1. GHULAM RASOOL K. SHAIKH, J.-These Constitutional Petitions are against the levy of market fee by the Gharo Union Council.
2. The first petition bears No. 253-67. In this the petitioner is a company incorporated under the Companies Act having its registered office at Karachi. It owns a large number of salt works at Gharo within the District of Thatta, where the salt is manufactured and then transported to Karachi for export to Japan from the head office of the company situated at Karachi. It is alleged in the petition that no sale takes place at Gharo where the salt is manufactured. The Union Council at Gharo declared the salt works of the petitioner-company as market under rule 4 of the Union Council Dharat (Fees for Markets) Rules, 1961 and claimed fee at the rate of one paisa per rupee of salt sold in retail and 2 paisa per rupee of the salt sold in wholesale or otherwise. The company was called upon by a notice to pay the aforesaid fees. On the receipt of this notice the company protested to the Commissioner, Hyderabad and the Government of Pakistan but the Secretary of the Government of West Pakistan by his letter dated 8-9-1965 addressed to the Deputy Director, Export Promotion Bureau, Government of Pakistan intimated that there was no exception in favour of the exports and thus the exporter should not grudge payment of Dharat (Fees for Markets). A notice under section 152 of the Land Revenue Code for the recovery of the market fee was also received by the company through the Mukhtiakar of Mirpur Sakro. A reply dated 12-1-66 was seat to the Mukhtiarkar denying the liability on the ground that no sale takes place at the salt works at Gharo. A further demand notice was received on 16-5-67 and a similar reply was again sent.
3. Conse--quently the Mukhtiarkar sent a latter dated 30th May 1967, threatening to take coercive measures under the Land Revenue Code for the recovery of the dues. Hence the present petition was filed.
4. The second petition is No. 311/67. The petitioner is a registered firm carrying on business at Karachi.
5. The petitioner owns a premises located at Dhabeji, Gharo, Mirpur Sakro, Thatta and Hyderabad where raw bones are collected from the entire West Pakistan and crushed for the purpose of export to Belgium, Japan and United Kingdom. The petitioner also exports horns. It is pleaded in the petition that the transac--tions of the export are made at Karachi which is the principal office of the petitioner. The petitioner only crushes the bones at Dhabeji and no other process is carried on there. The petitioner is not a manufacturer and does not carry on any manufacturing business.
6. Even no transaction either of sale or purchase takes place at Dhabeji. An intimation dated 1-11-63 was received from the Chairman, Union Council, Gharo that the premises of the petitioner was declared as market within the meaning of Rule 4 of the West Pakistan Union Council Dharat (Fees for Markets) Rules, 1961 with effect from 7-10-1963. A copy of the notification, dated 7-10-1963 issued by the Deputy Commissioner, Thatta sanctioning imposition of fees for market was enclosed. The petitioner denied its liability on the ground that no business was transacted at Dhabeji. This reply was not accepted. The petitioner, therefore, made representation to the Commissioner, Hyderabad Division, but it was rejected by order dated 3-5-65. Consequently the petitioner approached the Secretary, Basic Democracies, Social Welfare Department, Government of West Pakistan, by a petition on 18-5-65. In the meantime the Mukhtiarkar of Mirpur Sakro threatened to take action under the Land Revenue Code. The Deputy Commissioner, Thatta also informed the petitioner that the Provincial Government in a similar matter of M/s. Hirjina Salt & Chemicals (Pak.) Ltd. (petitioner in Writ Petition No.253/67) had held that the imposition of marked fee was valid. The petitioner was further called upon to pay the market fee otherwise coercive measures would be taken.
7. Consequently the Present writ petition was filed.
8. The third petition is No. 238/69. The petitioner is a private limited company having its registered office at Karachi. It manufactures salt in a factory situated at Dhabeji but it is claimed by the petitioner that no sale of the salt takes place at Dhabeji and this is done at Karachi at the registered office. The Deputy Commissioner, Thatta vide notification, dated 7-10-63 declared inter alia Dhabeji as market within the meaning of Rule 4 of the West Pakistan Union Council Dharat (Market Fees) Rules, 1961 and sanctioned the levy of Dharat i.e. Market Fee by the Union Council, Gharo at the rate of one paisa per rupee of the sale price of the goods. The petitioner, therefore, sent a letter dated 12-11-63 in reply pointing out that its salt works did not come within the purview of the said notification as only the production work was done there and no sale was made at Dhabeji. It was further pointed out that all sale transactions used to take place at Karachi at the registered office. However, the Union Council, vide its notice dated 9-7-66 demanded Rs. 59,400 being the amount of market fee but subsequently vide notice dated 16-5-67 the amount of fee was demanded as Rs. 55,000. Against these notices it was pointed out to the Mukhtiarkar that the market fee could not be levied as no sale was done at Dhabeji. It was further pointed out to him that under the Third Schedule to the Constitution of Pakistan salt was a central subject and only the Central Government was competent to levy taxes, dues and fees etc. On the sale of salt. In reply to this, the Mukhtiarkar sent a letter, dated 30th May 1967, wherein although it was admitted that only manufacturing was done at the factory but it was contended that the demand was legal.
