SAAD SAOOD JAN, J.---These are to petitions for special leave to appeal from the judgment of the Lahore High Court, whereby in exercise of the Constitutional jurisdiction it declared the memorandum issued by the Board of Revenue on 29-10-1991 to be illegal and without lawful authority.
2. The petitioners in Civil Petition No.1101-L of 1996 are the Administrator and the Taxation Officer of the Municipal Corporation, Faisalabad. The Corporation levies the tax on the transfer of immovable property falling within its limits. The Corporation has, through public auction, given the right to collect the tax to the petitioner in Civil Petition No.579-L of 1996. The tax is collected in accordance with the Punjab Local Councils (Tax on Transfer of Immovable Properties) Rules, 1981, hereinafter called the Rules. Rule 3 of these Rules states as under:- "3. Levy of Tax:--(1) A local council may or where the Government so directs shall levy a tax on the transfer of immovable property situated within its limits.
(2) The rate of the tax shall be such as may be fixed and notified by Government from the to the as a percentage of the amount of consideration of transfer of property.
Explanation:--For the purpose of this rule 'consideration' means the price paid for the transfer of the immovable property and where no price is paid the market value as assessed by the authority competent to collect the tax."
Rule 4(1) of the Rules provides for the assessment and collection of tax in respect of the property which has been transferred through a registered deed. It states: "(1) Where an immovable property is transferred through a registered deed, the tax shall become due as soon as the sale deed is registered and may be assessed and collected by the taxation officer either directly or through the Registrar or Sub-Registrar concerned if so authorized by the Board of Revenue either by a general or special order. "
On 29-10-199, the Board of Revenue issued a memorandum inter alia to all, District Registrars appointed under the Registration Act. The memorandum was in the following terms:- "It has been brought to the notice of Board of Revenue, Punjab, that the tax relating to Municipal Committee on the transfer of immovable property through registered deed is not paid and deposited into their account on the late the Sub-Registrar register the document. As such the Municipal Committee suffers loss of its revenue.
You are accordingly requested that the Sub-Registrars should be bound to register any document of immovable property only if receipts of all the taxes including the Baldia tax are attached with the documents. "
In accordance with the memorandum the registration officers insist on the production of the receipt showing payment of the tax before registering a document.
3. Respondent No. 1 in Civil Petition No.579 of 1996 filed a Constitution petition in the High Court challenging the legality of this memorandum on the ground that in accordance with Rule 4(1), (ibid), the tax became payable only on registration of the deed and that it could not be demanded before the said event; thus the direction given to the registration officer in the memorandum was illegal The High Court found merit in this contention and declared the memorandum to be without lawful authority and of no legal effect. In these to... Petitions the legality of the view has been challenged.
4.In support of these petitions it is contended that there was a large-scale evasion of the tax, for after getting the document registered the parties would disappear, thus, making the recovery of the tax an extremely tedious affair. Consequently, the contractor who purchased the right to collect the tax suffered from considerable loss. The memorandum issued, by the Board of Revenue was intended to remedy this situation and for that reason the High Court was not right in holding it to be illegal or without lawful authority.
5. The contentions raised in support of these petitions need examination. Leave to appeal is accordingly granted.
6. The operation .Of the impugned judgment will remain suspended during the pendency of the appeals.