' This will dispose of Writ Petitions Nos,9120 of 1992, 3615, 1560, 1561, 2355, 2467, 1690, 2151, 1649, 3448, 3730, 3728, 564, 1173, 1713, 2665, 3951, 2837, 2838, 2770 and 4497 of 1993.
2. The common question of law falling for determination in these writ petitions is whether a registering officer acting under the provisions of the Registration Act, 1908, can decline to register a gift deed without payment of the property tax levied under section 137 of the Punjab Local Government Ordinance, 1979. Section 137 of the Punjab Local Government Ordinance, 1979 (to be referred to as the Ordinance) empowers the Local Councils to "levy all or any of the taxes enumerated in the second schedule". Item No,5 of the Schedule, Part III, reads: "Tax on Transfer of Immovable Property". Section 144 of the Ordinance provides: "All taxes and other charges levied by a local council shall be imposed, assessed, leased, compounded, administered and regulated in such manner as may be provided by rules."
' Section 167 of the Ordinance empowers the Government to make rules for carrying out the purposes of the Ordinance. In exercise of that power, the Government has framed the Rules called the Punjab Local Councils (Tax on Transfer of Immovable Property) Rules, 1981. Sub-rule (1) of Rule 4 thereof says: "Where an immovable property is transferred through a registered deed, the tax shall become due as soon as the sale-deed is registered and may be assessed and collected by the taxation officer either directly or through the Registrar or Sub-Registrar concerned if so authorised by the Board of Revenue either by a general or special order."
' Rule 5 provides that the tax shall be paid by the transferor of the property "unless otherwise mutually agreed to between the transferor and the transferee in writing" and Rule 7 empowers the Council to recover the tax assessed under Rule 4 as arrears of land. Revenue. By Rule 8, a right of appeal has been given to a person aggrieved by an order under Rule 4 or Rule 7.
3. All these writ petitions relate to the Municipal Corporation, Faisalabad. Learned counsel for Municipal Corporation, Faisalabad, has placed before me a copy of notification dated 19-8-1991 by which the schedule of the tax on transfer of immovable property was amended and the rate of tax was increased from 2/1-2% of the price of the transferred immovable property to 4% of the said price. In view of this notification, there can be no doubt that the Municipal Corporation, Faisalabad, has levied the tax and that the petitioners are liable to pay it in accordance with the rates mentioned in the notification. Learned counsel for the petitioners, however, argued that Rule 4 of the Punjab Local Councils (Tax on Transfer of Immovable Property) Rules, 1981 (to be called the Rules) applies to the transfers of immovable property by way of sale and not to transfers by way of gift. The learned Additional Advocate-General was fair enough to concede that this is the true legal position. Learned counsel for Municipal Corporation, Faislabad, and its contractors, however, referred to the definition of the expressions "Tax on Transfer of Immovable Property" and argued that the taxes on all transfers of immovable property arc leviable. And therefore, Rule 4 applies to all transfers, including gifts. He sought support for his contention from the words "where an immovable property is transferred through a registered deed" in rule 4 of the Rules.
4. The contention of the petitioner's counsel, supported as it was by the learned Additional Advocate-General, must, in my opinion, succeed. True that in the opening part of Rule 4, namely "where an immovable property is transferred through a registered deed", the words "sale and sale- deed" do not occur but the intention of the Rule-making authority was made clear by the words "the tax shall become due as soon as the sale-deed is registered". For a transfer can be by way of sale, gift, exchange etc. And if the intention were that the Rule will apply to all transfers, then it would have been sufficient to say that "the tax shall be paid as soon as the deed is registered"; in that case it was wholly unnecessary to use the expression "sale-deed". In any case, the Rule being a taxing provision, it has to be strictly construed, that is to say, if it is open to two reasonably possible interpretations then that interpretation which favours the taxpayer has to be adopted. It must follow, therefore, that the Registering Officer acting under the Registration Act, cannot decline to register a deed other than a sale-deed on the basis that the tax under the Ordinance and the Rules has not been paid.
5. I, therefore, accept the petitions and declare that the act of the registering officer declining to register the deeds of gift on the ground that the tax under the Ordinance has not been paid is without lawful authority and of no legal effect. The parties are left to bear their own costs.