' TARIQ PERVEZ, J.--The petitioner company is duly incorporated and registered under the provisions of Companies Ordinance XLVII of 1984 with certificate of incorporation and has its own articles and memorandum of Association, under which Mr. Tariq Mahmood Chaudhri Deputy Manager (Admn.) has been duly authorised to present this petition.
2. The Federal Government of Pakistan, in order to promote different Industrialists, throughout the country, and to gear up process of industrialization, extended number of incentives to those who were interested in installing industries in the limits of Hattar Industrial Estate, of which the petitioner is one of such companies.
3. The petitioner company after being installed in the said estate, commenced the production of medical syrups with effect from 9-2-1989 and herbal medicines etc. From 30-4-1989.
4. The petitioner company was given an undertaking by the Federal Government that all items produced by the company will be free of charge of all taxes for a period of 5 years from the date of commencement of its production. This fact has been acknowledged by letter dated 13-7-1994 from Chief Officer, District Council, Haripur to the Deputy Manager (Admn.), Qarshi Industries (Pvt.) Ltd., Hattar Haripur. According to the letter exemption period allowed by the Government to the company was to expire on 8-2-1994 and 29-4-1994, respectively.
5. On 27-4-1992, the Provincial Government issued a notification bearing No, DS-III(LCB)5055/92 exercising powers conferred on it under section 135 of N.-W.F.P. Local Government Ordinance, 1979 hereinafter referred to as Ordinance through which all the District Councils in N.-W.F.P. Were directed to adopt and enforce the export tax schedule (given under the notification) with effect from 1-7-1992. The Schedule tax was to remain in force for the period of 3 years.
6. In the Schedule, under the title of items, export tax was chargeable on Item No,27 which is given as 'Soft Drinks I e Coke'. Similarly, under Item 55 of the Schedule, 'Herbs, Zeera white for medicines' were also subject to export tax at the rate given in column No,3 of the Schedule referred to above.
7. There is long history of the litigation between the petitioner company and the respondents. First, the petitioner company filed a petition before the Chief Officer/Taxation Officer claiming the refund of all taxes levied on the products of the petitioner company, but the prayer was rejected on 13-7- 1993. Against the' said order appeal was filed under the "Ordinance" before the Director-General who returned the same to the petitioner company for filing it before the Administrator/Chairman, District Council, as under the rules, an appeal from the order of tax clerk lies to the Taxation Officer, from the order of Taxation Officer to the Chairman/Administrator and if original order is passed by the Chairman/Administrator then the appeal lies to the Director-General.
' While returning the appeal, the Director-General, however, granted interim stay to the petitioner company. The order of the Director-General was challenged by the District Council by filing a writ petition bearing No,37 of 1995 and in the meantime the petitioner company filed an appeal before the Administrator. Pending writ petition the Administrator withdrew the order of interim stay granted by the Director-General hence the writ petition became infructuous and was withdrawn.
8. The petitioner once again filed an appeal before the Director-General Local Government who once again granted stay on 11-6-1995, but on the same day the Secretary, Local Government, N.- W.F.P. Vide order of even date suspended the operation of the order passed by the Director- General.
9. The petitioner assailed the order of the Secretary, Local Government by filing a writ petition and a D.B. Of this Court on 12-9-1995 set aside the order of the Secretary, Local Government and directed the Director-General to decide the appeal pending before it. The order of this Court was challenged through C.P.L.A. No,592 of 1995 by Secretary, Local Government by filing a petition before the Supreme Court of Pakistan and on 18-11-1995 the Honourable Judge of the Supreme Court was pleased to pass the following order:-- "I am not inclined to suspend the judgment of the High Court. However, I would direct respondent No,1 to dispose of the above appeal within 15 days from the date of this order. It will be open to the petitioner to urge before respondent No,1 as to the competency of above appeal."
10. In view of judgment of this Court and observations made by the august Supreme Court of Pakistan, the Director General heard the case of the petitioner and rejected the appeal on 19-12- 1995.
11. To understand, the purpose of above litigations it is worth mentioning that the petitioner company took 4 grounds in their appeal before the Director-General and the same have been agitated before us while arguing the writ petition.
12. The contentions of the learned counsel for the petitioner are to the effect:--
(a) that the products of the petitioner company are neither covered by Item 27 nor by Item 55 of the Model schedule;
(b) that the Provincial Government under the "Ordinance", is not empowered to levy export tax and it is only the District Council which can do the same but in accordance with law;
(c) that in case of exemption of tax/levy of the export duty, no tax is recoverable unless the same has been notified in official Gazette.
(d) that even if conceded for the sake of arguments that the notification dated 27-5-1992 was lawful and valid it was to take effect from 1-7-1992 and has expired by the efflux of time as period fixed was 3 years.
