' The petitioner, through this Constitutional petition, has impugned the notification dated 24-4-1990 issued by the respondent No,1 whereby a new Schedule of Export Tax for the Zila Councils in the Punjab was enforced.
2. The petitioner is a private limited company and running flour mills. The grievance of the petitioner is that the respondent No,1 has imposed Export Tax throughout in the Punjab vide impugned notification which came into force on-the 1st of July, 1990. The petition was admitted to regular hearing and notices were issued to the respondents but in spite of service they elected not to appear. Therefore, they were proceeded ex parte.
3. The learned counsel for the petitioner, in support of the petition, argued that the Government cannot impose the tax itself. The same can only be imposed by the Local Council after complying with the procedure as given in the Punjab Local Government Act. It is maintained that in the present case the Export Tax was imposed by the Government itself. Therefore, it is illegal. The learned counsel in this behalf has referred to sections 137, 138 and 139 of the Punjab Local Government Ordinance, 1979 (hereinafter to be referred to as the Ordinance of 1979). The arguments are summed up with the submission that any tax imposed in violation of the procedure prescribed in the Ordinance of 1979 is liable to be struck down. Learned counsel for the petitioner, in this behalf, has referred to Rauf Trading Company Limited v. Faisalabad Municipal Corporation (1990 CLC 1732) and Muhammad Jafar Tarar v. District Magistrate, Gujranwala (1990 CLC 281).
4. I have given my anxious consideration to the arguments of the learned counsel for the petitioner and gone through the relevant provisions of law and precedent cases. The fate of this petition depends on the interpretation of sections 137, 138 and 139 of the Ordinance of 1979. The same read as under:- "137. Tax to be levied.--A local council subject to the provisions of any other law may, and if directed by Government, shall levy all or any of the taxes enumerated in the second schedule.
138. Notification and enforcement of taxes.--(1) All taxes levied by a local council shall be notified and shall, unless otherwise directed by Government, be subject to previous publication.
(2) Where a tax is levied or modified the local council shall specify the date for the enforcement thereof and such tax or the modification shall come into force on such date.
139. Increase and decrease in tax.--(1) Government may direct a local council.--
(a) to levy any tax;
(b) to increase or reduce any such tax or the assessment thereof to such extent as may be specified; or
(c) to suspend or abolish the levy of any such tax.
(2) If a direction issued under subsection (1) is not complied with within the specified time, if any, Government may make an order giving effect to the direction."
' It is clear from section 137 that tax is to be levied by the local council of its own or if directed by the Government. When the move is from the council itself then it is within its discretion to levy a tax or not. When the direction comes from the Government then it is bound. It is very clear that taxes can only be imposed which are mentioned in the Second Schedule to the Ordinance of 1979. While section 138 deals with the procedure to be followed by local council in respect of imposition of taxes. This covers the tax both issued suo motu as well as at the behest of the Government.
However, the Government may dispense with previous publication of such taxes. Then comes section 139 of the Ordinance of 1979 which deals with the powers of the Government vis-a-vis imposition of taxes by a local council. The direction can be:-
(i) to levy any tax as noted in section 137;
(ii) to increase or reduce any such tax or assessment to the extent specified;
(iii) to suspend or abolish the levy of such tax.
' The Government has been further empowered under subsection (2) of section 139 to implement its directions if the same are not complied with by the local council within the specified time. In such eventuality the directions will be followed by an order.
' Reverting back to the case in hand. The admitted position is that the tax has not been imposed by the Zila Council respondent No,2. Therefore, the cases referred to by the learned counsel for the petitioner as to procedure are not relevant. Now coming to the other aspect whether the Government could levy the tax or not. There is nothing on the record or even in the notification to suggest that since the local council has failed to abide by the direction issued by respondent No,1, therefore, this order is being issued. This is even not possible in the given circumstances because the tax has been imposed in respect of all the Zila Councils in the Province. Therefore, the Government has over-stepped its jurisdiction. The Export Tax imposed vide Item No,3 on wheat, flour, Maida, Suji, and oil of all kinds is, therefore, illegal.
5. The result is that this petition is allowed with no order as to costs. The respondents are restrained from recovering any Export Tax from the petitioner in respect of wheat, flour, Maida and Suji.