DORAB PATEL, J.-The petitioners in these two petitions have put up advertisement boards, hoardings and neon signs in Karachi and had been paying advertisement tax to the Karachi Municipal Corporation at rates which had been fixed in 1933. About 10 years, ago the then Karachi Municipal Committee had proposed increases m this tax, but before the proposals could be finalized, the Karachi Municipal Committee was dissolved by the 1st respondent (the Sind Government) on 15-6-1971. However as the claim for increase in the said tax was pending, the Commissioner of Karachi issued a notification on 31st December 1971 sanctioning increases in the advertisement tax. Later, a notification was issued by the 1st respondent on 29th June 1972 sanctioning increases in the advertisement tax as specified in the notification. The petitioners thereafter received notices to pay the tax at the enhanced rates fixed in this notification, therefore they have filed these constitutional petitions to challenge the legality of the increase in the rate of tax. These petitions therefore raise the same questions of law and fact and I will dispose them of by this judgment.
2. I have observed earlier that the Karachi Municipal Committee had commenced levying an advertisement tax 40 years ago and the proposal to enhance it was first made by the Chairman of the then Municipal Committee in his budget estimate of 1963-64. By that time the City of Karachi Municipal Act had been repealed by the Municipal Administration Ordinance, section 33 of which reads as follows :- "33. Municipal Taxation.-A Municipal Committee with the previous sanction of the Government, may levy, in the prescribed manner all or any of the taxes, rates, tolls and fees mentioned in the Third Schedule."
Mr. Malik conceded that an advertisement tax fell under the Third Schedule, ,but he referred us to the rule, framed under this section. These are the 'West Pakistan Municipal Committees (Imposition of Taxes) Rules, 1950. As these Rules were in force in 1963, the then Chairman of the Karachi Municipal Committee submitted in accordance with rule 3 of these Rules (to which I shall refer as the said Rules) a proposal in the 1963-64 budget for ,the increase of the advertisement tax. I would however clarify here that the Chairman in his budget report referred to the existing rate of advertise--ment tax as ridiculously low, whilst the proposals about the tax were contained in a note of the Deputy Chief . Officer of the Corporation which was put up with the budget report to the Municipal Committee. The Municipal Committee approved of these proposals by its resolution No. 503 of 26th June 1963, therefore the case was forwarded under sub-rule (3)Of rule I of the said Rules to the Commissioner of Karachi who was -the Controlling Authority. After the Controlling Authority's approval had been received, the Chairman of the Municipal Committee published the proposals as required under rule 4 and invited objections. Mr. Malik admitted that the petitioners had filed objections which were placed before the Sub-Committee appointed under rule 4 of the said Rules. After considering all the objections, the sub-committee submitted its report to the Municipal Committee under rule 5 of the said Rules, and after the Municipal Committee had finalised the proposals, in the exercise of its powers under rule 6, these proposals were again forwarded to the Commissioner. A public notice about the proposed increase in the advertisement tax was again published as required under rule 6.
The Commissioner had thereafter to forward the final proposals of the Karachi Municipal Committee about the increase in the advertisement tax ,to the Provincial Government which was done. And it was for Provincial Government to sanction these proposals, with or without modifications, under rule 7 and to publish the proposals in the Gazette. Unfortunately, the Provincial Government did not take any steps in the matter for many years and meanwhile Martial Law was declared for the second time. The Karachi Municipal Committee, like all other local councils, stood dissolved .Under M. L. O. 21 (later amended and reconstituted as M. L. O. 24). And by a notification dated 15th June 1971, the Provincial Government ,in the exercise of its powers under M. L. O. 21, declared that the functions of Municipal Committee would be performed "by Administrators who shall be those persons who were the Chairmen of the Municipal Committees concerned before their dissolution", therefore the Chairman of the Karachi Municipal Committee became the Administrator, and he continued to press the demand for the increase in the advertisement tax. Mr. Ghous Muhammad referred us in this connection to the Administrator's letter dated 3-11-1971, to the Commissioner of Karachi, and as I have pointed .Out earlier, the Commissioner had sanctioned an increase in the rate of advertisement tax as specified in his notification of 31st December 1971. 'This order however was not implemented, because, according to all the learned counsel, the interested persons, viz. The advertisers of hoardings, neon signs etc. Made representations to the Provincial Government. The Provincial Government therefore again sought the explanation of the Administrator and it Is sufficient to state here that by his letter dated 2-5-1972, the Administrator pressed for the increase in the rate of advertisement tax. This request was, allowed and finally by its notification dated 29th June 1972, the Provincial Government sanctioned from 1-7-1972 revised rates of advertisement tax a& specified in its notification. And it 9s under this notification that the petitioners are required to pay the enhanced rates of advertisement tax.