9. Subsequently a telegram, dated 8-6-67 was received calling upon the petitioner to pay the market fee. A reply to this telegram was also sent by letter, dated 10-6-67 pointing out that without prejudice to its right under law the amount claimed as market fee was exorbitant and arbitrary as according to the turn over for the period from 7th October 1963 to 30th June 1966 the amount of market fee would be only Rs. 9,239.86. In reply to this the Mukhtiarkar sent a letter, dated 13th June 1967, directing the petitioner to submit a certificate from the Excise Department, regarding the issue of salt from the petitioner's factory for the period from 7-10-63 to date yearwise separately and documents regarding sale price of the goods per month. Consequently the required certificate obtained from the Central Excise and Taxation Department Dhabeji in respect of the total turn over of the goods for the period from 7-10-67 to 31-5-67 was sent along with the account sheet duly attested by the petitioner's auditor in June 1967. On the basis of these documents the Mukhtiarkar assessed the market fee at Rs. 9,609.16 for the period from 7-10-63 to 31-5-67. It was further pleaded in the petition that since the demand was illegal and without lawful authority no payment was made nor any further demand was made probably for the reason that M/s. Hirjina Salt Works Dhabeji had filed the aforesaid writ petition in this Court. However, after the expiry of nearly two years again a demand notice dated 5-4-69 for an amount of Rs. 71,000 from the period from 7-10- 63 to 6-7-68 was received calling upon the petitioner to pay the amount within three days. To this a reply, dated 8-4-69 was sent pointing out that the market fee could not be levied for salt. It was further pointed out that the writ petition filed by M/s. Hirjina Salt Works was already pending. The amount claimed by the Mukhtiarkar was also disputed on the ground that on the basis of the account hooks and the documents the market fee was assessed at Rs. 9,609.16 and, therefore, the claim of Rs. 71,000 appeared to be clerical mistake. On the receipt of this letter a note was made by the Mukhtiarkar on the letter that the amount of Rs. 9,609.16 due from the petitioner up to 1967 be paid pending final decision by the competent authority. Thus the present writ petition was filed.
10. These petitions were opposed by the respondents and it was claimed that the market fee was legally levied and the petitioners were bound to pay the market fee as claim from them. The claim of the petitioners that the premises were used for the manufacture of salt and crushing bones and no sale used to take place in those premises was not disputed by the respondents, in the correspondence and orders as well as the counter-affidavit sworn in by respondent No. 2 (Mr. Muhammad Yacoob, Mukhtiarkar, Mirpur Sakro) on 8-5-69 in Petition No. 238 of 1969. Till then the case set up by the respondents was that since the premises where goods were manufactured for sale, were situated within the jurisdiction of the Union Council, the exporters were also liable to pay the market fee imposed by the Union Council and demanded from them. However, in the subsequent affidavit, dated 14-5-69 filed by the same officer, the stand taken by the respondents is reflected by paras. 2, 3 and 7 which read as under :- "(2) That it is denied that no sale whatsoever takes place at the petitioner's salt works at Dhabeji. In fact goods are loaded for transport from the Factory and property in goods passes to the purchasers at Dhabeji. However, under the Basic Democracies Order, 1959, it is competent to the Government of West Pakistan to frame Rules for the levy of fees and under Rules 3 and 4 to declare any premises or area within the Union Council, used for manufacture of goods which are intended for sale, as Market. The Notification in question has declared the petitioner's manufacturing premises at Dhabeji as a Market within the definition given by the relevant Rules.
(3) That it is submitted that there need be no quid pro quo between the collection of fees and the amenities or the services, as the fee is not a payment in the nature of price paid for buying any article or remuneration for services rendered persuant to a contract. However, it is submitted that amount calculated through this fees is being spent by the Union Council, Gharo on maintaining roads, keeping the areas clean and hygienic and for such allied purposes from which the petitioners also receive or are entitled to receive equal benefits.
(7) That it is submitted that the fees in question are Dharat (Fees for Market) and not a fee on sale.
11. However, it is submitted that assuming that is some kind of overlapping between the powers of the Central Legislature and the powers of the Provincial Legislature, the principle of "pith and substance" is to be followed, and the provisions of law and rules in question, their substance, true nature and character should be ascertained. It is humbly submitted that it is within the competence of Provincial Legislature, and the Commissioner to provide for and to levy the fees in question under Articles 60, 61, 62, 68 and 89 of the Basic Democracies Order, 1959 read with West Pakistan Home Department Notification No. SOPBD/I/3/:0, dated 6th of May 1960, (Rules framed thereunder) viz. The West Pakistan Union Council Dharat (Fees for Markets) Rules, 1961."
