' The appellant filed a suit for delaration against the respondent to the effect that imposition and levying of tax on the hotels belonging to the appellant namely Kamran and New Kaman situated within the limits of Rawalpindi Cantonment, is ultra vires, illegal and without jurisdiction mainly on the ground that the Cantonment area being vesting in the Central Government and administered by it, West Pakistan Finance Act, 1969 imposing tax on hotels in the whole of the province would not be applicable to the Cantonment areas ; and the two hotels referred to above being situated within the limits of Rawalpindi Cantonment are immune from the tax levied by the said Act. As a consequential relief the appellant prayed for issuance of perpetual injunction restraining the respondent from recovering any hotel tax from it. The learned trial Court dismissed the suit of the appellant by its judgment and decree dated 2nd of September, 1968, and the findings given by it on issues Nos 2 and 3 have been affirmed while findings on issue No. 1 have been set aside. It has been held that civil Court has no jurisdiction to try the suit.
2. The suit having been resisted by the respondent, as many as three issues were framed on the basis of the pleadings of the parties ; as to whether the jurisdiction of the civil Court is barred to try the instant suit, whether the suit is barred under Article 133 (2) of the Constitution and whether the imposition of hotel tax by West Pakistan Finance Act, 1965, is illegal, without jurisdiction and void, for the reasons given in the plaint.
3. It has been contended by the learned counsel for the appellant while relying upon sections 60, 98 and 282 (14) of Cantonment Act of 1924, sections 18, 19 of Cantonment Rent Restriction Act, 1963 and section 9 of Cantonments (House-Accommodation) Act, 1923, that since the Cantonment area is exclusively administered by the Cantonment Board or suck other authorities under the direct control or supervision of the Central Government, therefore, the provincial legislation i.e. West Pakistan Finance Act, 1965, in relation to tax on hotels will not be applicable to the Cantonment areas which vest in the Centre. Section 60 of the Cantonment Act is with regard to general power of taxation vesting in the Cantonment Board which can Impose any tax in the Cantonment area with the previous sanction of the Central Government. Section 98 of the Cantonment Act authorises a Cantonment Board to make special provision for the cleansing of any factory, hotel, club or group of buildings or lands used for any purpose and may fix a special rate which will be determined by a written agreement with the person liable for the payment of the conservancy tax in respect of such factory, hotel, club or group of buildings. Section 282 (14) of the Act authorises a Cantonment Board to make bye-laws for the purpose of regulation and control of encamping grounds, ponds, washing places, serals, hotels, dak-bungalows, lodging-houses, boarding-houses, etc. Section 18 of Cantonment Rent Restriction Act provides for registration of hotels and lodging houses within a period of two months from the opening thereof with the Controller. Section 19 of the Act authorises the Controller to fix fair rates to be charged for boarding, lodging and other services provided in a hotel or boarding-house, at such amount as having regard to all the circumstances, he deems just.
Section 9 of the Cantonments (House-Accommodation) Act, provides that no house in any Cantonment area would be occupied for the purposes of hospital, school, school hostel, bank, hotel, or shop without the previous sanction of the Officer, Commanding the District gives with the concurrence of the Commissioner. The reproduction of the relevant provisions, as referred to above would show that none of them debars the Provincial Legislature to set out by the Constitution. The West Pakistan Finance Act was promulgated by the West Pakistan Assembly in 1955 whoa 1962- Constitution was in force. Article 131 of the said Constitution provides that the Central Legislature shall have exclusive power to make laws for the whole or any part of Pakistan with respect to any matter enumerated in the Third Schedule, where the national interest of Pakistan, in relation to sesurity of Pakistan, including the economic and financial stability of Pakistan, planning or co- ordination ; or the achievement of uniformity in respect of any matter in different parts of Pakistan, so requires, Article 132 of the Constitution provides that a Provincial Legislature shall have power to make laws for the Province, or any part of the Province, with respect to any matter other than a matter enumerated in the Third Schedule. The Third Schedule of 1962-Constitution deals with the matters with respect to which the Central Legislature has exclusive power to make laws such as Defence of Pakistan and of each part of Pakistan, including the Defence Services of Pakistan, any other armed forces raised or maintained by the Central Government of Pakistan and any other armed forces attached to or operating with any of the armed forces of Pakistan ; military, naval and air force works ; industries connected with defence and the manufacture of arms, firearms, ammunition and explosives ; and cantonment areas including the delimitation of such areas, local self-government in such areas, the constitution of local authorities for such areas and the functions and powers of such authorities and the control of housing accommodation in such areas.
