Since common questions of law and facts are involved, therefore, this judgment will dispose of Writ Petition No,525 of 1997 as well as Writ Petition No,7090 of 1996.
2. Brief facts for disposal of writ petitions are that petitioner in Writ Petition No,7090 of 1996 obtained lease for the collection of goods exit tax from Zila Council, Pakpattan through public auction for a period of one year commencing on 1-71996 and expiring on 30-6-1997 for an amount of Rs,4,00,00,000 (Rs, Four Crore) being the highest bidder. The grant of lease was approved by the Secretary, Local Government and Rural Development Department vide his order No,LCS (Get)-1 (6), dated 7-7-1996. The petitioner by fulfilling the required conditions deposited 1/10th of the bid money as advance and also deposited security with the respondent Administrator, Zila Council Pakpattan.
The main thrust of the arguments advanced by the petitioner is that vide letter No, SOVI(LG)2- 25/1995, dated 6-6-1996 the schedule for rate of tax was modified to the disadvantage of the petitioner and by reducing the rate of tax fresh schedule was published. The detail of the schedule has been given in para.4 of the writ petition. Because the rates of tax at the time of obtaining lease were higher and the same reduced subsequently, therefore, the` petitioner has incurred and also likely to incur huge losses in collection of the tax. Although the letter of Government whereby fresh schedule was introduced was issued on 6-61996 yet the same was conveyed to the Administrator on 19-8-1996 which onward dispatched to the petitioner on 4-9-1996, whereas the lease period had commenced w,e,f, 1-7-1996. The petitioner, therefore, at the time of auction or at the time of approval of lease/contract in his favour was not aware that he will have to collect the tax at reduced, therefore, he offered bid for an 'amount of Rs,4,00,00,000 (Rs,Four Crore) as compared to the lease amount of previous year i,e, Rs,1,60,00,000. The enhanced bid was offered by keeping in view the prevailing rates of export tax to be charged by the petitioner. Reduction in tax has resulted in tremendous financial hiss to the petitioner, therefore, either the petitioner should be compensated or the subsequent schedule incorporating lesser rates of tax should be declared to be without lawful authority. On legal plane it has been argued that the power to levy a tax by Zila Council has been provided by sections 137, 138 and 144 of the Punjab Local Government Ordinance, 1979 read with Punjab Local Councils (Taxation) Rules, 1980 and Punjab Zila Councils (Export Tax)
Rules, 1990. These powers are enjoyed by the Local Councils independently. The Government of Punjab cannot in any manner reduce, alter or modify the rates of taxes imposed by the Zila Councils. The learned counsel has laid stress on the terminology used in sections 137 and 138 respectively. According to him under section 139(2) the word "such" is not 'without significance.
According to him the taxes if imposed by the Local Council shall be enforced and the levy will be made on the schedule published and notified by the - Zila Council itself. As the previous levy of tax has been made by the Zila Council, the petitioner is entitled to recover tax at the rate prescribed by the Zila Council. On factual plane, as detailed in Writ Petition No,525 of 1997, it is canvassed that in the revised schedule no goods exit tax can be charged on the seed meant for agriculture on the basis of Letter No,SOVI(LG)3-5/80 (P-II), dated 24-5-1996. The said order 'was conveyed by the Administrator to the petitioner on 16-11-1996, therefore, according to him reduction in the rate of tax has caused substantial financial loss' to him.
3. In Writ Petition No,7090 of 1997 it has been submitted that vide Letter No, SOVI(LG) 2-25/95, dated 6-6-1996 the previous schedule has been revised to the disadvantage of the petitioner and according to fresh schedule on poultry and eggs as well as poultry feed goods exit tax has be reduced. Apart from the chicks which were subjected to tax at the rate of Rs,10 per quintal, have been exempted from tax, therefore, huge financial loss has already accrued to the petitioner and the same is likely to accrue in the remaining period of his lease.
4. The Government of Punjab has been represented by the ,.Learned Assistant Advocate-General whereas the respondent Zila Council has been represented by its Legal Adviser along with the Chief Officer, Comments have been submitted in both the writ petitions. It has been argued on their behalf that the petitioner is bound by the terms and conditions of the agreement executed by him copy of which has been placed on the file. In condition No,12 if any dispute arises in-between the Council and lessee the Chief Officer and Taxation Officer would be authorized to resolve the dispute and the lessee will have a right of appeal to the Administrator. Under Condition No,13 ',the lessee has bound himself to abide by all the directions and instructions issued by the Government regarding recovery of the taxes. Special emphasis has been laid down under Condition No,14 wherein it has been agreed in-between the parties that in case of any type of dispute in-between them touching the rate of goods exit tax on its interpretation or explanation will be referred to a sole Arbitrator who will be the Commissioner, Multan Division, Multan and his decision will be accepted by the parties. During the continuation of the lease agreement lessee will be liable to pay all the instalments and dues due from him to the District Council. Further that no dispute will be taken to the Court of law. Under Conditions Nos.22 and 23 the lessee has bound himself to recover taxes on the rates amended be modifietal by the Government and he will not be entitled to recover any rebate in that behalf. Also that the Administrator of Zila Council will be authorized to cancel the lease on violation of the conditions. It has, therefore, been argued that the petitioner before moving this Court through the instant Constitutional petition should have availed of the remedy available to him by submitting himself to arbitration in accordance with the terms and conditions of the agreement/lease deed.
