' In this Constitutional petition the petitioner has prayed for a direction to respondents Nos.2 to 4 not to charge/levy export tax or exit tax on the flour produced by the petitioner and other flour mills.
2. The facts forming the background of this Constitutional petition are that respondent No,1 in exercise of powers conferred upon it under sections 144, 167 and 137 read with Item No,(vii) of Part II, Second Schedule of the Punjab Local Government Ordinance (VI of 1979) made Punjab Zila Council (Export Tax) Rules, 1990. Rule 2 (e) authorises the Provincial Government to enforce through notification Export Tax Schedule for Zila Council. Through Notification No,SOV-5-26/89 dated 13th August 1990 the Provincial Government issued Model Export Tax Schedule in which various items/goods were mentioned on which Zila Council was directed to charge/levy Export Tax at the rates mentioned against each item. In this Schedule wheat, flour, Maidah, Suji and all kinds of oil were included on which the Export Tax was required to be levied/charged at the rate of Re.1 per quintal i.e. 100 k.g. Through Notification No,SOV-5-26/89 dated 26-6-1990, flour and Maidah were deleted from the said Schedule.
3. The case of the petitioner as argued by his learned counsel was that with the deletion of these two items from the said Schedule Zila Council was left with no power to charge/levy export/ exit tax on flour produced by it and the other Flour Mills.
4. Mr.Tassadaq Hussain Jillani, the learned Additional Advocate-General has filed the comments and appeared at limine stage to assist the Court on Court's call. In order to appreciate the arguments raised by the learned counsel for the petitioner it is necessary to examine various relevant provisions of Punjab Local Government Ordinance, 1979, in order to ascertain whether a Zila Council is not empowered to levy/charge export tax on any items/goods not mentioned , in the Schedule issued by . the Provincial Government under the aforementioned rules framed by it.
Section 137 is 'charging section which lays down that 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. Part II of the Second Schedule provides various kinds of taxes which a Zila Council can levy and charge. Item No,7 of this Schedule provides that a Zila Council can levy tax for the export of goods and animals from the Zila. Section 139 of the Ordinance confers powers on the Provincial Government without any limit to direct a local council to levy any tax, to increase or reduce any such tax or the assessm ent thereof to such extent as may be specified; or to suspend or abolish the levy of any such tax. According to Section 144 all taxes and other charges levied by a local council are required to be done in such manner as may be provided by the rules. Under section 167 of the Ordinance, the Provincial Government has the power to make rules for carrying out the purposes of the Ordinance whereas section 168 empowers a local council to make bye- laws not inconsistent with the Ordinance and the rules framed thereunder to carry out the purposes of the Ordinance. The legal effect of all these provisions of law, rules, and regulations if read together is that the local council in its discretion has the power to levy or charge any of the taxes mentioned in Part II of the Schedule, item No,7 of which authorises it to charge export/exit tax on goods and animals after complying with the procedure and formalities prescribed under the rules.
5. It is in addition to the said power vested in the local council to levy such tax that the Provincial Government may also direct a local council under sections 137 and 139 of the Ordinance, to levy any tax, increase or reduce any such tax or suspend and abolish the levy of any such tax. In case the Provincial Government issues a direction to the local council in exercise of powers derivable from these provisions of the Ordinance the local council has no option but to carry out the direction and impose and levy such tax. As is manifest from the express provision of section 139 of the Ordinance that after issuance of such direction for imposition and levy of any tax the Government has been further empowered to increase, reduce, suspend or abolish the same. The expression "such" is significant from which it is clear that the Government has the power to direct to abolish, reduce or suspend only that tax regarding which it had already issued direction and not that tax which a local council in its discretionary power opts to levy or charge. Since the manner in which such taxes either in pursuance of direction by the Provincial Government or by the local council in exercise of its own powers are to be imposed or levied is to be provided by the rules, therefore, the Schedule of export tax notified under the aforementioned Punjab Zila Council (Export Tax) Rules, 1990, providing imposition of export tax on specified items can be construed to be a direction issued by the Government under sections 137 and 139 to the Zila Council which originally provided levy of export tax on flour produced by Flour Mills which item was subsequently deleted in exercise of its powers under section 139(e), therefore, the export tax on the said item was neither imposed or levied nor abolished by Zila Council in exercise of its own power, as such, its abolition by the Government could not have the effect of depriving the local council of its power to levy or charge export tax on flour under section 137 which can neither be abridged nor limited by the Provincial Government. A Zila Council is not deprived of its power to levy any tax as provided in Part II of Schedule Second merely because the Provincial Government has not either issued any direction under sections 137 and 139 to impose or levy such tax or after having issued such direction for levying any tax on specific item, abolished the same.
6. For the foregoing reasons it is held that the Zila Council was empowered to levy/charge export tax on flour and this being so, the remedy of the petitioner against the levy and imposition of the said tax is to challenge the same in accordance with the provisions of the Ordinance and the rules on merits on any of the grounds available under the law if its case was that the said tax was not imposed or levied after compliance with the legal formalities or was not otherwise justifiable. The writ petition is held to have no force, therefore, the same is dismissed in limine.