12. At this stage a glance at the history of the legislation becomes necessary. The Basic Democracies Order, 1959 President's Order No. 18 of 1959) hereinafter called the Order, .Was made and promulgated by the President of Pakistan in pursuance of the Proclamation of the 7th October 1958 and in exercise of all powers enabling him in that behalf. It was published in the Gazette of Pakistan, Extraordinary, dated 27th October 1958. Articles 1 and 3 were enforced with immediate effect throughout Pakistan while the rest of the Order was enforced in West Pakistan and East Pakistan on 10th November 1959. To the federal capital of Karachi and all cantonments in Pakistan, it was applied three days later.
13. Article 60(1) of the Order empowered a District Council with the previous sanction of the Government, and a Union Council with the previous sanction of the Commissioner to levy in the prescribed manner, all or any o' the taxes, rates, tolls and fees mentioned in the Fifth Schedule.
14. However the Commissioner in West Pakistan had teen authorised to delegate their powers of sanctioning the taxation proposals of Union Councils to their Deputy Commissioners under clause 1 of the Article vide Notifica--tion No. SO1(BD) 1-3/61, dated 7-4-61. It is further provided by clause 2 of the Article that the Government may by notification in the official Gazette specify separately taxes, rates, tolls and fee mentioned in the aforesaid Schedule which may be levied respectively by District Council and by Union Council and when such a notification is issued, neither of them shall be competent to levy taxes, rate, tolls, fees leviable by the other. Fees for Markets could be levied by a District Council and a Union Council, vide item No. 24 of the Fifth Schedule. In order to specify taxes, fees etc. Government notified two separate schedules. In the schedule for the Union Councils, the fees for markets was included as item No. 16, vide Notification No. SO1(BD)1-3/60, dated 20-7- 60.
15. The rules-making power has been conferred upon the Government by Article 89 of the Order. It lays down that the Government may make rules to carry out the purposes of the Order and in particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters enumerated in the Sixth Schedule, and all matters incidental, consequential and supplemental thereto. Referring to Sixth Schedule, item No. 22 relates to the "Regulation of the: assessm ent, collection, and administration of taxes, rates, tolls and fees, and all matters relating thereto" while item No. 25 covers "any matter required under any of the provisions of this Order to be prescribed". Article 62 lays down that the Government may frame model tax schedules and where such schedules have been framed, District and Union Councils shall be guided by them in levying a tax, rate, toll or fee. Accordingly model tax schedule for the Dharat (Fees for Markets) was prepared. This schedule is the form prescribed for the issuance of the notification under Rule 4 to declare a premises as market.
16. The Government framed Union Councils Dharat (Fees for Markets) Rules, 1961 and enforced with immediate effect as per Notification No. SO1(BD)1-8/61, dated 13-2-62. There are in all 8 rules. The relevant rules are rules 2, 3 and 4 which read as under : "2. Model Tax Schedule.-In levying Dharat fees for markets, a Union Council shall be guided by the Model Tax Schedule appended to these rules.
3. Definitions.-In these rules, unless the context otherwise requires, the following expressions, shall have the meaning hereby respectively assigned to them, that is to say-
(a) "Dharat" means fee levied under these rules with regard to any transaction in a market ; and
(b) "Market" means any premises or area declared to be a market under rule 4.
4. Declaration of Market.-A Union Council may, with the previous sanction of the Controlling Authority, declare any premises or area within the Union, used for the manufacture of goods for sale or for the sale of goods to be a market with effect from such date as may be specified. The declaration shall be notified in the official Gazette and shall also be publish--ed in the Union in such other manner as may be determined by the Union Council."
17. The Deputy Commissioner, Thatta, in pursuance of the powers delegated to him by the Commissioner, issued notification dated the 7th October 1963, in terms of Model Tax Schedule, sanctioning proposal for Dharat (Fees for Markets) and declaring Gharo, Dhabeji and other places as market within the meaning of Rule 4 of the Union Councils Dharat (Fees for Markets) Rules, 1961.
18. The notification reads as under :- " OFFICE OF THE DEPUTY COMMISSIONER, THATTA Notification The 7th October, 1963.
19. No. BD/LB/2143.-In exercise of the powers, conferred by Article 60 (1) of the Basic Democracies Order, 1959, read with Commissioner of Hyderabad Division's Notification No. 3450-D/60, dated 14- 4-1961 delegating the powers to the Deputy Commissioner of his Division for sanctioning the proposals of taxes of the Union Councils in their respective Districts. I, Shahjehan S. Karim, C. S. P., Deputy Commis--sioner, Thatta, hereby sanction the imposition of the following schedule of taxes levied by the Union Council, Gharo Taluka Mirpur-Sakro of District Thatta within its jurisdiction.
