SYED ARSHAD ALI, J. This single judgment shall dispose of the instant Constitutional petition as well as the connection W.P No.3899-P/2021 as in both the petitions, the Petitioners which are private limited companies have challenged the collection of fee on their official vehicles which are used by the employees of the Petitioners' companies in furtherance of their economic activities.
2. In W.P No.3899-P/2021, the Petitioners' Company claims that it deals in providing Cable TV Services at major cities of Pakistan including Peshawar, the vehicles of the Petitioners, carrying engineers and technical teams, for the purpose of network deployment, operations and maintenance on daily basis commute through the limits of each Town Municipal Administration in Peshawar. The said vehicles are identified through stickers/branding/logo of the Petitioners Company and despite the fact that these are not involved in any activities relating to the advertisement of the Company, the Respondents through their contractor are stopping the vehicles/vans of the Petitioners and demanding the advertisement fee which is illegal.
3. Similarly, it is averred by the Petitioners' Company in the instant petition that it deals in food delivery services provided through its online platform popularly known as "Food Panda", facilitating consumers of enjoy the food of their choice from a restaurant of their liking at their doorsteps. The business activities have been explained by the Petitioners in Para-6 of the petition that the Petitioner through its online platform, book the orders of their customers, then through its riders, who are freelancers, arrange for the food to be picked up from the restaurants and thereupon delivered to the customers at their doorsteps. However, the riders who are freelancers wear a jacket and use Motorcycles that bear Petitioners' logo/trademark. The Petitioners -also claims that in a similar way, private security guard companies, such as Phoenix and SMS (among others), courier companies, such as TCS, DHL and Leopard (among others), beverage and water delivery companies, such as Coca Cola Beverages, PepsiCo and Nestle (among others) are also engaged in similar business with the same fashion that their riders are wearing jackets and using motorcycles carrying the logos of the respective Company, however, they are not subject to impost of any fee.
4. In both petitions, the Respondents-Local Government were noticed who have filed their parawise comments. It is the case of the Respondents that the Petitioners itself has categorically admitted the fact that its riders use specific logo/trademark and wear jackets of their specific colour, therefore, all these measures amount to marketing and advertisement of their business, hence are liable to pay tax/fee as per Schedule of Tax for the period. The Respondents have also placed on file a Notification No.4284-87/TMO/TMAJT-1/2019 dated 27.05.2019; according to which, the Provincial Government i.e. LG&RDD Khyber Pakhtunkhwa, has approved imposition of the taxes vide letter dated 05.07.2011 which includes the fee as item No.11 of the said Notification on Delivery Publicity i.e. Motorcycles, Auto Rickshaw, four wheel and six wheel' vehicles, therefore, the said fee is charged under the Authority of law.
5. Section 42[1] of the Khyber Pakhtunkhwa Local Government Act, 2013 ("Act") authorizes any Local Government to levy all or any of the taxes and levies specified in Third Schedule, however, the said imposition of levy is subject to previous publication of tax proposal inviting and hearing public objections and approval of the respective Local Council.
6. Third Schedule enumerates the following subjects where tax or fee can be charged.
THIRD SCHEDULE [See section 42)
Part - I TEHSIL LOCAL GOVERNMENT 1.
2.
3.
11. Fee on all types of advertisements including on bill-boards other than on radio and television.
(Explanation) Local advertisements run by local cable operators do not fall under the classification of television advertisements.
7. The learned counsel representing the TMA during the course of arguments has produced a Notification dated 27.05.2019 whereby as item No.11 fee/tax has been notified against delivery publicity through Motorcycle, Auto Rickshaw, four wheel vehicles and six wheel vehicles, however, the Respondents could not produce any document that the said approval was made in a manner as provided under section 42 of the Act. Similarly, the Respondents could not identify any specific subject/object as provided in Third Schedule stated above under which this fee/tax has been levied. However, under item No.11 the Local Government is competent to levy any fee on all types of advertisement including billboard other than on radio and television.
8. Even if we assume that the said Notification was issued after complying the provision of section 42 ibid then in such an eventuality the Respondents has to exhibit that there was a quid-pro-quo for the said fee. The term "tax" has been defined in Section 2(ff) of the Act to include any cess, fee, rate, toll or other charges leviable under the Act. It is settled law that tax is a compulsory exaction of money by public Authority for public purpose enforceable by law and is not payment for services rendered whereas fee is generally understood to be a charge for a special services rendered to individuals by some Government Agencies or Local Council. However, to charge fee the element of quid-pro-quo must be evident from record. "Collector of Customs and others v. Sheikh Spinning Mills (1999 SCMR 1402), McCarthy and Stone (Development) Ltd v. London Borough of Richmond upon Thames (1994 SCMR 1393) and Lucky Cement Factory v. Government of NWFP (2013 SCMR 1511)."
9. In the present case, we failed to understand that how the Respondents have assumed that the logo which is embossed on the helmet, jackets or motorcycle and other vehicles of the Petitioners involved in the "delivery services" is for the purpose of publicity. This logo prima facie appears to identify the vehicle/motorcycle carrying specific services on behalf of a particular Company/service provider, though it may have the effect of publicity, however, in this regard the Respondents could not establish that what is a quid-pro-quo for the said services. Indeed, it is also settled law that on the ambiguous assertions money cannot be extracted from the public as the same would offend Article 23 of the Constitution of Islamic Republic of Pakistan, 1973.
7. In view of what has been stated above, we have not been persuaded by the Respondents that the imposition of the impugned fee has either a quid-pro-quo or the Respondents has any legal mandate to collect the said fee from the Petitioners in garb of Notification dated 27.05.2019. Since, the vires of Notification dated 27.05.2019 is not before us, therefore, we will not express any opinion regarding its legality, however, suffice it to mention that the demand of the impugned fee in garb of the said Notification is not legally valid.
Both the petitions are disposed of in the above terms.
[1]42. Imposition, notification and enforcement of Taxes.-(1)A local government subject to the provisions of any other law may, and If directed by Government shall, levy all or any of the taxes and levies specified in the Third Schedule.
(2) No tax shall be levied without previous publication of the tax proposal inviting and hearing public objections and approval of the respective local council.
(3) A local government may reduce, suspend or abolish a tax.
(4) Where a tax is levied or modified, the local government shall specify the date for the enforcement thereof, and such tax or the modification shall come into force on such date.
(5) Government shall have power to direct a local government to levy any tax, increase or reduce any such tat or the assessment thereof and suspend or abolish the levy of any tax.