' NASIR ASLAM ZAHID, J.--The petitioner is an Octroi Contractor for the Union Council Makli, District Thatta, for the Cement Naka Post for the year 1990-91, from 1-7-1990 to 30-6-1991. The octroi tax is payable under the provisions of the Sindh Local Government Ordinance, 1979. Respondent No.3 had imported machinery for installation and use within the territorial limits of Union Council, Makli, the respondent No.2 herein. When the machinery was brought on 19-1-1991 at the octroi barrier of which the petitioner is the Controller, the concerned staff of the barrier assessed the octroi payable on the machinery at Rs.3,75,282. The machinery was allowed to be taken past the barrier on the delivery of a post-dated cheque for the aforesaid amount. The cheque was later on dishonoured but the main question that has been raised in this petition is about the validity of a Notification dated 14-5-1990 of the Government of Sindh, Housing Town Planning Local Government and Rural Development Department, which is to the following effect:-- "With the approval of the competent authority Government of Sindh are pleased to exempt from payment of octroi, the machinery/equipment and construction material meant to be used for new Industrial Units to be set up in rural areas with effect from Ist May, 1990 in exercise of the powers conferred under Rule 137 read with Item No.11 of Appendix 'C' of the Municipal Committees Octroi Rules, 1964."
' According to respondent No.3, under the Sindh Local Government Ordinance' and the Octroi Rules of 1964, which are in force, the Sindh Government is empowered to exempt any goods from payment of octroi tax. In this petition, the said Notification dated 14-5-1990 has been challenged as illegal and having been issued without lawful authority and a further prayer is made that respondent No.3 is liable to pay octroi as the said notification is illegal. We have heard Mr.G.H.
Abbasi, learned counsel for the petitioner and Mr.G.M. Paryani, advocate for respondent No.3. Mr. K.M. Nadeem, learned A.A.-G. Did not address any argument and same is the position of Mr. Khalid Dawood Pota, who left the matter to be decided on the basis of the submissions made by the learned counsel for the petitioner and respondent No.3.
2. Learned counsel for the petitioner has relied upon a judgment of the Supreme Court in Civil Appeal No.39-K of 1984 dated 8-11-1989 in which a similar question had arisen with a difference that in that matter there was no notification for exemption but there was a letter of the Government addressed to the Deputy Commissioner of the area stating that the controlling authority had decided that the Union Council should not impose octroi duty on the construction material and machinery imported by the management of the appellant in that appeal till the project being set up by the appellant was completed and had started production and, on the basis of the said letter, the Chairman of the Union Council had stopped the contractor from collecting octroi duty from the appellant and to challenge the legality of the said direction, the Octroi Controller filed a Constitutional petition in this Court which was allowed. The matter was taken to the Supreme Court and by the aforesaid judgment dated 8-11-1989 the appeal was dismissed. The Supreme Court observed as follows:-- "4. Section 60(1) Sindh Local Government Ordinance (XII of 1979) enables a Local Council to levy all or any taxes, rates, tolls and fees mentioned in Schedule V to the Ordinance. Item No.5 in para. III, of the said Schedule would cover octroi duty as well. Under section 62, the Provincial Government exercises control over the taxation powers of local council. It reads as follows:--
(1) Government may direct any council--
(a) to levy any tax, rate, toll or fee which the council is competent or levy under this Ordinance;
(b) to increase or reduce any rate tax, toll or fee to such extent as may be specified;
(c) to suspend or abolish the levy of any tax, rate, toll or fee.
(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.
' In view of the provision of clause (c) of subsection (1), the Government has undoubtedly the power to suspend or abolish the levy of any tax. But in this particular case, as will be noticed, the Government has not suspended or abolished the levy of octroi duty as such imposed by respondent No.5 within its limits. All that the letter of the Deputy Director states is that the octroi duty may not be "imposed" on the material brought by the appellant in the area of the Union Council for the construction of its factory. This is thus a case of granting exemption from, payment of the duty and not one of suspension of the duty. In fact in its application to the Deputy Commissioner the appellant had not asked for the suspension of the octroi duty but had merely sought exemption from the payment thereof.