20. This schedule of tax shall come into force with immediate effect.
21. SCHEDULE OF TAX DHARAT (FEE FOR MARKETS)
22. Short title and commencement.-This schedule may be called the Gharo Union Council Dharat (Fee for Markets) Schedule.
23. It shall come into force with immediate effect.
24. Markets.-The following premises and area in the Union shall be markets within the meaning of Rule 4 of the West Pakistan Union Councils Dharat (Fees for Markets) Rules, 1961 with immediate effect:
(1) Gharo.
(2) Dhabeji.
(3) Bahra.
(4) Thahin.
(5) Giyo.
(6) Fitter Plant Gharo.
(7) Hirjina Salt Works.
(8) Dhabeji Salt Works.
(9) Quraishi Salt Works.
(10) Muhammadi Salt Works.
1. Dharat (Fee for Markets) in respect of goods sold in a market by retail, Dharat shall be levied at the rate of one paisa per rupee of the sale price and shall be payable by seller.
2. In respect of goods sold in markets, wholesales by auction or otherwise, Dharat shall be levied at the rate of two paisa rer rupee of the sale price, one-half of Dharat being payable by seller and the other half by the buyer. The share payable by the buyer, shall be collected by the seller and tae total amount payable both by the buyer and the seller, shall be paid by the seller to the Union Council.
25. (Sd). Shah Jehan S. Karim, Deputy Commissioner, Thatta."
26. In pursuance of this notification the petitioners were called upon to pay Dharat (Fees for Markets) for their respective Articles. The relevant portion of the notices reads as under :- "Premises of your Company have been declared Market within the meaning of Rule 4 of West Pakistan Union Council Dharat (Fees for Markets) Rules, 1961 with immediate effect i.e. 7-10-1963.
27. You are therefore, required to pay the Dharat (Fees for Markets) at the following rate in respect of all kinds of goods sold within your company from 7-10-1963.
28. Dharat (Fees for Markets) in respect of goods sold in a market by retail, Dharat shall be levied at the rate of one paisa per rupee of the sale price and shall be payable by seller.
29. In respect of goods sold in markets, wholesale, by auction or otherwise Dharat shall be levied at the rate of two paisa per rupee of the sale price, one-half of Dharat being payable by seller and the other half by the buyer. The share of buyer is to be collected by the seller and the total amount payable both by the buyer and seller shall be paid by the seller to the Union Council."
30. It may be noted here that the word "Market" as defined by Rule 4 ante refers to two category of places; (1) premises used for the manufacture of goods for sale and (2) premises used for sate of goods. It, therefore, follows that the premises where either of the acts is performed or both are performed shall be treated to be market within the meaning of the rules. As is clear, the necessary declaration has to be made by the Union Council with the previous approval of the Controlling Authority. In the present case the Notification was issued by the Deputy Commissioner declaring the various places as markets within the meaning of Rule 4 but the sale of fee for markets payable by seller and buyer was prescribed in respect of goods sold in the market either by retail or wholesale by auction or otherwise. Neither any provision is made in the Notification regarding the market fee in respect of the goods manufactured for sale nor any scale of fee has been prescribed therefor. The demand notices issued by the Union Committee also literally follow the notification.
31. This brings us to the contentions raised by the learned counsel for the petitioners. It was urged that Rule 4 of the Union Council Dharat (Fees for Market) Rule was ultra vires to the extent it went beyond the scope of the Basic Democracies Order, 1959, under which the rules were framed and the fee was levied, on the principle that a rule cannot go beyond the main statute or expand its meaning. To elaborate this, it was stated that since the word "market" was not defined by the Order it was to be understood and interpreted in its ordinary dictionary meaning, that is to say, a public place where goods are brought and sold and, therefore, the premises which were used simply for carrying on manufacturing process, could not be termed as market, notwithstanding the fact that the goods are manufactured for sale, so long no sale takes place within the premises or in any case within the jurisdiction of the Union Council the second contention was that the so-called fee was not a fee but in fact a tax as no service was being rendered. There existed a clear distinction between a tax and a fee. No fee could be levied without corresponding benefits of service to the petitioners. In this connection our attention was invited to the correspondence, orders and the first counter-affidavit filed by the respondents wherein it was not denied that no service was being rendered. With regard to the subsequent affidavit, it was urged that it should be ignored as being afterthought. In the two petitions challenging the levy of fee on salt, it wa3 further pleaded that under Article 131 of the Constitution, 1.962, the Central Legisla--ture had exclusive power to make laws with respect to any matter enumerated in the Third Schedule which included duty on salt as item No. 43. And, therefore, neither the Provincial Legislature nor the Union Council nor any other authority had power to levy fee or tax on salt and consequently the levy of fee on salt was without jurisdiction and of no legal effect. Lastly, the learned counsel for the petitioner in Petition No. 311 of 1967 challenging the fee on the crushing of bones urged that the crushing of bones did not constitute manufacturing of any goods and, therefore, this process was not covered by the defini-- tion of the word "market" as prescribed by Rule 4.