3. Mr. Malik's principal submission was that the notification of 29th June 1972, was illegal because the Karachi Municipal Committee had violate&, the provisions of the said Rules in making its recommendation in 1963-64 for the increase in the rate of advertisement tax. And in support of this plea-- learned counsel took us through the said Rules in order to show how the --then Karachi Municipal Committee and its Chairman had flouted the said Rules. Thus. For instance, as I have indicated earlier, rule 31 requires, the Chairman of the Municipal Committee to review the financial position of the Corporation and "to formulate taxation proposals . . . . ."
Now I have pointed out earlier that the Chairman in his budget --estimates had only said that the rate of advertisement tax was "ridiculously, low" because it had not been revised for 30 years. And because the: Chairman did not, in his own report to the Municipal Committee, specify the proposed increase in the rates of advertisement tax, Mr. Malik submitted that the provisions of rule 3 had been flouted and therefore the proposals for the increase in tax were illegal and void ab initio. But have pointed out that the concrete proposals for the increase in tax were --contained in the note of the Corporation's Deputy Chief Officer which, was attached to the Chairman's report. And Mr. Ghous Muhammad` pointed out that according to rule 3 the Chairman "shall formulate taxation proposals and incorporate them in an appendix to the budget". Mr. Malik's submission is therefore based on a misconstruction of rule 3. Additionally,. Mr. Malik's submission implies that each and every provision in the said'. Rules is mandatory. This is doubtful, and Mr. Ghous Muhammad's~ submission was that the said Rules were not mandatory but that the Karachi Municipal Committee and its Chairman had in any case complied with them. Both the learned counsel advanced lengthy arguments in support of" their respective submissions, but, as I have pointed out earlier, all Municipal Committees stood dissolved under M. L. O. 21, therefore could the said Rules, which prescribed the manner in which Municipal Committees had to, function, survive the dissolution of Municipal Committees ? Both the learned Assistant Advocate-General and Mr. Ghous Muhammad submitted that the said Rules ceased to be valid after the dissolution of Municipal Committees -- under M. L. O. 21 (later M. L. O. 24), and if this argument is correct it, would not be necessary to examine Mr. Malik's detailed criticism of the --alleged infringements of the said Rules by the Karachi Municipal Committee--and its Chairman. I would therefore first consider this aspect of the case.
4. I have pointed out that M. L. O. 21 was amended and re-constituted as M. L. O.
24. M. L. O. 24 further stated that it "shall be deemed to have come into effect as so reconstituted on the 15th June 1971." Under paragraph 2 of this Order, the competent authority was authorised to, dissolve a local council, and Mr. Malik conceded that the Provincial Government was entitled, under this paragraph, to dissolve the Karachi Municipal Committee and had done so. Now clause (b) of sub- paragraph 4 of this paragraph states :- "(b) the Competent Authority may, in so far as it is necessary to remove any difficulty in the operation of any provision of a Local Governments law on account of such dissolution by notification in the official Gazette, direct that such provision shall have effect subject to suck modification as may be specified in the notification. "
In pursuance of the power thus conferred, the Provincial Government issued a notification on 11th December 1971, which reads as follows :- "NOTIFICATION No. S. O. KDA-14-77/71.-In exercise of the powers conferred by clause (b) of sub-paragraph (4) of paragraph 2 of the Martial Law Order No. 24, reconstituting Martial Law Order No. 21, issued by the Chief Martial Law Administrator, the Government of Sind are pleased to direct that the provisions of section 33 of the Municipal Administration Ordinance, 1960 (Ordinance X of 1960) and the West Pakistan Municipal Committees (Imposition of Taxes) Rules, 1960, in so far as they relate to observance of the manner prescribed for imposition of taxes, shall not apply to the taxes imposed by the Municipal Committees or the period Municipal Committees stand dissolved."
