MALIK MUHAMMAD QAYYUM, J.- This judgment shall dispose of Writ Petitions No. 14976/93, 3915/93, 4408/93, 5079/93, 5080/93, 5081/93, 5082/93, 5445/93, 6340/93, 13928/93, 13929/93, 13930/93, 13931/93, 13932/93, 13933/93, 13934/93, 13935/93, 14267/93, 14525/93, 15266/93, 15267/93, 15268/93, 15217/93, 15218/93 and 15774/93 in which common questions of law arise for determination.
2. The petitioners in all these cases are companies registered under the Companies Ordinance, 1984 having fixed assets or more than Rs. 50.00 millions. They feeling aggrieved of the imposition of Federal Education Fee by section 15 of the Finance Act, 1992 have filed these petitions under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973. The impugned provision reads advantageous ? The impugned provision which as under:- "15. Federal Education Fee.- (1) There shall be levied and collected Federal Education Fee from every company as defined in the Companies Ordinance, 1984 (XLVII of 1984) whose fixed assets as shown in its balance sheet made on or after the thirtieth day of June, 1992 are valued more them fifty million rupees at such rates and in such manner and from such date as may be specified in a scheme notified by the Federal Government in the official Gazette.
(2) No fee under sub-section (1) shall be payable by a Company specified in column (1) of the table below, if it has set up or sets up, manages and runs educational institution specified in column (2) of that table within such period as may be notified in the scheme referred to in sub- section (1).
TABLE Type of Company Education Institution 1 2
(a) Where the value of all fixed assets is more that Rs. 50 million but less than Rs. 100 million. Middle School
(b) Where the value of all fixed assets is more than Rs. 100 million but not more than Rs. 250 million.
High School
(c) Where the value of all fixed assets is more than Rs. 250 million. Technical Education School.
(3) The Federal Government may, by notification in the official Gazette make rules for carrying out the purposes of this section".
3. The arguments in these petitions were led in main by Mr. Imtiaz R. Siddiqui, Advocate. Some additional submissions as will be presently noted were also made by the other counsel. The grounds of attack raised by the learned counsel were as follows:-
(i) That the Federal Legislature has no authority to legislate on the subject of adult education nor can it levy any fee or tax in this respect as its power to do so is restricted to the matters falling either in the Federal or the concurrent list given in the 4th Schedule to the Constitution of Islamic Republic of Pakistan, 1973.
(ii) That in law a fee can only be levied in lieu and for the services rendered and not as a part of general revenue. It was maintained by the learned counsel that in the present cases the levy does not even purport to be for any services to be rendered either to the petitioners or to the Industries to which they belong.
(iii) That the fee in question has been levied by enacting a 'money bill' in violation of Article 103 of the Constitution and as section 15 of the Finance Act, 1992 has not been placed before the Senate, it is of no legal effect.
4. In reply, Mr. Faqir Muhammad Khokhar, Deputy Attorney-General has argued the case with great skill and industry and has in the first instance, submitted that there is a presumption arising under the law as to the constitutionality of every Statute and all efforts must be made to uphold it as far as possible. Reliance in this respect was placed by the learned Deputy Attorney- General on Mehreen Zaibun Nisa Vs. Land Commissioner, Multan and others (PLD 1975 S.C. 397).
5. It was next argued that the Federal Legislature has the power to levy any fee for educational purposes. The learned Deputy Attorney-General in this respect pointed out that according to well established principle of interpretation, the entries in the legislative list should be given as broad and wide meaning as possible. He cited upon the Province of East Pakistan etc. Siraj ul Haq Patwari & another (PLD 1966 S.C. 854), M/s. Sh. Abdur Rahim etc. Vs. Federation of Pakistan etc. (PLD 1988 SC 670) Suhail Jute Mills Ltd. Etc. Vs. Federation of Pakistan through Secretary Ministry of Finance & others (PLD 1991 S.C. 329) and Govt, of NWFP through Secretary Agriculture etc. Vs. Rahim Ullah others (1992 SCM R 750) in support of this proposition.
6. In the last, the learned Deputy Attorney-General relying upon Sind Glass Industries Ltd. Vs. Chief Controller of Import & Export, Islamabad and two others (1990 CLC 638) disputes the proposition that the fee can only be levied for services rendered but he submitted that the levy can also be for the purpose of raising the revenue.
7. The first question which arises is as to the competence of the Federal Legislature to levy the Federal Education Fee. There cannot be any cavil with the argument of the learned Deputy Attorney-General that the Courts should make all efforts to uphold the validity of an enactment and further that while interpreting the legislative list as broad a meaning as possible to the words used there, should be given and the entries should not be read in a narrow or pedentic sense. It is also well established that the entries do not confer the legislative power but merely point out broad fields in which those legislative powers must be exercised. The ratio in all the cases cited by the learned Deputy Attorney General is to the above effect. It has also been held that it is the pith and substance of the legislation which should be seen while determining the competency of the legislature to legislate on a particular subject. With this back-ground the provisions of the impugned legislation may now be examined.