32. Taking up the first contention regarding the vires of Rule 4, the learned Advocate-General effectively and efficiently provided the answer by reference to the various constitutional provisions.
33. He rendered valuable assistance in explaining the legal position so lucidly that where on conclusion of his arguments, the learned counsel for the petitioners rose to address in reply they frankly conceded that in view of what the learned Advocate-General had said, they would no longer contest the validity of the Rule and, therefore, it was intra vires. In view of this concession it became unnecessary to pursue this point further. However, we would like to summarise the various provisions of law to which our attention was drawn by the learned Advocate-General, in the following paragraph.
34. It was pointed out by him that the Basic Democracies Order, 1959 was promulgated on 7th October 1959, when the previous Martial Law was in force, by virtue of Laws (Continuance in Force) Order, 1958 promulgated by the Chief Martial Law Administrator on 10th October 1958. By paragraph 2 of Laws (Continuance in Force) Order, the Constitution of 1956, was to be applied subject to any Order of the President or Regulation made by the Chief Martial Law Administrator. By paragraph 4--of the same Order, all laws other than the late Constitution and all Ordinances, Orders-in-Council, Orders other than orders made by the President under the late Constitution, such orders made by the President under the late Constitution as are set out in the schedule to the Order, Rules, Bye-laws, Regulations. Notifications and other legal instruments in force in Pakistan, or in any part thereof, or having extra-territorial validity, immediately before the Proclamation, shall as far as applicable and with necessary adaptations as the President may order fit to make were continued to be in force until ordered, repealed or amended by competent authority. In this Article a law is said to be in force if it has effect as law whether or not the law has been brought into operation. He, then, referred to Article 6:1 of the Basic Democracies Order authorising the imposition of taxes, fee etc. By a local council and Article 89 of the same Order in respect of the rule-making power of the Government. No definition for the word "Market" has been provided in the Order although the fees for market which could be levied is included as item No. 24 in the Fifth Schedule and item No. 16 in the Second Schedule as specified by the Government. The Rules were prepared and the word "Market" was defined. The learned Advocate-General emphasised that the rules were part of the Order as much as the Schedule by virtue of provisions of Article 92 (6) of the Order laying down, "All rules and bye-laws when duly made shall be deemed to form part of this Order, and shall have effect accordingly" and, therefore, rules enjoyed the same immunity from attack as the Order itself.
35. To support this reference was also made to Article 225 of the Constitution of 1962 promulgated on let March 1962 after the enforcement of the Rules. The Rules were enforced with effect from the date of notification i. e. 13-2-62. Article 225 (1) of the Constitution lays down, "except as provided by this Article, all existing law shall, subject to this Constitution, continue in force, so far as applicable and with necessary adaptations, until altered, repealed or amended by the appropriate Legislature" while clause (7) of the Articles says, "In this Article, 'existing law' means all laws (including ordinance, Orders-in-Council, Orders, Rules, Bye-laws, Regula--tions and Letters Patent constituting a High Court, and any Notifications and other legal instruments having the force of law) in force in Pakistan or any part of Pakistan, or having extra-territorial validity, immediately before the commencing day. It, therefore, follows that the rules became the existing law and cannot be assailed.
36. Probing further into the contention, there may be no" doubt that rules cannot prevail on the provisions of the Statute by simply providing that the rules shall be deemed to be part of the Statute and in case of inconsistency between them, the Statute must prevail but this is subject to the rule that after efforts having been made to reconcile them, the conflict is incapable of resolution. Furthermore, as already pointed out neither the Order nor the schedule lays down any definition and, therefore, the question of inconsistency does not arise. Inconsistency on the basis of the dictionary meaning cannot be pressed into service. A departure from ordinary dictionary meaning can be validly made by a Statute or rules framed there--under. Assistance from the dictionary is permissible only in the absence of the definition in a Statute or the rules. Since the rule itself provide the meaning no foreign aid can be sought to resolve the meaning. Thus the rule does not suffer from any legal infirmity.
37. Another objection raised to the validity of the rule was that the levy of fee was in the nature of a sale tax as no service of any kind was rendered to the petitioners. Distinction between a fee and a tax was sought to be drawn on the ground that a tax was levied as a part of a common burden while a fee was a payment for a special benefit or privilege. On the other hand the respondents challenged the assertion that no service was being rendered. It was maintained that the amount realised by the fee on market was being spent on the maintenance of roads, for keeping the area clean and hygienic and for such allied purpose from which the petitioners also received or were entitled to receive equal benefits. In view of this averment it cannot be said that the purpose for which the fee is imposed is not legiti--mate or no special benefit is received by the petitioners. Of course this averment was made in the second affidavit but that is no reason to exclude it from consideration. Moreover, it is a question of fact and in writ jurisdiction High Courts have declined to investigate disputed facts. Additionally, some duties and obliga--tions are imposed on the Union Councils for the supervision and regulation of private markets and, therefore, in order to meet the expenses necessitated thereby, the fee could be legally imposed. The learned Advocate-General also pointed out several items in the schedule, some of them made provision for the service to be rendered and some did not contemplate the rendition of any service, and, therefore, according to him it was not necessary for the validity of the fee that service must necessarily be rendered. Lastly, the rule cannot be assailed in view of the constitutional sanction.
