' The petitioner is the owner of an urban immovable property (No, S. E.-6. R-16-A, Aflame Iqbal Road, Lahore). He is aggrieved by the following order dated 8-5-1970 communicated to him by the Director, Excise and Taxation, Lahore : "With the approval of the Commissioner, Lahore as embodied in his order sated 4-5-1970, the gross annual rental value of the property Unit No, S. E-6 R, 16 A, Lahore Rating Area II, all owned by Mr. Culzar Ahnsad is enhanced from Rs, 3,600 to Rs, 1,44,000 wit: effect 1-1-1969."
2. The background in which such an order came to be passed is briefly as follows. Originally this property was assessed to property tax on the basis of a monthly rent of Rs, 100 (Rs, 1,200 annual gross) with effect from 1-7-66 Soon thereafter the Assessing Authority in exercise of powers possessed by it under section 9, clause (c), sub-clause (10 of Urban Immovable Property Tax Act, 1958 thereinafter referred to as the Act) enhanced the gross annual rental value from 1203 to 3600 with effect from 1-7-67. The Administrator, Lahore Municipal Corporation addressed on 28-2-1970 the Director, Excise and Taxation informing him that this property was rented out to the Electricity Department on a monthly rent of Rs, 12,000 with effect from 1-11-68. He suggested that "the annual rental value of the property may be enhanced from the date it has been let out and a copy of the order may be sent to this office for further action". The Director got a local enquiry conducted through the Excise and Taxation Officer who submitted a factual report also indicating at the end that "the owner of the property was required to explain why the assessment of P. U. No, SE-6R16-A may not be referred to the Commissioner, Lahore Division for enhancement under section 10 (2) of the West Pakistan Urban Immovable Property Tax Act, 1958 who has filed an application which is also enclosed in original for your information." On receipt of this report the Director personally heard the petitioner on 23-4-1970. And moved the Commissioner recommending "The assessment may be allowed to he revision as proposed above." The Commissioner on 4.5-70 recorded "yes".
The impugned order thereafter issued.
3. There are three grounds taken up by the learned counsel for the petitioner for challenging this order. Firstly, it is contended that provisions of subsection (2) of section 10 of the Act were not at all available, on the facts of this case, for enhancing the assessment. Secondly, the Commissioner even if competent to pass such an order afforded no opportunity to the petitioner of hearing or showing cause against the order that came to be passed. Thirdly, the department& practice itself prohibited enhancement of the assessment as the ground, as in this case, that subsequent to the general assessm ent the property was let out at a higher rent.
4. The Commissioner, is a statutory functionary under the Act. His powers have been thfined in subsection (2), section 10 of the Act as follows :- "10.-(2) The Commissioner or such other Officer as may be appointed by the Government by notification in this behalf, may of his own motion at any time, or on application made within a period of one year from the date of the taking of any proceedings or passing of any order by an authority subordinate to the Commissioner call for and examine the record of the proceedings or the order for the purpose of satisfying himself as to the legality or propriety of the same and may pass such order in reference thereto as he may consider fit,"
5. The power of the Commissioner, under this section is to review, and if necessary, to interfere with the proceedings taken, or orders passed by the departmental officers. He can therefore substitute his own view for that of the departmental officers, on the ground of legality or propriety. This power, however, does not extend to taking into consideration, facts and events coming into existence efter the proceedings were taken or order passed by the departmental officer, with a view not to substitute those proceedings or orders ab inido but to pass an altogether different order having effect from a date subsequent to those proceedings or orders. The order of the Commissioner mentions no facts or grounds for passing the impugned order. The notes preceding it contain three facts which could possibly, with the Commissioner form the basis for passing the impugned order.
The first is that a property reassessed at Rs, 3,600 (gross per annum) for the period 1966-1970 was actually let out on 1.11-68 at the gross annual rent of Rs, 1,44,000 to a Government Department.
Secondly, that certain internal alterations had to be carried out by the owner to suit the peculiar requirements of the Department, which in turn enhanced its value. Thirdly, the Commissioner, alone was competent to enhance its rental value. These facts, more than anything else, make it clear that the assessm ent or the reassessment made in 1966 or 1967 was not in issue. Its legality or propriety was not examined. It was left intact till 31-12-68. On facts coming into existence long after reassessm ent in 1967 a fresh order was passed by the Commissioner. He took into consideration events which had come into existence near about November 1968,
6. A general assessm ent made under section 7 of the Act ordinarily remains in force until it is superseded by a new valuation list. The exceptions are provided in sections 9 and 10. Any alteration in the building such as may necessitate enhancement of the assessment, has been specifically provided for in section 9, chose (c), sub-clause (ii) and the statutory authority empowered in that behalf is the Assessing Authority and not the Commissioner. It is clear therefore that any variation in the actual rent received during the period of general assessment cannot be made the basis for revising the assessm ent or enhancing it unless of course the very first assessment is found to be defective either in law or on the ground of propriety.
7. Coming now to the departmental practice, the petitioner has submitted a circular from the Board of Revenue to all Commissioners and departmental officers. It specifically deals with the situation in hand. The Director, Excise and Taxation, Rawalpindi by his letter dated 23rd January 1970 posed the problem as follows :- "Your attention is invited to the instructions contained in sub-para. (4) of para. 4.6 (a) of the Punjab Tax Manual, Vol. II, Part I. According to these instructions, the Annual Value once determined in respect of a property unit is not to be amended on the ground of fluctuation in rent under section 9 of the Property Tax Act.
' Section 10 (2) of the Act, however, provides that Commissioner in a case may pass such order as he considers fit. Of late, there have been a number of cases in which the Annual Value has been amended under section 10 (2) merely on account of enhancement in the rent, after the fivey-early assessm ent had been once finalized."
' The reply sent by the Board of Revenue on 5th September 1970 was as follows :- "The instructions on the subject incorporated into the Punjab Tax Manual and referred to by you should be adhered to.
2. It may be reiterated that:--
(I) Current valuation cannot be amended in order to bring it into accord with existing circumstances on the ground of fluctuations in rent of the property concerned, without any change of the type mentioned in column of section 9 of the Act.
(ii) The valuation of a property is not based on the rent actually derived from it, but specifically on the rent at which such property may reasonably be expected to be let out from year to year, Le., a hypothetical or assumed figure, which if unchallenged at the proper stage, becomes the definitive figure and remains so for five years subject to the other provisions of the Act."
8. It therefore follows, that the first and the third ground taken up by the learned counsel for the petitioner prevail. In a case where the power of the Commissioner to invoke section 10 (2) itself was lacking there could possibly be no question of a duty to hear the petitioner in the matter. Hence, this petition is allowed with costs and the impugned order is declared to be without lawful authority and of no legal effect.