' This judgment shall dispose of Writ Petition No,639 of 1995 and Writ Petition No,813 of 1996 as they involve identical questions of law.
2. The petitioner-company in Writ Petition No,639 of 1995 has called in question a Notification dated 14-7-1994 issued by the Zila Council, Chakwal through its Administrator whereby the "Goods Exit Tax" on lime stone was increased from Re.1 to Rs,1.50 per Quintal vide item No,22 thereof. Earlier, the Zila Council, Chakwal, had by a notification fixed the "Goods Exit Tax" on lime stone at Re.1 per Quintal with effect from 1-7-1985 to which the petitioner-company had no objection and had been paying the tax accordingly and it did not challenge the same.
3. In Writ Petition No,813 of 1996, the petitioners Messrs Murree Brewery Company Limited and another have called in question the validity of the levy of Export Tax by the Zila Council, Rawalpindi, by its notification dated 2-6-1995 at the rate of Rs,125 per Quintal on Alcohol, Sharab, Her Qisam, Whisky, Wine, etc with effect from 1.7-1995. Earlier, the Zila Council, Rawalpindi, by its notification dated 29.6-1992 had fixed the Export Tax on these items at Rs,20 per Quintal which had never been challenged by the petitioner and they had been making the payment of the tax accordingly to the Zila Council, Rawalpindi,
4. The learned counsel for the petitioners in both the writ petitions have contended that by Notification dated 24-4-1990, the Government of Punjab had fixed the "Goods Exit Tax" (Export Tax) at the rate of Re.0,30 per Quintal for the lime stone and at the rate of Rs,10 per Quintal on Alcohol of all types. The notification of the Government, it was argued had been issued under sections 137, 139 and 157 of the Punjab Local Government Ordinance, 1979 read with the Punjab Local Councils (Taxation) Rules, 1980 and the Put Zila Councils (Export Tax) Rules, 1990. It was submitted that once a particular rate of tax had been fixed by the Government in exercise of its statutory powers, the Me could not be increased by a Zila Council under the law. They placed reliance on the judgment in the case of Zila Council, Sheikhupura through its Chairman v. Messrs Mian Tyre & Rubber Co. (Pvt.)
Ltd., Lahore Cantt. And others PLD 1994 SC 212 wherein it was held that the levy of Export Tax by a Zila Council at variance with the directive of the Government was without lawful authority and of no legal effect.
5. The learned counsel for the respondents have contended that the power of levy a tax by a Zila Council was available under sections 137, 138 and 144 read with the Punjab Local Council (Taxation)
Rules, 1980 and the Punjab Zila Councils (Export Tax) Rules, 1990 independently of the power of the Government to issue directions to the Zila Councils. The power available to the Zila Councils was not taken away or whittled down by any notification of the Government. The learned counsel also argued that the judgment of the Hon'ble Supreme Court in the case of M/s. Mian Tyre & Rubber Co.
(supra) had been rendered per incuriam inasmuch as the relevant provisions of the law had not been brought to the notice of their Lordships. Moreover, according to the learned counsel, the judgment was confined only to the levy of Export Tax with regard to the controversy of item wise/piecewise basis on the basis of gross weight. They further contended that the writ petition under Article 199 of the Constitution at the instance of the petitioners was not competent as the remedies of appeal and revision had been provided for under Rules 14 and 15 of the Punjab Zila Councils (Export Tax) Rules, 1990. They relied on the cases of Flour Mills Association v. Province of Punjab 1994 M LD 2094 and Dr. Muhammad Sadiq v. Zila Council, Khanewal through Chairman 1994 M LD 1354 in support of their contentions. They also pressed into service the judgment of this Court in the case of Messrs Ibrahim Woods Works Qila Didar Singh, District Gujranwala through its Proprietor v. Government of the Punjab through Secretary Local Government and Rural Development Department Punjab, Lahore and 3 others 1992 M LD 1421 in support of their contention that the model schedule of taxation issued by the Punjab Government under Rule 10 of the Punjab Local Councils (Taxation) Rules, 1980, was of no binding effect on the Zila Councils being of advisory in nature. It was further pointed out that an earlier Writ Petition No,1352 of 1994 filed by the writ petitioner in Writ Petition No,639 of 1995 had been dismissed as withdrawn on 15-5-1995 for the purpose of availing the alternate remedy of appeal. It was further pointed out that the petitioner in Writ Petition No,639 of 1995 has also filed a civil suit in the learned Civil Court of Chakwal which is pending adjudication.