38. So far, the various objections to the validity of rule 4 have been considered and it has been found that this rule is not open to exception. The demand notices have been questioned on a few grounds which will be dealt with presently.
39. In the first place it was contended that although the rules acquired immunity from attack by virtue of the constitutional provisions, that immunity could not be extended to the levy of the fee as the notification declaring the premises as market was issued on 13th October 1963 i. e. After the promulgation of the Constitution of 1962. We are unable to agree that the demand for the fee is open to attack on the ground pleaded before us. Before the Constitution was promulgated the Basic Democracies Order with the schedule was enforced, notification empowering the Union Council to levy fees for markets was issued and the Union Councils Dharat (Fees for Markets) Rules were framed. Even the rate of fees to be levied by the Union Council was fixed by the Model Dharat (Fees for Markets) Schedule appended to the rules. Thus the power to impose the fee for market validly vested in the Union Council. The necessity of obtaining the approval of the Controlling Authority for the declaration of the premises or area as market, was the only obstruction that stood in the way. The granting of the approval was an executive func--tion as was observed by the Supreme Court in the case of Pakistan Textile Mill Owners' Association v. Administration of Karachi (PLD 1963 SC 137). This executive function was performed on 13th October 1963 when the notification according the approval by the Deputy Commis--sioner was issued. The aforesaid objection that no fee was levied prior to the Constitution of 1962 and it was for the first time levied when the demand notices were issued, was based on the ordinary dictionary meaning, according to which it means "to raise and collect by authority as tax". In order to meet this objection the learned Advocate-General invited our attention to the case of Abdul Rashid v. Central Board of Revenue (PLD 1965 Pesh. 249) in which the same question arose for consideration and it was held that the word "levied" used in Articles 48 and 237 of the Constitution related to the fixation of a rate of duty or tax and to support this view reliance was placed upon the meaning of the word provided by Webster's dictionary as "imposed by authority" and the decision in the case of S. Gopalan v.
40. State of Madras (AIR 1958 Mad. 539) wherein three stages, namely, levy, assessment and collection had been specifically mentioned as being different acts of the relevant authorities in giving effect to a fiscal Act.
41. In Writ Petitions Nos. 253 of 1967 and 238 of 1969 which relate to the levy of fee on the market where the salt is manufactured for sale, it was urged that salt being item No. 42 (b) of the Third Schedule of the Constitution (1962), the levy of duty was a central subject and, therefore, the Union Council was not competent to levy fee. We find no force in this contention. The Union Council has not levied the fee on salt as such but the fee is referable to the market i. e. The premises or area where the salt is manufactured for, sale. No fee is leviable if sale is not intended. It is an admitted position that the salt was manufactur--ed for sale. If the premises or area has been declared as market, fee is leviable on the article or articles manufactured there for sale irrespective of the nature of the articles. Suppose if in a market two or more articles including salt are manufactured for sale, all the articles including salt so manufactured will be equally liable to the levy of fee. Thus the decisive factor is the premises or area and not the article. It was further pointed out by the learned Advocate-General the in some cases there might be overlapping in one sense but there was no overlapping in law. To support this contention, he referred to the case of The Province of Madras v.
42. Messrs Boddu Paindanna & Sons (AIR 1942 FC 33) and Rashid-ud-Doula v. Chief Administrator of Auqaf (PLD 1971 SC 401) in which the principle was fully discussed.
43. In Writ Petition. No. 311 of 1967 which has been filed to challenge the levy of fee on the crushing of bones it was urged that the crushing did not amount to manufacturing and, therefore, no fee could be levied. We find no force in this contention. According to Oxford English Dictionary, the word `manufacture' means-
(i) the action or process of making articles or material (in modern use, or on a large scale) by application of physical labour or mechanical power;
(ii) to make up (material) into forms suitable for use;
(iii) to make or fabricate from material ; to produce by labour (now esp. On a large scale).
44. Manufacturing involves a process which changes the form of the article, though the basic constituent remains the same. Take for instance the textile produced from cotton, wool etc. By the employment of various processes. Bones when crushed turn into powder. So the form is changed and the process thus employed is termed as manufacturing.
