NOORUL ARFIN, J.-----This letters patent appeal questions the judgment given on 3rd June 1966 by a learned Single Judge of the Karachi Bench of the former High Court of West Pakistan. The relevant facts may be stated in this way. Eduljee Dinshaw Ltd. (respondent No. 1) are owners of a plot bearing Survey No. 98, Survey Sheet No. GK-8, Ghulam Hussain Kassim Quarters, Karachi, together with godowns thereon, being successors --in-title of the firm which was known as "Eduljee Dinshaw". By a lease deed dated 28th January 1945 (Exh. 5/1), the firm of Eduljee Dinshaw let out this property to Dadabhoy Hormusjee & Sons (respondent No. 2) for a term of five years, renewable for a further term of five years at the opti9rl of the lessees, in consideration of the monthly rent of Rs. 893.00.
It would appear that the lessees, that is, the respondent No. 2, continued to be in possession of this plot as tenants even after the expiry of the periods of lease The lessees, in exercise of the rights which they had under the lease deed, constructed an additional godown in the said property, but without being required to pay any additional rent to the lessors, it being the condition of the lease that the lessees would not pay any additional rent for such construction, but that this construction would be demolished when the lessees vacate the said property. Up to the financial year 1960-61, the Karachi Municipal Corporation (hereinafter called the K. M. C.) assessed the said property to Municipal taxes on the basis of the monthly rent of Rs. 893.00. But, on 3rd February 1962, the lessors received a notice from the K. M. C. Intimating to them that the monthly letting value of the said property had been increased to Rs. 7,000.00. The lessors objections to this notice were rejected, and ultimately an order of attachment was made by the K. M. C. To recover Municipal taxes on the basis of the increased monthly letting value of the property in question. Even a notice of auction was served on the lessors in this connection, and they, consequently, paid a sum of Rs. 47,134.12 under protest on 25th July 1964 to avoid auction of the said property. Thereafter, both the lessors and the lessees filed Suit No. 146 of 1964 before the Karachi Bench of the former High Court of West Pakistan for recovery of the amount paid by the lessors to the K. M. C. Under protest. The main contention raised by the respondents in the suit was that increase in the monthly letting value of the property or the re-assessm ent of this value and the consequent increase in the Municipal taxes was made without notice to them and, further, after the repeal of the City of Karachi Municipal Act, 1933, by the Municipal Administration Ordinance, 1960 (Ordinance X of 1960), the K. M. C. Had no power to increase the assessm ent of the monthly letting value of the said property or the Municipal taxes in respect thereof. In defence, the K. M. C. Took the stand that, notwithstanding the repeal of the City of Karachi Municipal Act, 1933, the rules and regulations framed thereunder continued to be operative by reason of section 4(2) of the Municipal Administration Ordinance, 1960, and, this being so, the K. M. C. Was fully competent to re-assess the monthly letting value of the said property and the Municipal taxes thereon. Several issues were raised between the parties. However, the learned Single Judge, whose judgment is impugned in this appeal decreed the respondents' suit.
2. In this appeal, we are required only to decide two questions, that is, (i) whether, on the repeal of the City of Karachi Municipal Act, 1933 and the promulgation of the Municipal Administration Ordinance, 1960, the K. M. C. Was not competent to re-assess the value of the said property and the Municipal taxes thereon, and (ii) whether the re-assessment was made without notice to the respondents, and, if so, what is the effect of such want of notice?