13. In support of his contentions, the learned counsel submitted that the Model Schedule issued on 27-5-1992 which was enforceable from 1-7-1992 at Serial No,27 only soft drink i,e, Coke has been made subject of export tax and that they are producing 'Jam-e-Sherin' which is not covered within the purview of 'soft drink' as the same cannot be taken directly. It has to be taken after mixing water in it and hence is not a soft drink in itself. As for Item No,55 of the Model Schedule is concerned that covers herbs, Zeera, white for medicines. It was submitted that the petitioner company is not producing herbs, or Zeera and in fact they are using herbs for their products which are syrups and are used in medicines. It was argued that being medicinal syrup, are not covered by the word 'herb'.
14. In support of the contentions that the Provincial Government cannot levy export tax reference was made to sections 134, 135, 136 and 138 of the "Ordinance," including a reference to N.-W.F.P.
District Council (Export Tax) Rules, 1984. It was argued that under section 134, it is the Local Council which can impose/levy any tax and, or if directed by the Government shall levy the tax as enumerated in the 2nd Schedule. Under section 136 Government can frame tax Schedule and when such Schedule has been framed by the Government District Council shall be guided by the Schedule in levying tax. It was therefore, argued that there is no power vested in the Provincial Government to impose or levy export tax directly.
15. Learned counsel appearing for the petitioner next argued that section 172, empowers the Provincial Government to make rules for carrying out the purposes of the "Ordinance" and that rules were framed for the imposition of tax in the year 1980 known as N.-W.F.P. Local Council (Imposition of Tax) Rules, 1980 and N.-W.F.P. Local Council (Export Tax) Rules, 1984. Learned counsel referred to rule 7 of Imposition of Tax Rules, 1980 which is reproduced as below:-- "The taxation proposal sanctioned under these rules shall be notified in the Official Gazette and shall come into force on or with effect from such date subsequent to the issue of the notification as may be specified in the notification."
' He also referred to Export Tax Rules, 1984 and read definition of "Export Tax Schedule" as given under the rules. The purpose of taking us through the aforesaid rules was to show that in both the rules there is a prerequisite before a tax is charged; that the same be notified in the Official Gazette, hence it was submitted that as the Model Schedule Export Tax imposed through notification dated 27-5-1992 enforceable from 1-7-1992 carries no legal sanctity being not published in the Official Gazette, as such not chargeable.
16. The last argument of the learned counsel for the petitioner was that even if for the sake of arguments the notification dated 27-5-1992 is accepted to be a legal document its life was 3 years.
It was submitted that after the expiry of 3 years the notification has outlived its life.
17. Learned counsel for the respondents vehemently opposed the above arguments. It was argued that once the Provincial Government issued notification and Model Schedule for imposition of export tax, the notification by itself is sufficient and does not require official publication in the Gazette. It was further argued that the power is vested both in the Provincial Government and in the District Council to impose a tax, but in the latter case the District Council is to do it on the instructions of Provincial Government. It was also argued that notwithstanding, the power of Provincial Government to directly levy the tax or direct the District Council to enforce the recovery of tax as directed by the Provincial Government the District Council independently can charge/impose Export Tax.
18. Learned counsel for the respondents while meeting the argument as to the life of the notification dated 27-5-1992 referred to another letter bearing No,DS-111(LCI3)5-55/95, dated 27-5-1992, this letter, it was argued to be a covering letter to the notification under discussion. It was argued that according to sub-para. (1) of this letter the life of notification is unlimited unless withdrawn or rescinded before the expiration of 3 years. It was argued that the only bar on the District Council or the Provincial Government was that the Model Schedule cannot be amended within a period of 3 years. Next, it was contended that the rate of tax if not modified within period of 3 years then it will continue forever.
19. Referring to the 'production' of the petitioner company, it was argued that they are covered within the purview of items given at Serial Nos.27 and 55. In this behalf reference was made to the sub-heading of the Model Schedule which is 'clause 3--Desi medicine'. Learned counsel also referred to a letter issued by Deputy Secretary, Local Council bearing No, AO 11(LCB)9- 85/89/Vol. II, dated 28-3-1996 wherein it was clarified as under: "It is hereby clarified that the soft drinks mentioned at Item No,27 of the aforesaid Export Tax Schedule includes all kinds of soft drinks and syrups etc. Similarly herbs appearing at Serial No,55 of the said schedule includes the products of the herbs etc."
' Learned counsel also argued that the petitioner company has not come up with clean hands while challenging the impugned notification, because, the notification became enforceable with effect from 1-7-1992 and since the petitioner company was enjoying total exemption by virtue of the order of the Government from all taxes for a period of 5 years hence, when the period expired in the year 1994 only then the notification has been challenged, therefore, it was argued that the petition is not maintainable.
20. Last limb of the arguments of the learned counsel for the respondent was that writ is not appropriate remedy in the instant case and the petitioner company can seek the relief in other forum.
21. Learned counsel for the respondent in support of his argument has taken us again to sections 134 to 137. His new point was that under section 134 a Local Council is to levy tax when directed by the Government and that under section 136 of the Ordinance it is the Government which frames model tax schedule through which the Local Councils are guided while levying a tax. He was also of the view that under section 137, if a Local Council fails to give effect to the direction of the Government then under subsection (2) of section 137 of the "Ordinance" the Government can make an order giving effect to its own direction. He also referred section 153 of the "Ordinance" where Government shall have general power of supervision over the Local Councils in order to ensure their activities to be in conformity with the Ordinance.