' The words 'suspension' and 'exemption' have entirely different connotations. In Black's Law Dictionary Fifth Edition, the word `suspension' has been translated as a temporary stop, a temporaty delay, interruption, or cessation whereas the word 'exemption' has been explained to mean freedom from a general duty or service, immunity from a general duty or service, immunity from a general burden, tax, or charge, immunity from certain legal obligations or the payment of taxes. In other words, when a tax is suspended its very incidence is oft in abeyance whereas when exemption is granted, the incidence of the tax remains unaffected but the liability created thereunder is not enforced. Now there is no provision in the Ordinance which reserved the power of granting exemption to the Government. The High Court was therefore, right in taking the view that the Government was not competent to direct respondent No.5 not to impose octroi duty on the material brought within its limits by the appellant for the construction of its factory."
3. The Supreme Court has held that there is no provision in the Sindh Local Government Ordinance, 1979, which reserves the powers of granting exemption to the Government. Mr.G.H. Abbasi, relying upon the aforesaid judgment of the Supreme Court, has contended that the notification granting exemption from the payment of octroi tax is illegal.
4. Mr.G.M. Paryani, learned counsel for respondent No.3 has raised the following preliminary objections:-
(a) The petition is incompetent.
(b) Disputed questions of facts are involved and as such this petition is not the proper remedy.
(c) The petitioner has come with unclean hands to the Court and is not entitled to any relief under the constitutional jurisdiction of this Court.
(d) Respondent No.3 has filed a suit relating to the amount claimed by the petitioner.
(e) It is a contractual dispute and the petitioner should seek his remedyfrom the Civil Court.
(f) The judgment of the Supreme Court relied upon by Mr.G.H. Abbasi, does not lay down any principle and has only decided a dispute in that . Appeal where different facts were involved.
According to the learned counsel, the judgment of the Supreme Court is distinguishable.
' On merits it was contended that, under Rule 137 of Octroi Rules, 1964, exemption can be granted and under section 105(1) of the Sindh Local Government Ordinance, 1979, all rules and bye-laws under the Ordinance are deemed to form part of the Ordinance and, therefore, Rule 137 is a part of the 1979 Ordinance, under which exemption can be granted.
5. We find no merit in any of the submissions advanced on behalf of the respondent No.3. The point raised in this constitutional petition is about the vires of the Notification dated 14-5-1990. For deciding this question, no enquiry into any facts is called for. Pendency of the suit filed by respondent No.3 is no bar to the filing of the present constitutional petition as in this petition vires of the aforesaid Notification has been challenged. The petition is not liable to be dismissed on the ground that it relates to contractual liability. As observed, vires of the Notification dated 14-5-1990 is involved in this petition. There is also no substance in the submission about the petitioner coming to this Court with unclean hands.
6. As regards the submission that the judgment of the Supreme Court in Civil Appeal No.39-K/84 (State Cement Corporation v. Abdullah & Co.) does not decide any question of law and is distinguishable and is not relevant to the point raised in this petition, it may be observed that the question of law relating to the powers of the Government of Sindh under the Sindh Local Government Ordinance, 1979, to exempt any goods from payment of octroi tax, 'was decided in the aforesaid judgment of the Supreme Court and in our view the principle laid down applies to the present case. In the present case also, the question is about the powers of the Sindh Government to exempt any goods from payment of octroi tax.
7. As regards the contention based on section 105(1) of the Sindh Local Government Ordinance, 1979 it may be submitted that despite section 105(1) which provides that all rules and bye-laws under the Ordinance, are deemed to form part of the Ordinance, any rule made under the Ordinance which is in conflict with the provisions of the Ordinance will be invalid. It may be added here that reliance on behalf of respondent No.3 has been made on! Rule 137 of the Municipal Committees Octroi Rules, 1964 which, according to the learned counsel, are deemed to have been continued under section 120(2) of the 1979 Ordinance. Under the aforesaid provisions, rules or bye- laws made under any of the provisions of repealed enactment shall, if not inconsistent with the provisions of the 1979 Ordinance, continue in force and be deemed to have been made or issued under the Ordinance. Rule 137 of the Municipal Committees Octroi Rules, 1964 cannot be relied upon for according validity to the impugned Notification dated 14-5-1990 as under the provisions of the Ordinance, exemption from payment of octroi tax cannot be given.
8. As a result this Constitutional petition is allowed and the impugned Notification dated 14-5-1990 of the Sindh Government is declared to have been issued without lawful authority and to be of no legal effect and as such reliance could not be placed on the said Notification by respondent No.3 for claiming exemption from payment of octroi tax.
' There will be no order as to costs.