CH. IJAZ AHMAD, J. - I intend to decide the following writ petitions by one consolidated judgment as having similar facts and law:- I. W.P.No. 4278-99 3. W.P.No. 978-99 5. W.P.No. 980-99
7. W.P.No. 16684-98
9. W.P.No. 4161-99 II. W.P.No. 8948-98
13. W.P.No. 2961-99
15. W.P.No. 2859-99
17. W.P.No. 10997-98
19. W.P.No. 11024-98 21. W.P.No. 10850-98 23. W.P.No. 12523-98
25. W.P.No. 20638-98
27. W.P.No. 2526-98
29. W.P.No. 12610-98 31. W.P.No. 6593-98 33. W.P.No. 7203-98 35. W.P.No. 8687-98 37. W.P.No. 8669-98
39. W.P.No. 8463-98 41. W.P.No. 8298-98 43. W.P.No. 8077-98 45. W.P.No. 8159-98 47. W.P.No. 5058-98
49. W.P.No. 12907-98 51. W.P.No. 28048-97 53. W.P.No. 28045-97 55. W.P.No. 8896-98
2. W.P.No. 4278-99
4. W.P.No. 979-99
6. W.P.No. 215558-98
8. W.P.No. 1474-99
10. W.P.No. 9925-98
12. W.P.No. 978-99
14. W.P.No. 6027-98
16. W.P.No. 979-99
18. W.P.No. 10878-98
20. W.P.No. 10853-98
22. W.P.No. 8731-98
24. W.P.No. 10185-98
26. W.P.No. 4884-98
28. W.P.No. 2527-98
30. W.P.No. 6112-98
32. W.P.No. 7987-98
34. W.P.No. 7117-98
36. W.P.No. 8685-98
38. W.P.No. 8559-98
40. W.P.No. 8413-98
42. W.P.No. 8338-98
44. W.P.No. 8076-98
46. W.P.No. 5060-98
48. W.P.No. 5057-98
50. W.P.No. 12906-98
52. W.P.No. 28047-97
54. W.P.No. 28046-97
56. W.P.No. 8075-98
57. W.P.No. 8054-98 59. W.P.No. 8052-98 61. W.P.No. 8226-98 63. W.P.No. 2921-98 65. W.P.No. 6870-98
67. W.P.No. 8583-98 69. W.P.No. 8619-98 71. W.P.No. 6038-98 73. W.P.No. 3646-98 75. W.P.No. 3648-98
77. W.P.No. 7190-98 79. W.P.No. 3225-98 81. W.P.No. 9079-98 83. W.P.No. 7526-98 85. W.P.No. 17560-98
87. W.P.No. 16657-98 89. W.P.No. 15777-98 91. W.P.No. 13163-98 93. W.P.No. 1187-99 95. W.P.No. 13139-98
97. W.P.No. 12038-98
99. W.P.No. 7769-98
100. W.P.No. 74-99 102. W.P.No. 8960-98 104. W.P.No. 19764-98 106. W.P.No. 2727-98 108. W.P.No. 2906- 98
110. W.P.No. 3373-98 XXXXX
101. W.P.No. 26169-98 103. W.P.No. 8235-98 105. W.P.No. 2530-98 107. W.P.No. 2740-98 109. W.P.No. 3312-98
111. W.P.No. 3427-98
112. W.P.No. 4306-98 114. W.P.No. 5177-98 116. W.P.No. 5595-98 118. W.P.No. 5765-98 120. W.P.No. 9337- 98 122. W.P.No. 9399-98 124. W.P.No. 18369-98 126. W.P.No. 5219-98 128. W.P.No. 6277-98 130. W.P.No. 6583-98 132. W.P.No. 7029-98 134. W.P.No. 4605-98 136. W.P.No. 10715-98 138. W.P.No. 2363-98 140.
