financial year, not for its approval/ voting etc., but apparently only for information. The Second Schedule of the Wealth Tax Act deals with the exemption from the tax; and not for imposition of any new tax on change of rate of tax levied under the Act. Sub-section (1) of section 5 deals with the assets of a person to whom benefit of exemption subject to condition to the extent specified in the Second Schedule has been extended..."
7. Thus, first distinction is that section 5 of the Act, 1963 related to the grant of exemption and not imposition of tax and the two concepts are entirely different. One cannot be confused with the other. The grant of exemption can be delegated to the Federal Government and it does not amount to the imposition of a new tax or change of rate of tax levied under a statute. The power conferred under Section 5 of the Act, 2012 on the other hand is a unique power and delegates to the Provincial Government the power to modify, add or delete any entry as well as the rate or rates of tax chargeable on any services. Thus, section 5 of the Act, 2012 confers the power to tax which cannot be left unbridled in the hands of the government and must be subject to the overarching supervision of the Provincial Assembly of the Punjab which is primarily tasked under the Constitution to impose and levy a tax or a charge. It cannot be argued that merely because the compliance of sub-section (3) of section 5 was not made that notification issued by the government would remain to be lawful and the circumvention of the provisions of law will have no impact on the validity of such a notification. Doubtless, in the case of the petitioner, the Notification has the unpalatable effect of levying a tax while none was being charged and paid previously.
8. The second point of distinction between sub-section (3) of section 5 of the Act, 2012 and section 5 of the Act, 1963 is that the former requires the government to lay before the Provincial Assembly of the Punjab all such notifications "at the time of presenting the annual budget statement". This clearly implies that the notification is to be laid before the Provincial Assembly of the Punjab while it is considering the annual budget statement for its approval and enactment into a finance bill. This will give an opportunity to the Provincial Assembly of the Punjab to not only consider the notifications but also to either approve them in the forthcoming Finance Act or to reject them outrightly on any ground considered appropriate by the Provincial Assembly . Clearly , the provisions of sub-section
(3) of section 5 are not without a purpose and it would be otiose to submit that the provision is not mandatory to be followed and so nothing turns on the failure to present the notification before the Provincial Assembly . Sub-section
(3) of section 5 of the Act, 2012 has to be read in its entirety and the intention that can be gathered upon a reading of the provision is unarguable that the government is under a bounden duty to lay the notification before the Provincial Assembly at the time of presenting the annual budget statement for the next financial year. It does not matter if the consequences have not been spelt out in the said provision yet the consequences are clear and without any shadow of doubt.
9. Section 3(5) of the Act, 2012 embodies the constitutional scheme prescribed in respect of financial measures.
Article 115 of the Constitution enumerates the meaning of a Money Bill and which shall not be introduced in the Provincial Assembly except by or with the consent of the Provincial Government. For the present, a Bill shall be deemed to be a Money Bill if it contains provisions dealing with the imposition, abolition, remission and alteration or regulation of any tax. This provision has to be read conjointly with Article 77 which provides that: "77. Tax to be levied by law only. No tax shall be levied for the purposes of the Federation except by or under the authority of Act of Majlis-e-Shoora (Parliament)."
10. This applies to a Provincial Assembly by Article 127. The constitutional mandate is clear and without equivocation. The levy of a tax has to be under the authority of Act of Provincial Assembly . There is no concept of delegation in such matters although once a tax has been imposed, delegation may be made in matters relating to rate-making, exemptions, alteration etc. but that, too, under the conditions clearly delineated and circumscribed.
Section 10 imposes a tax on the value of taxable services mentioned in second schedule. The nature of taxable services has been listed in the second schedule as per section 3 of the Act, 2012 . But section 3 also states that exclusions will not be deemed taxable services liable to tax under Section 10. The petitioner's case was covered by one of the exclusions and was originally not a taxable service to be subject to tax. Thus the Provincial Assembly did not deem it expedient to levy tax on the petitioner in the first place. If such a tax is sought to be imposed now under the purported authority of section 5 of the Act, 2012, then the Govt. of the Punjab cannot be permitted to argue that that provision be applied selectively . The power exercised by the Govt. of the Punjab is tantamount to amending section 3 in actuality by seeking to include an exclusion as a taxable service. This could only be done by a Money Bill and by an Act of Provincial Assembly . That is precisely the reason why the government has been obligated to lay before the Provincial Assembly all such notifications at the time of presenting the Annual Budget Statement.