3. On the first question, the learned Single Judge decided the issue against K. M. C., as he took the view that, by reason of the provisions of sections 33 and 41 of the Municipal Administration Ordinance, 1960, the K. M. C. Could not make any increase in the Municipal taxes imposed on the said property, except in accordance with the provisions of these sections. Section 33 of the Ordinance provides that a Municipal Committee, with the previous sanction of the Government, may levy, in the prescribed manner, all or any of the taxes, rates, tolls and fees mentioned in the Third Schedule to the Ordinance. Section 41 provides that all taxes, rate tolls, fees and other charges levied by a Municipal Committee shall be imposed, assessed, leased, compounded, administered, and regulated in such manner as may be provided by rules and, further, the rules framed under section 41 may, among other matters, provide for the obligation of the tax-- payer and the duties and powers of the officials and other agencies responsible for the assessment and collection of taxes. The learned Single Judge interpreted these two sections in the light of section 4(2) of the Ordinance, which reads as follows: "Where an enactment stand repealed under subsection (1) any appointment, rule, regulation, or bye-law made, notification, order or notice issued, tax imposed or assessed, contract entered into, suit instituted or action taken under such enactment shall, so far as it is not inconsistent with the provisions of this Ordinance and the rules, be deemed to have been respectively made, issued, imposed or assessed, entered into, instituted or taken under this Ordinance."
The learned Judge came to the conclusion that the Municipal Administra--petition Ordinance, 1960, saved only such Municipal taxes to which the properties in the city of Karachi were already assessable at the time of the promulgation of this Ordinance, and that any increase in such taxes would be in the nature of new taxes which could not be levied, except in accordance with the requirements of sections 33 and 41 of the Ordinance, and that since no rules had been framed under the Ordinance, as required by section 41, and since the increase in the Municipal taxes imposed on the said property had not received the previous sanction of the Government, the demand of the K. M. C. For payment of Municipal taxes at the increased rate was invalid. In coming to this conclusion, the learned Judge placed reliance on a Lahore decision, The Punjab Association Club v. The Corporation of Lahore (PLD 1963 Lah. 380), which contains the following Observation: "Subsection (1) of section 41 of the Ordinance provides that all taxes, rates, tolls, fees and other charges levied by a Municipal Committee shall be imposed, assessed, leased, compounded, administered and regulated in such manner as may be provided by rules. The position, a therefore, is that from the 1st of May 1960 no officer of the respondent-Corporation had the power to re- assess the property in dispute. It is true that section 4(2) of the Ordinance provides that where an enactment stands repealed under subsection (1), and tax imposed or assessed under such enactment shall, so far as it is not inconsistent with the provisions of the Ordinance and the rules, be deemed to have been imposed merely means that the old assessment of Rs. 2,268.00 was to continue till legally altered,,-and cannot be construed as investing the officers of the respondent- Corporation with a power to carry out a fresh assessment. In fact, until the rules were framed, no fresh assessm ent could have been carried out."
With respect, we find ourselves in disagreement with this view. In our opinion, a distinction should be made between levy of a new tax and increase in, or re-assessment of, an existing Municipal tax.
In the case beforeus, there was no levy of any new Municipal tax on the said property. There was only re-assessm ent of the letting value of this property and the taxes leviable thereon, and therefore sections 33 and 41 would, in our humble view, have no application to the controversy before us. Further, even levy of tax is permissible under the old Municipal Rules if new rules, required to be promulgated under the Municipal Administration Ordinance have not been framed, as power for this purpose is saved by reason of the provisions of section 4(2) of this Ordinance, provided such tax is not inconsistent with the provisions of the Ordinance itself. Section 4(2) expressly saves rules, regulations, bye-laws, notifications, orders or notices issued, tax imposed or assessed, contracts entered into, suits instituted or action taken under the repealed City of Karachi Municipal Act, 1933, and further provides that the rules and regulations framed, and bye-laws, notifications, orders or notices issued, taxes imposed or assessed, etc. Etc., shall be deemed to have been respectively made, issued, imposed or assessed, entered into, instituted or taken under the said Ordinance so far as these