W.P.No. 5837-98 142. W.P.No. 5945-98 144. W.P.No. 5800-98 146. W.P.No. 10712-98 148. W.P.No. 9248-98
150. W.P.No. 2834-98 152. W.P.No. 2474-98 154. W.P.No. 11025-98 156. W.P.No. 11087-98 158. W.P.No. 4593-99 160. W.P.No. 6207-99 162. W.P.No. 5547-99 164. W.P.No. 2701-99 166. W.P.No. 6354-99
113. W.P.No. 4968-98
115. W.P.No. 5593-98
117. W.P.No. 5596-98
119. W.P.No. 21178-98
121. W.P.No. 9542-98
123. W.P.No. 10371-98
125. W.P.No. 6992-98
127. W.P.No. 11136-98
129. W.P.No. 6349-98
131. W.P.No. 6641-98
133. W.P.No. 18984-98
135. W.P.No. 10455-98
137. W.P.No. 5082-98
139. W.P.No. 8600-98
141. W.P.No. 5838-98
143. W.P.No. 4696-98
145. W.P.No. 10711-98
147. W.P.No. 10720-98
149. W.P.No. 2037-98
151. W.P.No. 10254-98
153. W.P.No. 6700-98
155. W.P.No. 11071-98
157. W.P.No. 2036-98
159. W.P.No. 308-99
161. W.P.No. 5985-99
163. W.P.No. 2919-98
165. W.P.No. 21467-99
167. W.P.No. 5221-98 Briefly the facts of the case are that the petitioner- Company purchased two Mercedes Benz Motor Cars 1800 C.C. In the year 1994-95 and got the same registered with Motor Registration Authority, Lahore under the provisions of the West Pakistan Motor Vehicles Ordinance, 1965 vide registration No. LOV-5151, dated 02.11.1994 and LOW- 5151 dated 23.4.1995 respectively. The petitioner purchased and registered the vehicles in the year 1994-95 and paid all the taxes, duties and charges payable in this year. On 01.07.1997, the Punjab Finance Act, 1997 (hereinafter referred to as "The Act") came into force. Section 7 of the Act reveals that the Provincial Government has levied one time Tax on Luxury vehicles at the rate of Rs.2-Lacs, Rs.4- Lacs and Rs.3-Lac on vehicles with engine capacity upto 2000-CC, exceeding 2000-CC and Land Cruser, etc. With capacity of 2000-CC respectively.
Respondent No.2 demanded payment of Rs.200,000/- as tax on luxury vehicles vide letter dated 13.1.1998 and the last date for payment of the tax was fixed on 20.1.1998. Feeling aggrieved the instant writ petitions have been filed with the following prayers:-
(a) "That Tax on Luxury Vehicles under Section 7 of the Punjab Finance Act, 1997 may graciously be declared to be unconstitutional and without lawful authority.
(b) Without prejudice to the above the retrospective operation of the impugned tax may graciously be declared to be violative of the fundamental rights and, therefore, to that extent bad in law.
(c) Without prejudice to the above, it may graciously be declared that the tax is unlawful because of it being ambiguous and unclear as to its subject-matter and mode of collection.
(d) Any other relief this Hon'ble Court may deem fair just and appropriate may also be granted to the petitioner".
2. Syed Mansoor AN Shah, Advocate for the petitioner Contended as follows:-
(i) That impugned tax on luxury vehicles is outside the domain of the Provincial Legislature as the impugned tax clearly falls in entry No.50 read with entry No.59 of the Federal Legislative List of the Constitution therefore, Section 7 of the Act is absolutely unconstitutional as the impugned tax is a colourable legislation. He relied upon interpretation of Statute by Bindra. 8th Edition Monogram 15 Page 907; (AIR 1939 PC. 53) (AIR 1962 SC 137), (AIR 1953 SC 375, (1989 PTD 488).
(ii) The impugned tax is violative of Article 25 of the Constitution as it is discriminatory and has created unreasonable classification. He relied upon (PLD 993 S.C. 341); (PLD 1992 S.C. 563); and (1991 CLC 13).
