' The Punjab Co-operative Union, the petitioner, is the owner of a multi-storeyed Building, No, 5 Court Street, Lahore. For the year commencing on 1-7-1980 the Assessing Authority Lahore, under the provisions of the Urban Immovable Property Tax Act, 1958, assessed its annual value at Rs, 11,99,670 on which a tax demand of Rs, 42,402.25 was raised against the petitioner. The latter's objections against the assessm ent were turned down by the Assessing Authority. The petitioner then represented to the Provincial Government that being a local authority, its property was exempt from the levy but this representation failed. An attempt, to seek an exemption under section 3 of the Act, also met the same fate. The petitioner has now invoked the writ jurisdiction of this Court, that the assessm ent made and the demand raised against it, may be declared to be without lawful authority and that the respondents be restrained from recovering the property tax, from the tenants, in occupation of the building.
2. The petitioner's case is that it is covered by section 4(b) (ii) of the Urban Immovable Property Tax Act, under which any property owned or administered by a local authority, when exclusively used for public purposes and not used or intended to be used for the purposes of profit, is exempt from the tax. The petitioner undoubtedly is a society registered under the Co-operative Societies Act, 1925. The learned counsel, however, contends that the Union is a `local authority', it falls within the ambit of 'other authority' referred to in section 2(35) of the General Clauses Act, 1956, and that funds held by it qualify to be local-fund,' within the meanings of the said section; which it is legally entitled to manage. In order to prove, that the petitioner is covered by section 2(35) embodying the definition of the term 'local authority' he drew my attention to various bye-laws of the society, certain sections of the Act and some circulars issued by the Registrar Co-operative Societies, which indicate that the latter is the member of the managing-committee of the Union ; he appoints auditors to audit the accounts and also controls its financial-matters to a limited extent, as provided by sections 34 to 42 of the Act. He is further empowered by section 43, to hold an inquiry into the constitution, working and financial affairs of the Union either himself or through a person authorized lay him. After having shown that the Registrar has a hand in controlling some of the financial and administrative affairs of the Union, the learned counsel cited two precedents Atta-ul-Haq v. Chairman and Members of Election Appeal Committee (1), and Zakir Ahmad v.
University of Dacca and others (2), to urge that such a governmental control over a body, is an essential attribute of a local authority.
3. As it will be seen, the definition clause expressly categorizes the municipal committee, district board and body of Port Trustees or Commissioners, as a local authority and further includes within its ambit any "other authority" entrusted by the Government within the control and management of a "local fund". To explain the nature of the funds of the Union and the manner of collection thereof, the learned counsel referred to the rules of the society, and pointed out that its membership extends only to the co-operative societies and the funds compromise of the admission fee, membership fee, annual contribution and other subscription given by the members, sale of books and magzine etc. Grants allocated by the Government, loans, securities and profits accruing to the Union. According to him the funds held by the Union qualify to be "local fund" which it manages under the control of the Registrar.
4. It was next argued that the object, for which the Union has been created, is wholly a public purposes. In this respect the learned -counsel placed before me a brochure containing the objects of the society and contended that the sole purpose of the Union is to propagate, popularize and organize the co-operative Movement in the Province. He went on to submit, that to achieve these objects, the Union publishes literature, organizes lecture, holds seminars, arranges study tours and thus, educates the masses on various aspects of the co-operative movement. It was particularly emphasised that all income and funds of the Union are utilized for the purposes, for which it has been created and no part thereof is distributed amongst its members, as bonus, or profit or in any other manner.
5. The first question which needs to be answered is as to whether or not the petitioner Union is a local authority. As this term is not defined in the Urban Immovable Property Tax Act, its definition given in the General Clauses Act, would apply. The Punjab General Clauses Act, 1898, was repealed and replaced by the West Pakistan General Clauses Act, 1956. Section 2(35) of the latter Act, referred to by the petitioner's learned counsel, is the exact copy of section 2(30) of the repealed Act. The definition of the term "Idc authority" embodied in section 3(28) of the General Clauses Act, 1897 is al o couched in the same language. For the facility of reference this definition is reproduced below "Local authority" shall mean a municipal corporation, municipal committee, district board, body of Port Trustees or commissioners, or other authority legally entitled to, or entrusted by the Government with the control or management of a municipal or local fund."
' It is to be determined as to how for the petitioner's assertion that it is covered by the words "other authority" can be sustained. This term is preceded by three expressions namely "municipal committee", "district board" and "body of Port Try steeps or commissioners" and has got to be construed in the light thereof of the recognized modes of interpretation of statute {{FOOT NOTE}}
(1) PLD 1964 Dacca 73Q (2) PLD 1965 Dacca 122 {{FOOT NOTE}} ' is the "historical method" which as laid down in Messrs Rahe Manzil Transport v. Muhammad Ameen (1) at 206, means : "By setting out the background of the provisions to discover historical trends, and to seek guidance from them."