are not inconsistent with the provisions of the Ordinance. It has not been shown that the re-assessm ent of the letting value of the said property and the Municipal taxes imposed thereon is in any way inconsistent with this Ordinance. Therefore, the only question which remains is whether this re-assessme nt could be made under the rules, regulations and bye-laws framed under the repealed City of Karachi Municipal Act, 1933. These rules are contained in Schedule VIII and Chapter 2 of this Schedule contained the procedure for the levy of Municipal taxes and the preparation of assessment lists of all buildings and lands in the City of Karachi for this purpose. Rule 7 of Chapter 2 empowered the Chief Officer of the K. M. C. To amend the "assessm ent lists" by inserting the name of any person whose name ought to have been inserted, or by including any land or building which ought to have been included, or by altering the assessm ent of any land or building which had been erroneously valued or assessed through fraud, accident or mistake, or of which the rent had been raised since the date of assessment. At the time the K. M. C. Sought to re-assess the letting value of the property in question and the Municipal taxes imposed thereon, Schedule VIII of the K. M. C. Rules, including Chapter 2 was in force and by reason of the provisions of section 4(2) of the Municipal Administration Ordinance, 1960, the K. M. C. Was competent both to re-assess the letting value as well as the Municipal taxes of the said property. In the view we have taken, that in the absence of new rules required to be framed under the Municipal Administration Ordinance, 1960 power to re-assess the letting value and the Municipal taxes thereon was available to the K. M. C. Under B the Rules framed under the repealed City of Karachi Municipal Act, 1933, we are supported by a Division Bench decision given at Karachi by the former High Court of West Pakistan in Petition No. 285 of 1964 (Zakaria Noor Muhammad v. The Karachi Municipal Corporation), wherein it was expressly held that, in the absence of Rules required to be promulgated under the Municipal Administration Ordinance, 1960, a property could be assessed to Municipal tax under the old Rules, that is, the Rules framed under the City of Karachi Municipal Act, 1933, by reason of the provisions of section 4(2) of the Ordinance. It would appear that the Lahore decision proceeded on the premises that Municipal taxes in the City of Lahore were imposed under the Municipal Act of 1911 continued by the City of Lahore Corporation Act, 1941 and not under any rules framed under these enactments and that since these enactments stood repealed on the coming into force of the Municipal Administration Ordinance, 1960, and section 4(2) of the Ordinance only saved rules, regulations, bye-laws, notifications, orders or notices issued, tax imposed or assessed etc. Etc. And not the main enactment themselves, there could be no re- assessm ent of the property in dispute in that case to increase Municipal taxes in absence of conditions prescribed by sections 33 and 41 of the Ordinance and the rules required to be framed thereunder. But the legal position with regard to the City of Karachi Municipal Act, 1933, would appear to be different. In this Act, section 93 was the charging section or the enabling provision which empowered the K. M. C. To levy Municipal taxes or to assess properties in the City of Karachi to Municipal taxes in accordance with the rules framed under this Act. In actual position, therefore, it is the rules framed under the City of Karachi Municipal Act, 1933, which contained the detailed provisions for levy of Municipal taxes on properties in Karachi by reason of the enabling power contained in section 97 of the Act. Thus, the Lahore case is distinguishable, in that the enactments which were under consideration before their Lordships at Lahore were different from the City of Karachi Municipal Act, 1933. With regard to the City of Karachi, the correct legal position has been brought out in the decision in Petition No. 285 of 1964 (Zakaria Noor Muhammad v. The Karachi Municipal Corporation).
4. However, the respondents are on strong ground in their contention that the re-assessment of the letting value, as also of the Municipal taxes of the said property was made without notice to them.
Mr. Muhammad Muslim Naqvi, learned Advocate for the K. M. C., placed reliance on the K. M. C.
Notice dated 3rd February 1962 (Exh. 5/2), which reads as under: "I have to inform you that the assessment of your above-mentioned plot has been fixed at Rs. 7,000 (seven thousand only) per month on which the Municipal property taxes will be charged. The assess--ment will come into force from 1st July 1961.
Objections to the assessm ent, if any, should be made in writing within one month from the date of receipt of the notice and should state the ground on which the assessment is disputed, failing which the same will be liable to be dismissed."
S. A. H.