Article 120 of the Constitution gives an inkling into the term Annual Budget Statement and proves: "120. Annual Budget Statement. (1) The Provincial Government shall, in respect of every financial year, cause to be laid before the Provincial Assembly statement of the estimated receipts and expenditure of the Provincial Government for that year, in this Chapter referred to as the Annual Budget Statement.
(2) The Annual Budget Statement shall show separately--
(a) the sums required to meet expenditure described by the constitution as expenditure charged upon the Provincial Consolidated Fund; and
(b) the sums required to meet other expenditure proposed to be made from the Provincial Consolidated Fund; and shall distinguish expenditure on revenue account from other expenditure."
11. All notifications issued under Secti on 5 will necessarily impact the estimated receipts of the Provincial Government and will help the Provincial Assembly make an informal decision regarding demands for grants and either refuse or assent to such demands, under Article 122 of the Constitution.
12. Section 5(3) of the Act, 2012 is not an ornamental provision to be disregarded at the whims of the Provincial Government. It is couched in mandatory terms and the argument that the law specifies no consequences for non compliance has no currency . If the legislature imposes a condition for exercise of a delegated power , that power cannot be used unless the condition is fulfilled. More so, if the power entails levy of a tax on a person which cannot be left unbridled and so must remain subject to the overarching regulatory authority of the Provincial Assembly . A holistic reading of section 5 enjoins enforcement of the rule given in sub-section (3) of that provision. A failure to comply with the statutory requirement delineated in subsection (3) of section 5 renders the notification null and of no ef fect.
13. Since the notification was not laid before the Provincial Assembly , it is ultra vires and must be struck down. It is however made clear that since the challenge in this petition is merely to clause 2 (a)(iii) of the notification which amends clause (c) and entry relating thereto in Sr.No.6 of the Second Schedule (in column No.2) this decision will only be confined to the extent of the amendment brought under challenge in this petition and not to the rest of the notification.
14. The second ground of challenge is based on the provision of the Constitution which relate to the term Provincial Government? and the true connotation that that term carries. According to the learned counsel if the power has been conferred on the Provincial Government, then it has to be in cons onance with the definition of the Provincial Government given in Article 129 of the Constitution which provides that: ?The Provincial Government: Subject to the Constitution, the executive authority of the Province shall be exercised in the name of the Governor by the Provincial Government, consisting of the Chief Minister and Provincial Ministers, which shall act through the Chief Minister.?
15. Thus, the term Provincial Government would connote the Chief Minister and Provincial Ministers taken together which means that the decision by the Provincial Government has to be taken by the Cabinet as a whole as delineated in Article 130 of the Constitution. Since there is no material on record to rebut the proposition that the Cabinet did not approve the terms of the notification which are under challenge in this petition the necessary inference would be that this offends the constitutional mandate of Article 129 which obliges the decision to be taken by the entire Cabinet if the law provides that a decision is to be taken by the Provincial Government. Under similar circumstances, the Supreme Court of Pakistan while interpreting the provisions of the Constitution in relation to the Federal Government and in particular Article 91 has held that the rules of business are binding on the government and failure to follow them would lead to an order lacking any legal validity; that the Federal Government is the collective entity described as the Cabinet constituting the Prime Minister and the Federal Ministers; lastly that neither a Secretary, nor a Minister and not the Prime Minister are the Federal Government and the exercise, or purported exercise, of a statutory power exercisable by the Federal Government by any of them, especially, in relation to fiscal matters, is constitutionally invalid and a nullity in the eyes of the law (Messrs Mustafa Impex Karachi and other v . the Govt. of Pakistan 2016 PTD 2269 ).
16. The holding of the Supreme Court in Mustafa Impex applies on all fours to the present challenge as well for, the provisions of the Constitution in relation to the Provincial Government are similar and there is no doubt that the interpretation put by the Supreme Court on Article 91 would equally apply to Article 129 of the Constitution. It is, therefore, held while relaying upon Mustafa Impex that the exercise of powers by the Provincial Government under a statute has to be done collectively by the Chief Minister and the Provincial Ministers and its exercise by an executive officer of the Province or even by the Chief Minister acting alone would be ultra vires and a nullity . The notification to the extent of the challenge brought in this petition is therefore ultra vires the powers of the Provincial Government and is liable to be struck down on this ground too.
17. This petition is allowed in the above terms.