6. I have heard the arguments of the learned counsel for the parties. There is no cavil with the learned counsel for the parties that the power to levy the tax by a Zila Council is exercisable independently of the Government. However, the question involved herein is a different one and that is whether a Zila Council can act contrary to a direction of the Government regarding the rate of tax issued by the Government in the exercise of its statutory powers. A Zila Council is bound by section 137 of the aforesaid Ordinance to levy all or any of the taxes enumerated in the second schedule of the Ordinance in accordance with the directions of the Government. Similarly, by section 139 of the Ordinance, the Government has the power to direct a Local Council to levy any tax, to increase or reduce any such tax or to suspend or abolish the levy of any such tax. By section 144 of the Ordinance, the tax and other charges levied by a Local Council including a Zila Council are to be imposed and assessed in accordance with the procedure provided by the Rules made by the Government. There is yet another plenary power under section 157 of the Ordinance vested in the Government to direct any Local Council or Committee or any person or authority responsible theieto to take such action as may be necessary for carrying out the purposes of the Ordinance.
Rule 10 of the Punjab Local Councils (Taxation) Rules, 1980, also empowers the Government to frame model tax schedule and the Chairmen of the Local Councils are bound to be guided by such schedule in framing the taxation proposals. The Government of the Punjab had notified the levy of taxes with the rates prescribed by it in order to achieve uniformity in all the Zila Councils. In the absence of such a policy of uniform taxation, serious complications would have arisen, if each Zila Council had started levying different rates of taxation in a discriminatory and arbitrary manner. The contention of the learned counsel for the respondents that the Government was powerless to give a direction to the Zila Councils to fix particular rates of Export Tax of various items is a fallacy in law.
The second schedule being a part of section 137 of the Ordinance does not expressly provide for rates of a tax to be levied by a Local Council. In my opinion, the power to levy a tax includes the power to fix the rate of the tax and to provide for necessary machinery for assessment, collection and recovery thereof. See the case of Khyerbari Tea Co. Ltd. And another v. State of Assam and others AIR 1964 SC 925. Once the power of the Government to issue a direction to a Zila Council to levy and Import and Export Tax by a particular rate has been validly exercised, the Zila Council is not authorised to act contrary to such direction. Even otherwise the law presumes as having been done which ought to have been done by the Zila Council. There is no reason for the Court to give a premium to a Zila Council to continue to defy a direction of the Government validly issued to it and leave the parties to wait for such time as the Government itself chooses to enforce the direction so given by it. The interpretation in the matter of a tax if doubtful has to be given in favour of the subject and against the Government. It has been held by this Court in the case of Qamar-uz- Zaman v. Zila Council, Bahawalpur through Chairman, Zila Council, Bahawalpur and 3 others 1990 M LD 1748 that where a statute imposes a tax or professes to levy a charge, such statute is to be given a narrow construction and to be made strictly within letter of the law. Neither equitable construction nor principles of beneficial construction can be invoked in the cases of taxation. A Zila Council is at liberty to levy a tax at a rate of lesser than the one which is fixed by the Government !
But in the presence of a direction by the Government, a Zila Council may not be competent to levy the tax at the rates higher than those fixed by the Government. I see no reason to distinguish the judgment in the case of M/s. Mian Tyre & Rubber Co. (supra) which is binding on this Court. The general instructions issued by the Government by its letter dated 14-5-1994 to the Zila Councils to review and rationalize their tax schedules would be covered only those taxes which were levied by the Zila Councils themselves in the absence of any such levy on the direction of the Government.
7. As to the question of availability of the other alternate remedy, suffice it to rely on the cases of Nagina Silk Mill, Lyallpur v. The Income Tax Officer, A-Ward, Lyallpur and another PLD 1963 SC 322; Malik Muhammad Sarwar and others v. Town Committee, Chak Jhumra 1997 CLC 485 (DB) and Salahud-Din v. Frontier Sugar Mills PLD 1975 SC 244, it is exercise of the Constitutional jurisdiction in the peculiar circumstances of this case is proper.
8. In this view of the matter, both the writ petitions are accepted with no order as to costs. The impugned notifications issued by the Zila Councils are set aside prospectively. The petitioners shall continue to pay the Export Tax at the rates fixed by the Zila Councils and in force immediately before the issuance of the impugned notifications by the Zila Councils.