5. The learned counsel for the respondents have also laid emphasis on the point that letter whereby modified and amended schedule relating to recovery of goods export tax was issued and notified on 6-6-1996 has been annexed with the petition itself, therefore, it means that before commencement of the lease the rates have been modified and amended and the petitioner was aware of the same and bid Was offered by keeping in view the amended schedule. The amended schedule was annexed as Annexure "C" with the writ petition. Admittedly, the lease commenced from 1-7-1996 whereas letter was issued on 6-6-1996 i,e, about three weeks prior to the commencement of the lease. It was, thus, argued that keeping in view the terms and conditions of the agreement and also the fact that the amended schedule has been notified before commencement of the lease the petitioner is not entitled to any rebate or compensation as claimed by him. Much emphasis has been laid on the condition relating to reference of the dispute to arbitration. According to the learned counsel for the respondents the writ petition is not maintainable because an alternate and adequate remedy is available to the petitioner which is in the circumstances of the case is adequate rather an efficacious.
6. To response to these contentions the learned counsel for the petitioner has referred to the following citations along with some others, which were pronounced by this Court, the other learned High Courts as well as by the Honourable Supreme Court, holding that insertion of arbitration clause in the agreement does not debar or preclude the petitioner from moving this Court through the Constitutional petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973:--- AnAman-e-Ahmadia case (PLD 1966 SC 639).
Nagina Silk Mills v. I.T.O. (PLD 1963 SC 322).
Salahuddin v. Frontier Sugar Mills (PLD 1975 SC 244).
Raja M. Ramzan Qureshi Industries' case (PLD 1992 Lah. 324).
Kamran Industries' case (PLD 1996 Kar. 68).
Rattan Lal v. M.B.R. (1989 SCMR The gist and the ratio decidendi of the above-referred citations is to the effect that insertion of arbitration clause cannot always be treated to debar the petitioner from filing writ petition under Article 199 of the Constitution but if the circumstances of the case are of a nature that a dispute in- between the parties can be resolved in a better manner by the Arbitrator then writ has not to be issued.
7. I have considered the arguments advanced by the learned counsel for the parties and also gone through and considered the averments made in the petitions, comments as well as the annexures.
As regards the legal submissions made by the learned counsel for the petitioner that Government is not authorized to revise or modify the schedule of taxes imposed by the Zila Council by making a reference to sections 137, 139 and 157 of Punjab Local Government Ordinance, 1979 complete answer is available in judgment delivered it PLD 1997 Lah. 533 by this Court titled as "Dandot Cement Co. v. D.C./Collector". The import of the judgment is that the Government is fully empowered to issue instructions relating to imposition of exert of Goods tax and can also prescribe the rates 01 tax to be levied on various items to be exported outside of Zila Council.
As regards the contention that the petitioners were aware of the modification/reduction in rates of tax beyond the commencement of the lease agreement the question requires some enquiry because merely taking into account the dates issuance of letter, dated 6-6-1996 or the date of commencement of lease will not be sufficient to conclusively hold that till petitioner had in fact the knowledge of the revised rates of tax or whether that letter really been notified from where it could be inferred that public in general or the intending bidders had the knowledge of the same. Very important aspect of the case I that in case it is held that the petitioner has no knowledge and, therefore, incurred los and sustained financial damage then it was have to be calculated as to what is the extra amount of the financial loss sustained by him No roaming enquiry can be conducted in the behalf while deciding their writ petition evidence can be collected to determine the actual loss if any accrued to the petitioned Considering this aspect of the case couple with the fact that the petitioner himself h agreed to refer the dispute to arbitration, I am of the view that the dispute in-between the parties can better be resolved through in Arbitrator. The apprehension of the petition that the decision as a result of arbitration was be delayed which is obviously to the detriment and disadvantage of the petitioner, therefore, he has been constrained to move the present writ petition is not well-founded. It is true that the matter has to be resolved urgently because the collection of the tax has to be made and if at all the tax already collected is deficient then the petitioner may have to be compensated. It is, therefore, directed that the dispute shall be referred to Commissioner, Multan Division, Multan, who will act as Arbitrator and will deliver his award on the dispute raised by the petitioner as observed above, expeditiously and preferably within a period of one month.
8. This petition is disposed of with the observation made above.
9. There will be no order as to costs.