45. The last objection to the recovery of the fee had been founded upon the terms of the Model Schedule, notification declaring the premises area as market and the demand notices. The latter two documents have already been reproduced while narrating the facts. The third document, the Model Schedule, reads as under :- "MODEL DHARAT (FEES FOR) SCHEDULE Short title and commencement.-This schedule may be called the Union Council Dharat (Fees for Markets) Schedule.
46. It shall come into force with effect from and on. . .
47. Markets:-The following premises and areas in the Union shall be markets within the meaning of rule 4 of the West Pakistan Union Council Dharat (Fees for Markets) Rules, 1961, with effect from the dates shown against each :-
(1) with effect from (2)
48. (3)
49. (4)
50. Dharat (Fees for Markets).-(1) In respect of goods sold in a market by retail, Dharat shall be levied at the rate of one paisa per rupee of the sale price and shall be payable by the seller.
(2) In respect of goods sold in a market, wholesale, by auction or otherwise, Dharat shall be levied at the rate of two paisa per rupee of the sale price, one-half of Dharat being payable by the seller and the other half by the buyer. The share payable by the buyer shall be collected by the seller and the total amount payable both by the buyer and the seller shall be paid by the seller to the Union Council."
51. It is noticed that the Model Schedule like the other two documents, also prescribes the fee for sale in the market and is conspicuous by absence of any rate of fee in respect of the manufacture of goods for sale.
52. It may be recalled that the word "Market" as defined by rule 4, divides the premises/area as regards their use into two categories viz. (i) premises/area used for the manufacture of goods for sale and (ii) premises/area used for the sale of goods. It was, therefore, argued by the learned counsel for the petitioners that the two categories were distinct from each other and conveyed different senses. It was further argued that it was clear from the aforesaid three documents that the fee fixed and contemplated to be charged was in respect of the goods sold in the market and there was nothing in them to indicate that any fee was imposed on the mere manufacture of goods for sale without actual sale in the market declared as such. So according to the learned counsel although rule 4 permitted the levy of fee on the goods manufac--tured in the market for sale but the omission to make a similar provision in Model Schedule was deliberate and the fee was not intended to be recovered on such goods without their actual sale in the market.
53. Turning to the factual aspect of the case, it was maintained by the learned counsel that the case of the petitioners from the very beginning when the demand notices were issued, bad been that their products were never sold in the market declared as such under rule 4 but the transactions were concluded at their head office situated at Karachi and this was never disputed by the respondents who had defended the levy of fee on the sole ground that since the premises where the goods were manufactured for sale were situated within the market area, the exporters were also liable to pay the market fee. It was further pointed out that although the petitioners had reiterated their plea in these petitions and a counter-affidavit was filed by the respondents yet there was no denial but for the first time the denial was prefaced in para. 2 of the subsequent affidavit as already reproduced while narrating the contentions. In this connection it was emphasised that reading the aforesaid denial in the context of what followed it would be abundantly clear that the denial was contemplated to signify that since the goods were manufactured for sale and were loaded for export from those premises, sale was deemed to have taken place there. Consequently, it was contended that there was no denial of the plea taken by the petitioners.
54. On the other hand, the learned Advocate-General successfully defended the demand for the recovery of fee on legal plane by invoking in aid the provisions of the Sales of Goods Act. He pointed out that sale in legal parlance distinctly differed from the notion of sale commonly entertained. Consequently the alleged omission in the three documents was of no material consequence. It was further urged that since the goods manufactured for sale were exported from the market as such, the sale was taking place there in order to attract the application of the rule and Model Schedule. To meet the allegation that prior to the second affidavit there was no denial of the plea taken by the petitioners that in fact no sale took place in the premises declared as market, it was urged by him that it was immaterial at what stage the plea was refuted and further more it was a disputed question of fact and, therefore, it could not be investigated in these proceedings. With regard to para. 2 of the second affidavit he did not agree that the denial was not absolute or it was to be read subject to what follow--ed. He emphasised that the denial prefacing the para. Referred to the factual aspect of the case while the text which followed dealt with the legal aspect of the case. So according to him, the respondents opposed the claim of the petitioners on facts as well as in law.
55. Having considered the respective contentions we are of the view that the objection raised by the petitioner is untenable. Sale of goods and the incidences thereof are governed by the Sale of Goods Act. The first section to be referred to is section 4 which draws a distinction between "sale" and "agreement to sell". It reads as under "4. A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contrast of sale between one part- owner and another.
(2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition there--after to be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
56. The section draws a marked distinction between a contract of sale and agreement to sell. The contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price. Where under a contract of sale the property in goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in goods is to take place at a future time or subject to some conditions thereafter to be fulfilled, the con--tract is called an agreement for sale. Thus the former is an executed contract and the latter is executory contract. In other words sale creates a jus in rem as it passes ownership immediately when it has been executed, while a contract to sell is J us ad rem. For it only creates an obligation attached to the ownership of property not amounting to an interest therein.