(iii) Section 7 of the Act has given unqualified and unfattered discretion to the executive, therefore, the same is ultra vires the Constitution. He relied upon: (PLD 1964 SC 718), (PLD 1997 Lah. 617), (PLD 1988 SC 146), (PLD 1966 SC 388), (AIR 1981 SC 1824), (AIR 1982 SC 149), (1998 CLC 187) and (PLD 1964 Lah. 718).
(iv) The impugned Tax is violative of Article 23 of the Constitution as it has been applied with retrospective effect. The retrospective taxation on the property of the petitioner is unreasonable therefore, the same is opposed to the spirit of Article 23 of the Constitution. He relied upon (PLD 1992 Lah. 462); (PLD 1993 S.C. 341); and (AIR 1961 S.C. 293).
(v) Section 7 has fixed a cut of date i.e. 30th of June, 1994 and created an artificial taxable thrash- hold which is absolutely unreasonable and violative of the mandate of Constitution as provided in Article 23 of the Constitution. He relied upon: (PLD 1958 SC 41) (PLD 1964 SC 673)
(PLD 1966 Dhaka 472) (PLD 1967 SC 554)
(1998 CLC 745) (AIR 1969 SC 197)
(AIR 1968 SC 353) (AIR 1983 SC 130)
(vi) The petitioner purchased vehicle in-question before the impugned Act and got registered under the provisions of the West Pakistan Motor Vehicles Ordinance, 1965 and before the promulgation of the Act, 1997. Hence the provisions of the Act are not attracted on the well-known principle of past and closed transaction. He relied upon (P.T.C.L. 1994 CL 222).
(vii) The vested rights have already accrued to the petitioner before the promulgation of the Act which cannot be taken away through retrospective taxation.
(viii) The Federal Government has added Section 14-D in the Wealth Tax Act, 1963 on the basis of entry No.50 of the Federal Legislative List of the Constitution, therefore, the impugned tax is ultra vires of the Constitution.
(ix) The impugned legislation is hit by Article 25 of the Constitution as the said tax has not been imposed by other Provincial Legislatures, in Federal Capital and Tribal Areas.
(x) The impugned legislation/Section 7 of the Act is also hit by Article 25 of the Constitution as the tax has been levied on the engine capacity and the term "luxury vehicle" has not been defined. As per Section 7 (a) (a) no list of other cars of the same capacity of engine has been notified by the Government which clearly reveals that many other Cars of similar capacity of engine have been left out at random; some names have been inserted in the said clause.
(xi) Section 7 (3) does not specify the time, therefore, demand raised by respondent No.2 has no legal sanction or authority to impose the tax on the aforesaid vehicles.
(xii) The Government was duty bound by virtue of Section 5 (5) of the Act to make Rules for giving effect to the provisions of aforesaid Section 7 but the Government has failed to frame the Rules, therefore, action of respondent No.2 is without lawful authority.
(xiii) The impugned Act is not sustainable in the eyes of law as the same levies tax on the capital value of the assets. The vehicles are assets of the petitioner and Wealth Tax is also imposed on the aforesaid vehicles on the basis of Wealth Tax Act, 1963. "herefore, the impugned Act is not sustainable in the eyes of law on the well-known principle of Pith and Substance. He relied upon (1989 PTD 488). He further elaborated that Section 3 is the charging Section of the Wealth Tax Act, 1963 which has imposed on the net wealth assets and tax is also imposed on the owners on the basis of engine capacity by addition of Section 14-D in the Wealth Tax Act, 1963 by the Federal Government. He relied upon (1992) 65 Tax 315. The Interpretation of Statute by Bindra 8th Edition 897; Interpretation of taxation statute by D.B. Mettan page 95; (AIR 1945 P.C. 98) (AIR 1930 S.C. 173); (PLD 1966 Lah. 718); (1994 S.C.M.R. 712); and (PLD 1992 Peshawar 191).
(xiv) That its effect must be prospective and not retrospective. He relied upon (AIR 1989 S.C. 665); (AIR 1968 S.C. 353); (AIR 1983 S.C. 130).
