1. This judgment shall dispose of Writ Petitions Nos. 1272 of 1996 3014/1996 as both of them have emanated out of the auction of lease rights for the collection of Goods Exit Tax of Zila Council, Narowal, for the period from August 1995 to 30-6-1996.
2. Through Writ Petition No.1272/96 the petitioner has taken exception to the notice issued by the Taxation Officer through Letter No.TOZCN-421, dated 17-8-1995, calling upon him to pay salary and other taxes, to the Zila Council.
3. Through Writ Petition No.3014/1996, the petitioner has taken exception to the notice bearing No.TO.ZCN-976/76, dated 11-2-1996, calling upon him to deposit Rs.12 lacs due towards him.
4. It is the case of the petitioner that he participated in an auction for the grant of lease rights to collect Goods Exit Tax and was the highest bidder for Rs.51 lacs. The auction according to the learned counsel was approved on 16-8-1996 and the petitioner was intimated through notice dated 17-8-1995 in this regard.
5. Learned counsel has taken exception to the impugned notices on the ground that the same have been issued without any legal sanction as the lease would become operative from the date of execution of the agreement and the respondents cannot claim any money for 16 days for which there was no confirmation.
6. Learned Law Officer has controverted the stance and has stated that the petitioner started supervising of collection w.e.f. 1-8-1995 through the staff of Zila Council, as such, the same period has to be included in the lease period.
7. I have considered the contentions. It is admitted and not denied that the formal agreements as required under the law was executed between the petitioner and Zila Council on 17-8-1995. Section 39 of the Punjab Local Government Ordinance 1979 provides:
39. Contract.--(I) All contracts made by or on behalf of a Local Councilshall be--
(a) in writing and expressed to be made in the name of the local council;
(b) executed in such manner as may be prescribed; and
(c) reported to the local council by the Chairman at the meeting next following the execution the contract.
(2) No contract executed otherwise than in conformity with the provision of the section shall be binding on the local council.
8. Similarly sub-rule (5) of Rule 7 of the Punjab Local Council Lease Rules, 1990 provides as under:
(5) A lease shall not become operative unless the lessee enters into an agreement with the Local Council.
9. A reference is also apt to sub-rule (10), rule 16 of tile Punjab, Council Goods Exit Tax which is couched in the following terms:
(10) The successful bidder shall execute a formal deed in favour of the Zila Council the cost of which shall be borne by him containing the terms and conditions of the lease before exercising rights thereunder. "
10. The reading of the aforesaid provisions demonstrate that the execution of the formal agreement is necessary before any party is permitted under the law to embark upon the collection of goods eixt tax. Simply because the supervision of the collection as alleged by the learned Law Officer was given to the petitioner, the same in these circumstances would not clothe the respondent Zila Council with any authority to demand payment from 1-8-1995 particularly so when the learned counsel for the petitioner has totally denied any such supervision. Resultantly, the impugned notices issued by the Taxation Officer are set aside and as the respondents have taken categorical stance that the supervision of goods exit tax was given to the petitioner prior to the execution of the agreement as such in the peculiar circumstances of this case, the matter is remitted back to the Taxation Officer, who shall decide the same by providing full opportunity of hearing to the parties concerned. There shall be no order as to costs.