MALIK MUHAMMAD QAYYUM, J.- This judgment shall dispose of W.P.Nos. 7187,7188 and 7189 of 1994 in which the same controversy is involved.
2. These petitions under Article 199 of the Coastitution of Islamic Republic of Pakistan, 1973 which have been filed by Punjab Small Industries Corporation, an autonomous body constituted under the Punjab Small Industries Ordinance (XVIH of 1972) challenge the right of the respondents to recover tax under Income Tax Ordinance, 1979 on its part of the Provincial Government and its income was exempt from payment of any tax under Article 165 of the Constitution of Islamic Republic of Pakistan, 1973.
3. Mr. Imtiaz Javed, learned counsel for the petitioner has elaborated that Punjab Small Industries Corporation is performing Governmental functions and is for all intent and purpose a part of the Provincial Govemment and is not liable to pay income tax in view of Article 165 of the Constitution.
In support of this submission, the leamed counsel has referred to Punjab Rules of Business framed pursuant to Article 139 of the Constitution particularly definitions of "attached department" and "autonomous body" appearing in rule 2(ii) and rule 2(iii) and Schedule 1 to the Rules. Leamed counsel also emphasized that Punjab Small Industries Corporation was in fact carrying on various functions which under Schedule II of the Rules of Business are to be performed by the Government which makes it to be a department of the Govemment.
4. Mr.Muhammad Ilyas Khan, learned counsel for the respondent, on the other hand, has pointed out that by virtue of Section 3 of the Punjab Small Industries Corporation Act, 1973 the petitioner is a body corporate having an entity separate and distinct from the Provincial Government. It was emphasized that in face of Article 164-A of the Constitution there was no warrant for the argument that no tax on the income of the petitioner corporation could be levied/recovered.
5. The contentions raised by the learned counsel for the petitioner have no force and proceed on clear misconception of law. His insistence that notwithstanding Section 3(2) of Punjab Small Industries Corporation Act, 1973, the petitioner should be treated as a department of the Provincial Govemment and not a body corporate negated by the plain language of the said provision which is as follows:-"(2) The Corporation shall be a body corporate,, shall have the power to acquire and hold property, both movable and immovable, subject to the provisions of this Act and shall have perpetual succession and a common seal and shall by the same name sue and be sued."
6. Furthermore, on a reading of the Punjab Small Industries Corporation Act, 1973 as a whole, it becomes abondantly dear that the petitioner is a corporation set up. Established and controlled by the Provindal Govemment and cannot, by any stretch of imagination, claim either to be a part of the Provindal Government or one of its department.
7. According to Section 2(c) of Punjab Small Industries Corporation Act,1973,"Corporation" means the Punjab Small Industries Corporation established under the Act while Government has separately been defined in clause (f) as meaning Government of Punjab Section 4 of the Act provides that administration and management of the Corporation shall vest in a board to be set up by the Government, the composition of whereof is provided in Section 5. Section 28 of the Act ordains that the corporation shall be deemed to be a bank for the purposes of the Banker's Books Evidence Act, 1891. A reference to Chapter IV particularly section 29 would show that the funds of the Corporation are to be kept separately from the funds of the Provincial Government and in fad grants from the Government are one of the sources for generation of the fund. Under Section 31 of the Ad, custody of the funds and property of the petitioner vests in the corporation itself and not the Government.
8. It follows from cumulative reading of various provisions of the Act,that the petitioner is an entitly having a corporate status separate and distinct from the Provincial Government and is not a part of it. Even if the contention of the learned counsel for the petitioner that the corporation is invested with power to carry out certain functions which Government itself can also perform is accepted, it would hardly advance his case, for there is no warrant for the assumption that performance of these functions would turn a statutory corporation into a Department of the Government.
9. In Pakistan Through The Secretary. Ministry of Defence Vs. Province . Of Punjab and others (PLD 1975 SC 37) wherein a question arose as to whether the property belonging to Cantonment Board can be deemed to be the Property of the Central Government. The answer to this question was rendered in the negative by the Supreme Court which held that the Cantonment Board being a local body was not a part of the Central Government and the property belonging to it cannot be said to be the property of the Government itself. In Lahore Development Authority and others Vs. Abdul Shafiq and others (1992 PLC 1214), it was held that Lahore Development Authority which has the status of body corporate having perpetual succession and a common seal is a separate and distinct entity set up by the Provincial Government under Section 4(2) of the Lahore Development Authority Act, 1975 and was not a part of the Govemment itself.
10. The Rules of Business of the Provincial Government referred to by the learned counsel for the petitioner have no relevance so far as the determination of the status of the petitioner is concerned nor are these rules of any help to the petitioner. On the other hand, the Rules themselves recognize the distinction between an autonomous body and attached department of the Government.
According to rule 2(iii) "autonomous body" means a bodymentioned in Column 4 of Schedule-I; while-Department" has been separately defined in rule 2(ix) as meaning a self-contained Administrative unit in the Secretariat responsible for the conduct of business of Government in a distinct and specified sphere, and declared as such by the Government." Column 4 of Schedule I at Item No. 17 mentions the Punjab Small Industries Corporation as an autonomous body and not as attached Department of the Government.
11. Be that as it may the argument of the learned counsel for the petitioner cannot be accepted for an equally, if not more weighty reason which is that the Constitution itself draws distinction between the income of the Government and that of a corporation set up by or under any law or a corporation or other body owned or controlled directly or indirectly by the Government. In the Constitution as originally framed Article 165 ordains that no tax can be levied by the Federal Government on any property or income of the Provincial Government. However, later on, doubts arose as to whether the incope of a corporation owned and controlled by the Government or set up by it under Act of Legislature can be deemed to be the income of the Government within the meaning of Article 165 of the Constitution. In order to remove these doubts, the Constitution was amended by Constitution (Amendment) Ordinance (P.O.Ll) 1985 and Article 165-A was added which reads as under: "(165-A. Power of Majlis-e-Shoora (Parliament) to impose tax on the income of certain coprations etc-(1) For the removal of doubt, it is hereby declared that (Majlis-e-Shoora (Parliament) has, and shall be deemed always to have had, the power to make a law to provide for the. Levy and recovery of a tax on the income of a corporation, company of other body or institution established by or under a Federal law or a Provincial law or an existing law or a corporation, company or other body or institution owned or controlled, either directly or indirectly by the Federal Government or a Provincial Government, regardless of the ultimate destination of such income".
If the argument of the learned counsel for the petitioner is accepted, it would render the amendment made in the Constitution futile and redundant.
In this view of the matter, this petition is found to be without any merit and is dismissed, leaving the parties to bear their own costs.