' A careful examination of the relevant provisions of the Third Schedule would show that the Central Legislature is empowered to make laws with regard to Defence of Pakistan and in relation thereto within the cantonment areas as well including the delimitation of such areas local self- government in such areas and the Constitution of local authorities as well as their functions and powers for such areas. Housing accommodation within the cantonment area is also to be controlled by the Central Legislature for the purpose of providing facilities to armed forces personnels.
' The power of Provincial Legislature in making laws even to the extent f levying tax on buildings etc., situated within the cantonment areas has been examined in Khan Umar Khan v. Market Committee, Jhelum and another (1) and Pakistan through the Secretary Ministry of Defence v.
Province of Punjab and others (2). The relevant provisions as contained in the Third Schedule of the Constitution as well as other laws such as Cantonments Act have also been examined. In PLD 1972 the petitioners before the High Court were being prosecuted under rule 294 (9) framed under the Agricultural Produce Markets Act of 1939 for evasion of market fees etc. It was alleged against them that they supplied meat and agricultural produce to the Station Supply Depot, Jhelum Cantonment (to which the market area of Market Committee, Jhelum) bad been extended under an earlier notification but failed to pay the market fees due from them. The petitioners asked for the quashment of the criminal proceedings pending against them mainly on the ground that the notification extending the application of the Act to cantonment areas was bad in law in view of the fact that the Central Government had exclusive powers to legislate with regard to cantonments and the operation of any Provincial Law in those areas was in clear contravention of item i(e) of the Third Schedule read with Article 131 of the Constitution of 1962. It was held that the Central Legislature was empowered to regulate the constitution of Local Authorities for the cantonment areas but that did not mean that these areas are completely closed to the Provincial Legislature for purposes of legislation. There was no radical departure in the Constitution of 1962, from the two previous Constitutional Acts with regard to the law-making powers of the Central Legislature vis-a- vis the cantonment areas. It was also held that the authors of the Constitution could not be attributed the intention of depriving the Provincial Legislature to set up any Local Authority in the cantonment areas in connection with a statute which would validly fall within the ambit of their legislative powers. It was held that the powers to regulate the local self-Government and the constitution of Local Authorities given to the Central Legislature by the Constitution was essentially with reference to Defence of Pakistan and of each part of Pakistan, and as such the regulation of these bodies by the Central Legislature, primarily will be in relation to the Defence of Pakistan or matters incidental or ancillary thereto. In PLD 1975 Supreme Court, as referred to above, the original civil suit was filed by the Government of Pakistan through the Secretary, Ministry of Defence on 19th of May, 1958, in the Supreme Court of Pakistan against the Province of West Pakistan ander Article 156 of the Constitution of 1956, for declaration to the effect that the Cantonment Boards and the lands in the Cantonments vested in the Government of Pakistan and recorded as such in the Central Land Revenue registers, were not liable and had at no time been liable to pay any tax under the West Pakistan Urban Immovable Property Tax Act, 1958, or under the corresponding provisions of the earlier Provincial Urban Immovable Property Tax Act repealed by section 24 of the West Pakistan Urban Immovable Property Tax Act, 1958. A further declaration was sought to the effect that taxes, if any, hitherto realised by the Provincial Government from any of the Cantonment Boards or in respect of land vested in the Government of Pakistan and recorded as such in the General Land registers maintained by the Cantonment Boards, were realised illegally and were refundable to the Government of Pakistan or the Cantonment Boards, as the case may be.
' The averments as made in the plaint by the Central Government mere
(1) PLD 1972 Lab. 497 (2) PLD 1975 SC 37 repudiated by Province of West Pakistan and after dissolution of One Unit by respective provinces.