' A reference to the historical trends, the state of law anterior to the passing of the General Clauses Acts, and the definition of the three terms, namely, municipal committee, district board and the body of port-trustees or commissioners, given in the earlier statutes or in the statutes contemporaneous to the General Clauses Act, 1898, shall be helpful in understanding the meaning of these terms and the connotation of the words 'other authority' as used in section 2(35) of 1956 Act.
6. Before the promulgation of General Clauses Act, 1898 and even prior to the General Clauses Act,- 1897, with the advent of local self-Government in the Indian Sub-continent, which started from the lowest tier of the local-bodies, the nomenclature of the term 'Municipal-Committee' and the other two terms had already become part of the legal vocabulary. For instance in section 3(2) of the Punjab Municipalities Act, 1891 (Act XX of 1891) the word 'Committee' has been defined and means a 'Municipal-Committee' established by or under that Act. Still in another earlier Central Act, namely, the Municipal Taxation Act, 1881 (Act XI of 1881) the word `Municipal Committee' finds mention in almost all the important sections thereof. The legislature is presumed to know the significance of the terms used in the earlier statutes while repeating the same in the subsequent Acts. In the interpretation of Statutes by Maxwell, 12th Edition at page 264 it has been laid down that : "It is said that the best exposition of a statutes or any other document is that which it has received from 'contemporary authority Where this has been given by enactment or judicial decision, it is o course to be accepted as conclusive."
' Starting from the enactment of the earliest statutes in the sub-continent, dealing with local- bodies, such as the Punjab Municipal Act, 1873, the Punjab Municipal Act, 1884, the Burma Municipal Act, 1898 as amended by subsequent enactments, until the enforcement of the Municipal Administration Ordinance, 1960 throughout this legislative history, extending over a period of about hundred years, the word 'municipal-committee' has been used as a distinct entity.
7. The next words used in section 2(35) after the word 'municipal-committee' are 'district board' and 'body of Port Trustees or Commissioners'. The term district board has been used in the Punjab District Board Act, 1883, and under section 16 thereof every District Board is a body corporate. In Madras the Local Boards Act, 1884 was in force. In Bombay the management of local affairs, in rural areas was handled by the District Local Boards, created under the Bombay Local Boards Act of 1884. Likewise, the Bengal Local Self-Government Act, 1885 provided District Boards for each district in that Province. The local bodies functioning in the rural areas of the different Provinces of the undivided India, also bore the character of corporate bodies. It is, therefore, reasonable to presume that before the enactment of the General Clauses Acts of 1897 and 1898, the term "district board" had attained a particular concept, as a monument of local self-government system, in rural areas and this term was used in section 2(35) 'o convey the same connotation. {{FOOT NOTE}}
(1) ?LI) 1963 KU! 1.82 {{FOOT NOTE}}
8. The expression, the port-trustees or commissioners is to be considered now. Before coming into force of these General Clauses Acts, port-trusts,- to manage the affairs of the ports, had already come into existence. These port trusts were body corporate compromised of Trustees, appointed partly through election and partly by nominations. In this respect reference may be made to section 7 of the Bombay Act VI of 1886. So far as the word "Commissioners" is concerned, it appears to have been used as synonymous of the word "Trustees".
9. It is also significant that in section 2(35) the words "municipal committee" etc. Are preceded by the word- "means". It is now well settled that in contradistinction to the word "includes" whenever the word "means" is used in the interpretation clause, the expressions employed therein are to be given restricted meanings and the definition is to be considered as a hard and fast definition. In this view of the matter enlarged meanings cannot be given to the terms figuring in section 2(35).
10. As already stated during the period when the General Clauses Acts were promulgated, the local self-Government institutions had already been introduced in the rural as well as urban areas.
Different nomenclatures were used for the local bodies created under these statutes. For instance in the city of Bombay Municipal Act, 1888 and the Calcutta Municipal Act, 1899, the Local Body has been referred to as "Corporation". The Madras. District Municipalities Act, 1884 used the term "Municipal Council". In the Punjab Municipalities Act, 1891, the expression used was "Committee".
