JUDGMENT Malik MUHAMMAD qayyum, J.- This petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 has been Filed by Mitchell's Fruit Farms (Pvt.) Ltd. Against Zila Council Okara challenging the authority of the respondent to charge goods exit tax on the goods produced by it in its plant located in Renala Khurd Town which while being exported to other parts of the country pass through the limits of Zila Okara.
2. Mr. Shahid Hamid, learned counsel for the petitioner has maintained that goods exit tax can only be charged on those goods which are manufactured and produced within the limits of Zila Council and not in any urban area. He has referred to the pronouncement of the Supreme Court of Pakistan in Zila Council Jhelum I'. I.C.I. Pakistan Ltd. {Formerly ICI Pakistan Manufacturers Limited) Khewa.
District Jhelum (1993 SCM R 454) and decisions of this Court in Hilal Tanneries Ltd V. Zila Council Gujrat and another (1994 M LD 2366), Id Pakistan Limited is Zila Council, Jhelum (1992) CLC 458) and Writ Petition No.9332 of 1991 decided on 26.9.1995.
3. Another contention raised by the learned counsel for the petitioner is that a direction was issued to the Zila Council Okara by the Provincial Government not to charge goods exit tax on the goods produced by the petitioner. These instructions which are binding upon the Zila Council under section 137 of the Local Government Ordinance, 1979 have been flouted.
4. No one has appeared for the respondent which is proceeded against exparte.
5. There is considerable merit in the contentions raised by the learned counsel for the petitioner. By virtue of section 137 of the Ordinance, 1979, a local council is authorised to levy (fil or any of the taxes mentioned in the second schedule. Section 144 of the Ordinance, 1979 provides that all taxes and other charges levied by a local council shall be imposed, assessed and leased in such manner as may by provided by the rules, In 'he exercise of this power, the Government of Punjab has framed the Punjab Zila Councils (Goods Ext) Tax Rules 1990. According to rule 5 goods exit tax can only be levied by a Zila Council on the goods produced and manufactured within its limits. Earlier there was a provision for charge of tax on goods in transit which remain in the Zila beyond a certain period. However, that power appears to have been taken away by an amendment made in the rules by notification dated 20.2.1992 by which rule 1(a) has been added which reads in the following terms: "(1-A) Notwithstanding contained in this Rule, with affect from the first day of July, 1992-
(a) a Zila Council shall levy and collect the goods exit tax only on the export of goods produced within its limits; and"
As is obvious from the above cited provision, from 1st July, 1992 gods exit tax can only be levied and collected on the export of goods manufactured or produced within the area controlled by the Zilla Council.
6. In the present case, there is no denial that the goods are being produced in the plant of the petitioner located in the urban area controlled by Town Committee Renala Khurd which stands excluded from the Zila. In terms of section 2 (ix) of the Punjab Local Government Ordinance, 1979.
No export tax can, therefore, be charged on the export of these goods No further discussion on the subject need be made in view of the pronouncement of the Supreme Court in Zila Council Jhelum's case supra (1993 SCM R 454) and of this Court in the cases mentioned in para 2 above.
In view of what has been stated above, this petition is allowed and the action of the respondent in recovering goods exit tax on export of goods produced within the limits of Town Committee Renala Khurd is declared to be without lawful authority and of no legal effect. Respondent shall refund the tax received by it from the petitioner.
No order as to costs.