According to Mr. Malik, this notification was ultra vires of the powers of the Provincial Government, because the Provincial Government under M. L. O. 24 could not suspend the said Rules completely but could only modify "any provisions of a Local Government law on account of such dissolution . . . . :' The argument is not quite correct, because the notification does not purport to suspend the said Rules in their entirety but only in so far as they relate to "observance of the manner prescribed foe imposition of taxes" But that is the corollary of the dissolution of Municipal Committees, therefore the real question is whether it can be said that any of the said Rules are not connected with the observance of the manner prescribes) for the imposition of taxes.
5. The first two rules are formal and even Mr. Malik did not rely on them. I have earlier referred to rule 3. This rule requires the Chairman of the Municipal Committee to present a review of the financial position before the Municipal Committee together with his proposals for any change in the tax structure. The Municipal Committee has then to give its decision: on these proposals which are then referred to the Controlling Authority. It cannot possibly be argued that this rule does not relate to the manner prescribed for the imposition of Municipal taxes, therefore I am satisfied that it is no longer in force. The next rule relates to the publication of the preliminary taxation proposals of the Municipal Committee. Mr. Malik half--heartedly submitted that this rule had survived the dissolution of Municipal Committees. But sub-rule (2) of this rule makes it clear that the object of the publication is to invite objections from the persons concerned and these objections are then placed before a sub-committee to be appointed by the Municipal Committee under rule 5. The rule has to be read as a whole, therefore, in my humble opinion, it is not in force at present in view - of the dissolution of Municipal Committees. Rule 5 imposes an obligation on the Municipal Committee to appoint a sub-committee for considering the objeo--tions received, and it prescribes the manner in which this sub-committee u to function. We Invited Mr. Malik to show us how this rule could be in force now, and even Mr. Malik admitted that this rule and rile 6 were no longer in force. However, he submitted that rule 7 was in fame,, therefore I may explain here that this rule prescribes that the proposal of a Municipal Committee, after it has been finalized under rule 6, must be put up for the sanction of the Provincial Government. I have some doubt whether this rule falls within the mischief of the notification of 11th December 1971. However, it is not necessary to decide this point because even if the rule is no longer in force, section 33 itself prescribes that the sanction of the Government is necessary to any imposition of tax, therefore, as the Government's sanction has to be proved in any case, it is not necessary to decide the validity of this rule.
6. The result of this discussion is that except perhaps for rule 7 all the other rules relate to observance of the manner prescribed for imposition of taxes, therefore they are not in force in view of the dissolution of Municipal Committees, and as they are not in force, it is not necessary to consider learned counsel's submissions on the alleged disregard or non-compliance of rules 3 to b by the then Municipal Committee or its Chairman, and the only point which requires examination is whether the increases in the advertisement tax have the approval of the Provincial Government. Mr. Ghous Muhammad rightly pointed out that the notification of 29th June 1972, was the sanction of the Government, but according to Mr. Malik the respondents had also to prove that the Municipality had sought the Government's sanction. Learned counsel conceded that the then Chairman of the Karachi Municipality had sought the requisite sanction but according to him the Administrator was required to move the Provincial Government again for the sanction of the very same proposals.
Assuming for the sake of argument that the Adminis--trator was required to apply again to the Provincial Government for its sanction to the proposals which were before it, Mr. Ghous Muhammad has filed copies of the relevant correspondence which prove that after the dissolu--tion of the Municipal Committee the Administrator had again reagitated the matter with the Provincial Government. Copies of several such letters have been filed, but it will be sufficient to refer to the copy of the Administrator's letter of 2-5-1972. I agree with Mr. Ghous Muhammad that by this letter the Administrator had moved the Provincial Government for sanctioning the proposed increases in the advertisement tax and that sanction was granted by the impugned notification of 29th June 1972. As the power of the Municipality to increase the rates of advertisement tax is not questioned by Mr. Malik, and as the increase has been effected after compliance with of the provisions of law which are now in force, it is clear that the petitioners cannot challenge the validity of the 1st respondent's notification of 29th June 1972, and they are bound to pay taxes as specified in that notification.
7. In the result, the petitions are without merit and are dismissed with costs.
Announced in open Court.
Z. A. CHANNA, J.-I respectfully agree.