Similarly, there were District Boards and Taluk Boards under the Madras Local Boards Act, 1884 and District Boards under the Bengal Local self-Government Act, 1885, and the Punjab District Boards Act, 1883. There were also different port-trusts such as. Karachi Port Trust (Constituted under Bombay Act VI of 1886) Madras port Trust and Chittagong Port Trust. Seemingly, it was not feasable for the framers of the General Clauses Acts, to jumble in the definition clause the different names, under which the various local bodies, then functioned, in the provinces or for that matter in the country and only 3 of them were specifically named ; as regards others the words 'other authority' were incorporated therein. One thing is quite clear that in section 2(35) the term local-authority' has been as a synonymous of a local body ; in the context of and as an organ of local self- Government.
11. The words `Municipal-Committee', district board and the body of port-trustees or commissioners comprising a genus are followed by the general words 'other-authority'. In all the Acts relating to Municipal Committees, Corporations, District Boards and Local-Boards, etc. There is an element of election and by the time General Clauses Acts were passed, these local-bodies on the basis of elected members (partly nominated) had already been installed. The Post-Trust Acts also contained provisions for appointment of trustees through election (section 7 of Bombay Act VI of 1886). The three bodies enumerated in the first part of section 2(35) can be categorized as B organs of local self-Government and classed as a genus followed by general words 'other authority' These general words are to be constructed ejusdem generis with the words preceding them. In support of such an interpretation reliance may be placed on the Maxwell on Statutes 12th Edition page 326 wherein the principle of ejusdem generis is described as under :- "But the general word which follows particular and specific words of the same nature as itself takes its meaning from them and is presumed to be restricted to the same genus as those words. For 'according to well-established rule in the construction of statutes, general terms following particular ones apply only to such persons or things as are ejusdem generis with those comprehended in the language of the Legislature. In other words, the general expression is to be read as, comprehending only things of the same kind as that designated by the preceding particular expressions, unless there is something to show that a wider sense was intended, as where there is a provision specifically excepting certain classes clearly not within the suggested genus."
12. The words local-authority' have been defined in section 5 of the Bengal Local Self-Government Act, 1885, as under :- "The local-authority' means any District Board or Local Board, joint committee, or joint union committee constituted under the law."
In certain cases it may not be proper to use one Act directly for the purposes of interpretting another Act but comparison with an earlier Act, in pari materia is a well-recognized mode of interpretation. The comparison of the definition of Local Authority, as given in section 2(35), with its definition as found in the Bengal Local Self-Government Act, though by no means conclusive, yet marches with the construction that the two definitions tended to embosom the different institutions of the Local Self-Government.
13. The two precedents cited by the learned counsel for the petitioner may now be looked into. The question raised in Ataul Haq's case was as to whether or not National Bank of Pakistan was a local authority, within the meaning of Article 98 of 1962 Constitution. A Division Bench of the Dacca High Court referred to various provisions of Ordinance XIX of 1949, which showed that the Central Government held 25% of the shares in the Bank, and also made certain key appointments such as the Managing Director, and the President of the Central Board. These provisions led the Bench to conclude that the Bank was a local authority. However, in appeal, this view was not upheld by the Supreme Court. The appellate judgment is reported as the Deputy Managing Director, National Bank of Pakistan and 3 others v. Ataul Haq (1), in which the Supreme Court, has made the following observations, relevant to the matter in issue :- "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."
14. In the case of Zakir Ahmad, a Full Bench of the Dacca High Court considered the provisions of the Dacca University Ordinance, 1961, and found that the control of the Provincial Government over the University was similar to the one, exercised by it over the municipal or the other bodies. During the course of the discussion, the Court also referred to the definition of the term "local authority" in section 3(28) of the General Clauses Act, 1897 and maintained that the University was a local authority for the purposes of Article 98(2) of 1962 Constitution. This judgment was challenged by the {{FOOT NOTE}}
(1) L D 1965 SC 201 {{FOOT NOTE}} ' University through an appeal as reported in the University of Dacca v. Zakar Ahmad (1). The reason which prevailed with the Supreme Court in upholding the maintainability of the writ petition was, that it considered the University as a person performing functions in connection with the affairs of the province.
15. Mere control of the Government over the affairs of a body alone is not sufficient to confer on it the status of a local authority within the meanings of section 205) of the General Clauses Act. Both the precedents relied upon by the learned counsel for the petitioner does not advance hi cause, in any manner. In view of the foregoing discussion, in my considered opinion as already observed, the words 'local authority' in section 2(35) are to be given restricted meanings, ejusdem generis with the words preceding the same. The petitioner Union does not fall within the genus of the corporate bodies comprising municipal committee and District Board, etc.
16. I shall now proceed to examine the petitioner's claim that the funds held by it qualify to be local- fund' in the same sense, as this expression appears in section 2(35) ibid. It may be added that the term local-fund' has been used in some of the earlier statutes as well. In the Cattle Trespass Act, 1871, the words `local-fund' have been defined as "Any fund under the control or management of a local authority."