57. As observed in the case of Pappatlal Shah v. State of Madras(AIR 1953 SC 274) the expression "sale of goods" is a composite expression consisting of various ingredients or elements viz. Bargain or contract of sale the payment or promise of payment of price, the delivery of goods and the actual passing of title, and each one of them is essential to a transaction of sale though the sale is not completed or concluded unless purchaser becomes the owner of the property. Thus the question whether the transaction is a sale or an agreement to sell, one of the main points of distinction which would arise for consideration in this case, is that the sale is a contract plus a conveyance while the agreement to sell is a contract. The word 'sale' in its legal sense, therefore, imports passing of property in the goods although in the popular sense it signified the transaction itself which results in the passing of the property. So it is not always that ownership of goods passes when the agreement to sell takes place and, therefore, the test for determining whether sale takes place at a particular place or not is whether under the contract between the buyer and seller the property in the goods does or does not pass at that place. There is no sale in legal sense without actual transfer of property. It is, therefore, idle to contend that in almost all cases the sale takes place at the time and place when the contract is entered into. It depends upon the terms of the contract and the nature of the goods involved in the transaction, that is to say, whether the contract is in respect of ascertained (specific) goods or unascertained goods as admittedly in these cases different considerations prevail. To add in addition, the time and place of an agreement to sell are irrelevant but the sole point for consideration is at to when the property in goods passed to the buyer and unless that point of time arrives there is no sale within the meaning of term as defined by section 4.
58. Sections 18 to 25 of Sales of Goods Act lay down certain rules to interpret the terms of contract with a view to ascertain the intention of the parties as to when the property in the goods passes to the buyer in order to complete the sale in its legal sense. When some goods are sold from a much larger stock on bulk, as in the present cases, the transactions are in respect of unascertain--ed goods and, therefore section 23 is applicable. This was also con--ceded by the learned counsel for the petitioners but subject to their main contention that the sales took place at their head office situated at Karachi. The rider is not supported by the language of section 23 which reads as under : "(1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.
(2) Where, in pursuance, of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deem--ed to have unconditionally appropriated the goods to the contract."
59. This section lays down the rule when the property in case of unascertained goods passes to the buyer. When there is a sale of unascertained goods it is well settled that before the property in the goods passes to the buyer, the individuality and identity of the goods to be delivered under the contract should be established. This is not possible unless the quantity sold is weighed and separated from the bulk. After the required quantity is severed from the bulk, it becomes in a deliverable state. Another condi--tion laid down by the section is that the goods when in deliverable state are unconditionally appropriated to the contract. Sub--section (2) further lays down that under certain circumstances the delivery of goods to the carrier or bailee shall be deemed to be unconditional appropriation.
60. From the above it follows that in the case of unascertained goods, the ownership does not pass at the time when the transac--tion is entered into. It will be a mere agreement to sell which, as already observed, is distinct from the sale itself. In order that the transaction may amount to sale, there must be appropriation. The law does not require any particular mode or form of appro-- priation. In certain cases the loading of the goods in a truck or any other conveyance to be transported to the port or to be ship--ped to the foreign country amounts to appropriation to contract and, thereby, the property passed to the buyer. Admittedly in the present cases the goods are weighed, separated from the bulk and loaded, within the premises/area declared as market.
61. Con--sequently it can be presumed that the property in the goods passes to the foreign buyers by the appropriation of the goods with the result that sale according to its legal terminology takes place within the market. Thus the objection taken by the petitioners is untenable.
62. It was, however, pointed out by the learned counsel for the petitioners that a mere appropriation of goods by the seller without the consent of the buyer, either express or implied, would not pass the property in the goods to the buyer and the burden being upon the respondents to establish the consent, it was not discharg--ed. We partly agree and partly disagree with this contention. We agree to the extent that without consent the mere appropria--tion does not pass the property but it was not specifically pleaded as a ground in the petitions that either the property in goods had already passed when the agreement to sell was made or it did not pass by appropriation. A vague statement was made that sale did not take place is the market. This hardly answers the point involved in the case. So far the onus of proof is concerned, we are of the view that it was on the petitioners to show when the property in the goods passed to the buyers. The terms of the contracts are within the special knowledge of the petitioners. They did not care to place any material either before the assessing authorities or before us to indicate that the despatches of goods from the places of manufacture did not amount to sale within the meaning of section 23 or the aforesaid three documents. Since the petitioners have withheld the documentary proof available with them, it is legitimate to draw an inference against them. More--over, as is apparent, it is a mixed question of law and fact and, therefore, cannot be investigated in writ petitions.
63. In the circumstance we have reached the conclusion that the petitioners have not successfully challenged the levy of duty and the demand notices issued by the respondents. We, therefore, dismiss all the three petitions. The stay stands discharged.
64. K. B. A.
65. Petitions dismissed