The Central Government's contention before the Supreme Court was that a tax imposed by a Provincial Government could not be levied on lands and buildings situated in cantonment areas, since such lands and buildings vested in the Central Government and the Cantonment Boards were merely administrative bodies ' In support of this contention, reliance was placed upon historical origin of cantonments in British India. It was said that cantonment areas were created as areas set apart exclusively for the use of troops, and their needs and requirements, either by the acquisition of land on payment of compensation to the original holders or by right of conquest or by appropriation or by treaty with the Ruling Chiefs. In the absence of any clear proof to the contrary, the ownership of all the lands within cantonment limits had always been presumed to vest in the Crown and now in the Central Government. After having examined all pros and cons of the case it was held by the Supreme Court that since the tax on lands and buildings was specifically mentioned in the Provincial Legislative list as a separate item of legislation, legislation in respect of taxes on lands and buildings came within the competence of the Provincial Legislature and the law so made would apply to any part of the Province making the law, unless the area sought to be excluded had been specifically exempted under the law or under any constitutional provision. It was found that there was no provision in any law or constitution showing that a cantonment area was not to be included within the territorial limits of a Province in which it was situated. It was found that in such circumstances claim of the Central Government that all lands and buildings included in the cantonment area were exempt from payment of the Urban Immovable Property Tax imposed by the Provincial Legislature was not tenable. It was observed that exemption given by the Constitution to the property of the Central Government was of course available but as to what was the property of the Central Government was to be decided in each and every case with reference to the relevant documents. If any property belonging to the Central Government had been handed over to the Cantonment Board or otherwise leased out to it then the same would be entitled to the exemption granted by the Constitution as being property vesting in the Central Government. It was also observed that merely the fact that the property was situated in the cantonment area did not however, make it a property of the Central Government.
4. It has been argued by the learned counsel for the appellant with reference to PLD 1975 Supreme Court that since the tax in the present case has been levied on income which is exclusive subject of the Centre, therefore, the legislation in this behalf being invalid and void, cannot be operative. I am afraid this contention has no force.
5. A careful perusal of section 12 of West Pakistan Finance Act, 1965 shows that the tax has not been imposed upon income but on lodging units, irrespective of the fact whether they are occupied or not. In the case of list class hotel Rs. 1 per day per lodging unit is liable to be paid as tax while in the case of 2nd class hotel 50 paisa per day per lodging unit is to be paid as tax. It has been provided in subsection (3) of the section that amount of tax will be worked out and assessed on the basis of the total number of !Edging units available in the hotel irrespective of the fact whether a lodging unit is actually occupied or not. If the tax had been imposed upon income of the hotel then the same would have been made basis of the tax. This is not the position here. It has been unposed upon the basis lodging units whether occupied or not. As in the case of a property whether occupied or not tax has to be paid by its owner, in accordance with law. The tax in question may be called an additional tax on the property. The building of a hotel which is already liable to be taxed under the Property Tax Act, its owner or management thereof, has been further burdened to pay tax of one rupee per day per lodging unit. It cannot be a tax on the income of hotel. As such the Provincial Legislature was competent to levy such tax which was not on income.
The above discussion would show that Rawalpindi Cantonment being part of Punjab and the tax in question being not on income or in relation to Defence matters as enumerated in para. 1 of the Third Schedule, the Provincial Legislation levying tax on hotels is valid.
6. Issue No. I with regard to jurisdiction of the civil Court was decided in favour of the appellant by the learned trial Court but the finding in this behalf has been set aside by the learned lower appellate Court. The learned District Judge has concluded that since the appellant has prayed for setting aside or modifying the assessment of tax, therefore, under para. 15 of the Finance Act, its suit is barred. I have gone through the contents of the plaint. The tenor thereof shows that imposition of tax on hotels in Rawalpindi Cantonment area has been challenged on the ground that Cantonments being administered by the Central Government, the Provincial tax cannot be imposed upon buildings there. Both the Courts below have also held the suit is barred under Article 133(2) of the Constitution as according to them the appellant has questioned the jurisdiction of the Provincial Legislature to impose the present tax. The title of the suit as well as the prayer made in the plaint do not show that jurisdiction of the Provincial Legislature has been questioned to pass the Finance Act, whereas on the contrary levying of tax on hotels situated in Cantonment area under the Finance Act, has been challenged. It does not mean that jurisdiction of the Provincial Legislature or otherwise vires of the Finance Act itself have been challenged. The contents of para. 5 of the plaint as referred to by the learned trial Court in this behalf cannot be read in isolation of the other averments particularly the prayer made by the appellant.. It has been tried to be conveyed again and again that since the cantonment area is not administered by the Provincial Government, therefore, the Provincial Tax would not be levied upon the buildings situated in the said area. According to law the appellant is competent to challenge the right of the Provincial Government functionaries to levy tax on hotels or buildings, as the case may be, situated within the cantonment limits. In this view of the matter the finding of the learned lower appellate Court on issue No. 1 and of both the Courts below on issue No. 2 cannot be maintained and they are hereby set aside.
7. Since issue No. 3 has been found against the appellant, therefore, the suit fails. Consequently the appeal having no force is hereby dismissed without any order as to costs.