22. As we intend to dispose of this writ petition on technical grounds, therefore, we will avoid to make any observation as to the items mentioned in the Second Schedule which requires definition i,e, whether at Serial No,27 'Soft drink' would also include 'Jam-e-Sher in' or not. Similarly at Serial No,55 of the schedule 'medicinal syrup' prepared from herbs will be covered by 'herb-so to be made subject of imposition of export tax.
23. There are two questions which required determination for the purpose of disposal of present writ petition. Whether the Provincial Government can independently impose tax or it has to do it through the District Council to which our reply is that, no tax can be levied by the Provincial Government under the Ordinance. It can only direct the Local Council to levy a tax/fee enumerated in the Second Schedule. Section 135 of the Ordinance requires that all taxes levied by the Local Council shall be notified and unless otherwise directed by the Government and be subject to previous publication. Under section 136 of the Ordinance Provincial Government can frame a "Model Tax Schedule" for the guidance of the Local Council. In our view, where the Government has directed a Local Council to levy a tax as enumerated in the Second Schedule or where the Government has framed a Model Tax Schedule, it can direct a Local Council:--,
(a) to levy any tax;
(b) to increase or reduce any such tax or the assessment thereof to such extent as may be specified; or
(c) to suspend or abolish the levy of any such tax. It is under section 137, subsection (2) that where direction of the Government, if not complied with. Government can make an order for giving effect to the aforesaid direction. Meaning thereby that even non-compliance of the direction does not automatically makes model tax enforceable and it will be only the Local Council which shall abide and to be guided by the Model Schedule of the tax, failing which Government will make an order. In the instant case the District Council has complied with the direction of the Government and has levied/charged the tax hence the provisions of section 137(2) are not attracted to the facts of the case.
24. The view, that export tax can only be imposed by the Local Council and not directly by the Government is, earlier taken by learned Single Judge of Lahore High Court in a case reported as 1991 CLC 1196 (M/s. Nemat Flour Mills (Pvt.) Ltd. v. Government of Punjab and others).
25. The notification through which the export tax is being levied/charged has not been published in the official Gazette. We asked the learned counsel for the respondents if he could show the published Gazette, and in fact we asked him that we would give him time to procure the same but, the learned counsel insisted on his argument that notwithstanding the non-publication of official Gazette the notification by itself is carrying the force of law. We have checked the record. No such Gazette Notification is available on the record. The law on the subject is very clear which we will be citing soon, but, before that, we would like to refer to the provision of Ordinance which requires the publication of the notification. Section 135 of the Ordinance is reproduced below:-- "135. Notification and enforcement of taxes.--(1) All taxes levied by a Local Council shall be notified and shall, unless otherwise directed by Government, be subject to previous publication."
' Similarly the contents of N.-W.F.P. Local Council (Imposition of Taxes) Rules, 1980 Rule 7 is reproduced as under: , "7. The taxation proposal sanctioned under these rules shall be notified in the official Gazette and shall come into force on or with effect from such date subsequent to the issue of the notification as may be specified in the notification."
' The N.-W.F.P. District Council (Export Tax) Rules, 1984, section 2(h)) is as under:-- "Export Tax Schedule means the Export Tax Schedule notified in the Government Gazette for a District Council;"
The perusal of aforesaid sections of law and rules, show that tax imposed should be notified and to be published m official Gazette. The word 'notification' has been adjudicated upon by a number of judgments which are Muhammad Suleman and others v. Abdul Ghani PLD 1978 SC 190; Abdul Wajid and others v. Aftab Ahmed Khan, Deputy Registrar and others-,NLR 1992 CLJ 247; Muhammad Ishaq v. Chief Administrator of Auqaf, Punjab PLD 1977 SC 639 and Muhammad Yaseen v. James Masih and others PLD 1982 Lah.
217.
26. In the light of case-law on the subject where the word 'notification' simplicitor was used in a statute, it was held that a notification is not to be made in the office and kept in the file or known to few, but should be as publicised that it shall become known to all, and particularly those who are going to be affected, either to be benefited or to be put to some loss on account of such notification.
27. Admittedly, aforesaid notification was never published in the official Gazette hence it has got no force of law. As such is declared to be null and void and of no legal effect against the rights of the petitioner company.
28. Having observed above that the notification having been not published in the official Gazette has got no legal effect, we need not, give our finding as to the life of the notification impugned.
However, we observed that the plain reading of the notification shows that it was to expire after 3 years.
29. Learned counsel for the respondent has taken us to the ground of non-maintainability of the writ petition on the ground that other remedies are available. In this case the petitioner company has exhausted all remedies and finally has invoked the Constitutional jurisdiction of this Court, we have already dealt with factual aspect in the preceding paras. Regarding long litigation.
30. For reasons given above we accept this writ petition in terms of prayer made in the petition.