8. On the face of it, Section 15 of the Finance Act, 1992, provides for a levy of a fee which is to be known as Federal Education Fee from certain specified classes of companies. As is self evident, the fee in question is being levied for educational purposes. This position is further clarified by sub- section (2) which states that in case the companies have set up educational institutions like Middle Schools, High Schools, no fee shall be payable by them. In elaboration of this provision the Government has promulgated Federal Education Fee Scheme under the Finance Act, 1992, para 7 of which provides that the fee in question shall be used exclusively for the establishment/management of Schools specified in the Scheme. The specification of the Schools has been given in para 4 of the Scheme which are of three kinds, Middle School, High School and Technical School. Similar provision exists in the Federal Education Fee Rules, 1992 which contains details about the establishment as also the equipments which the Schools are required to possess.
9. A reference to the Federal and Concurrent Legislative Lists, in the 4th Schedule to the Constitution shows that "education" as such is not one of the subjects mentioned therein nor could any such entry be pointed out by the learned Deputy Attorney-General. The only entries which maybe of some relevance in this respect are those which contained in Items No. 16 & 17 of the Federal Legislative List and Item No. 38 of the Concurrent Legislative List. But so far as entry in item No. 16 is concerned, it relates to Federal Educational Institutions for the purpose of research for professional or Technical training or for promotion of special studies which is not the object for which the fee in question has been levied as it does not provide or cater any research nor does it contemplate setting up of any institution for this purpose. The entry at serial No. 17 is restricted to education of Pakistani students abroad or foreign students in Pakistan while the entries at serial No. 38 provide for legislation in respect of syllabus, planning policy, centres of excellence and standards of education.
10. The Supreme Court of Pakistan while construing the scope of these entries was pleased to observe in Sohail Jute Mills Ltd. And others V. Federation of Pakistan through Secretary, Ministry of Finance and others (PLD 1991 S.C. 329) that these entries do not cover the field of adult literacy.
Thus there is no escape but to hi Id that even on broadest possible interpretation of various entries, the Federal Legislature had acted in excess of its authority in levying a fee for the purpose of general education.
11. There is qually force in the second contention of the petitioners' learned counsel that fee can only be levied for services rendered and it cannot be imposed with a view to enhance the general revenue of the State. I am unable to agree with the learned Deputy Attorney-General that without rendering any services, fe e can be levied by the Government, for, that would amount to taxation.
It is unnecessary to refer to various authorities cited by the learned counsel for the parties on the subject as the distinction between the fee and tax is well known. To reiterate, however, it may be stated that the main distinction lies in the fact that while tax is compulsory exaction of money for the purpose of running the affairs of the State as a part of general revenue, fee though compulsorily recoverable is for services rendered either to the individual or a class or a section of Society to which he belongs. It is true that in many cases it has been held that the benefit accruing to the individual may not be immediate or even mediate but still a condition precedent for such a levy is that there must be some co-relations even if remote between the services rendered and the person from whom the fee is sought to be recovered. It may not be necessary that the amount of levy should commensurate with the exact expenditure but reasonable proximation is enough.
Another view taken is that even though the individual himself may not be deriving any direct benefit but if the services are being rendered to a part of the Industry to which he belongs, the levy would be valid. However, some element of quid pro qua must be there.
12. The impugned levy i.e. Federal Education Fee when examined in the above context is clearly not sustainable as no services are even contemplated to be rendered to the petitioners or to the industry to which they belong. There is nothing in the Act, the Rules or the Scheme to show that the Schools or the Educational Institutions are sought to be set up or are meant to provide for the educational needs of the Company, their employees or workmen. Consequently there is not even a remote or indirect nexus between the services sought to be rendered and the petitioners.
13. It may further be stated that the validity of this provision was also impugned on the ground that it suffers from excessive delegation. However, I am unable to agree with the learned counsel that while enacting section 15, the Legislature itself has provided for the levy, leaving the details to be worked out by the Rules making Authority. But there is merit in the connected and ancillary argument of the learned counsel for the petitioners that the rate on which fee has been levied is unreasonable and arbitrary in nature. According to rule 2 of the Scheme as notified on 16.2.1993, the fee is to be worked out on the basis of the valuation of the total assets of the Company, which, in my view, cannot be made the basis for such a charge. The valuation of the assets held by a Company may not have any relevance or connection with the actual income being derived by it.
There may be cases where the Company may be owning lands, buildings and even factories which are lying closed and are not yielding any income or the Companies may be running in loss. To make a demand for payment of fee from such concerns irrespective of their income would be highly unreasonable.
In view of what has been stated above, all these petitions succeed and the levy of Federal Education Fee is declared to be without any lawful authority and of no legal effect. No order as to costs.