' It shall not be inapt to make here a reference to the definition of the word `funds' as incorporated in section 3 of the Local Authorities Loans Act, 1879, which is re-produced hereunder " 'Funds' used with reference to any local authority, includes any local municipal fund to the control or management of which such authority is legally entitled, and any cess, rate, duty or tax which such authority is legally entitled to impose, and any property vested in such authority."
' A verbatim copy of this very definition has been included in the. Local Authorities Loans Act, 1914, which replaced the Act of 1879. The statute of recent origin using the words local-fund' is the Basic Democracies Order, 1959, since repealed ; Article 3(25) whereof describes this term as under " `Local-fund' means the fund of a local council, a Municipal body or a Cantonment Board, or of any other Local-Authority."
17. When the meaning of a Statute is in doubt, the Court may inform itself of the contemporaneous circumstances, as a manifestation of the legislative intent. It is reasonable to presume that the circumstances surround-E in the enactment and the history of the times provide a clue to the meanings of the doubtful words. In this connection, it may be observed that before the enactment of the General Clauses Act, 1897, the Government of India Resolution No, 17/747-759, dated 18th - May, 1882 published in the supplement to the Gazette of India, 20th May, 1882, aiming at giving impetus to the system of. Locals Self-Government in the Sub-Continent ; by decentralization of financial-matters, on uniform basis, and giving extended control to the local bodies, over the income from local rates and cusses etc. Was being vigorously pursued. Various statutes relating to the Local Self-Government were passed during that period, which contemplated placing of a particular fund at the disposal of the local-body to be locally administered by it, for the purposes of the Act creating such local-body. The broad features of the {{FOOT NOTE}}
(1) PLD 1965 SC 90 {{FOOT NOTE}} ' fund, visualized by these statutes were almost identical. It mainly comprised of the grants made by the Government, the proceeds of the taxes, rates, cusses and fees, imposed by the local-body and the income derived from the property vesting in it. Viewed in the light of this historical background, the proceeds of taxes, rates and other such charges levied by the local body, under the powers conferred on it by the statutes, appear to be a essential element of the local-fund' when this term is used with reference to a local-body or for that matter the local-authority. There is no proof that the petitioner receives any grant, from the Government. Anyhow, mer receipt of grant by itself would not give to its funds, the color of 'local-fund'. The petitioner has absolutely no power to impose any levy. Except for a few of its distinguishing features, which are hardly of any significance in the context of section 2(35) ibid, the fact remains, that it is basically a co-operative' society, registered under the Co-operative Society Act, 1925, like .a host of other societies, which are managed and controlled under the said Act, having no semblance of a 'local-authority'.
18. Considered from any angle, there is no substance in the argument of the petitioner's learned counsel that the Union is a Local-authority, as envisaged by section 2(35) ibid. But that is not all.
There is still another hurdle in granting the exemption solicited by the petitioner. Before going ahead, I may add that it is a cardinal rule of construction of statute that th provisions granting exemptions and privileges, should receive strict interpretation. Admittedly, a substantial part of the building has been demised to different tenants. Section 4(b) (ii) of the taxing statute, permits grant of exemption only when the property is exclusively used for public purposes. It can hardly be refuted that the letting out of the property to the tenants is not a public purpose. It is a different matter that the rental income may be diverted to an end recognised as a public purpose. The exemption has a nexus with the use of the property and not the subsequent utilization of its income for a public purpose. It is thus idle to plead that the objects for which the Union has been registered constitute public purposes.
19. Having failed to gain any other ground, the petitioner's learned counsel made another submission, that a part of the building is being utilized for maintaining a library and thus at least to that extent, in contemplation of section 4(d) of the Act, the property cannot be subjected to the levy. There can be no doubt that the utilization of portion of the building exclusively for a library, can be regarded as one for educational purposes, within the meanings of clause (d). There is, however, nothing on the record to show as to which portion of the building has been occupied for the library.
This issue cannot be decided without recording evidence and does not appear to have been raised before the Tribunals below, in the manner, as urged in these proceedings. The petitioner's remedy thus, would lie in approaching the authorities below in this behalf. The learned Assistant Advocate-General states at the Bar, if the petitioner succeeds in bringing his case within the ambit of this clause (d), the Departmental-authorities would not hesitate in allowing the ratable exemption.
20. Subject to the observations made in the preceding paragraph, I find that the Tribunals below in taxing the petitioner's property has acted within the limits of law. The petitioner has failed to show that the action of the respondents suffers from any illegality much less a jurisdictional defect.
Accordingly, the writ petition having been found without any merit, is dismissed, leaving the parties to bear their own costs.