3. (W.P.No. 5082/98); Mr. Imtiaz Ahmed Siddiqui, Advocate for the petitioner contended that the petitioner purchased second hand Pajero Model 1984 the bill of entry was opened in the year 1989; the price of the same is less than Rs.3 lac whereas the tax has been imposed on it on the basis of Section 7. He further stated that all the vehicles in question were purchased by the petitioner before lst July, 1997, therefore, the impugned tax could not be levied on the transaction which were past and closed. He further stated that tax could only be imposed on those vehicles which got registration certificate from the respondents under the provisions of the West Pakistan Motor Vehicles Ordinance 1965. If the vehicle does not obtain registration from the respondents, then they have no authority to impose tax. In other words liability to pay tax is dependent on the registration of vehicle. This fact alone is sufficient to declare the impugned Act ultra vires of the Constitution. He further urged that the wording of Section 7 itself reveals its effect as prospective and not retrospective because the legislature has used the word of future tense: "shall be." He further contended that for the purpose of imposing tax with retrospective effect, there should be more provisions in the Act to destroy the past and closed transaction. He relied upon (PLD 1997 S.C, 80); and (PLD 1992 Karachi 470). He summed up his arguments that vested right has already accrued to the petitioner, therefore, the same cannot be taken away by the impugned legislation. He relied upon (1993 SCMR 1905).
4. (W.P.No. 2311/1998). Mr. Zia Rizvi, Advocate for petitioner argued that the word "Capital Asset" is defined in Section 2 (12) of the Income Tax Ordinance, 1979 therefore, the Provincial Legislature was not competent to promulgate impugned Act as it was debarred to frame the law on the same subject.
5. (W.P.No. 19764/98). Petitioner's counsel contended that petitioner No.1 is a limited Company and the vehicle is its ownership. The vehicle was registered in Sindh and the same was sent temporarily to Punjab for Federal Project, therefore, Section 7, was not attracted.
6. (W.P.No. 6700/98 and W.P.No. 2474/98). Pir S.A. Rashid, Advocate for the petitioners contended that the word "and" is used by the legislature in conjuctive sense for the purpose of imposing tax.
Two pre-conditions for imposing tax are as follows:-
(i) Luxury vehicle should have been manufactured abroad after June, 1994.
(ii) The vehicle should have been registered in the Punjab after 30th of June, 1994.
Since the vehicles in-question were manufactured before 30th of June, 1994, therefore, Section 7 is not attracted. He relied upon PLD 1964 Karachi 399.
7. (W.P.No. 19500/98). Dr. A. Basit, Advocate for the petitioner contended that tax was not recoverable from the petitioner as he sold the vehicle to Major Alam Jan on 04.12.1997 through oral agreement. He stated that the tax was to be collected from the owner at the time of demand of tax and not from the date of enforcement of the impugned Act.
8. Mr. Shahid Azeem, Advocate in (W.P.No. 4161/99); contended that petitioner purchased his Car on 26.3.1991 which was taken away by someone from his house on 27.10.1991. He lodged F.I.R, on the same day. On the recovery of vehicle, he got it registered on 30.6.1994, therefore, impugned legislation is not applicable in his case. He adopted the arguments of Syed Mansoor Ali Shah.
9. Rana Muhammad Sarwar, Advocate in (W.P.No. 28045/97; W.P.No. 28046/97 and W.P.No. 28047/97); contended that petitioners have already been paid tax imposed by the Provincial Government under the provisions of the West Pakistan Motor Vehicles Taxation Act, 1958. Therefore, respondents have imposed double tax through the impugned legislation without amending the existing law. He further stated that petitioner's vehicle is old one and its price is not more than Rs.5 lac. Section 7 do not provide guidelines qua the new vehicles mentioned in the Section as well as old vehicles. Mere naming of vehicle and engine capacity, does not provide guidelines. He further urged that the legislation falls under the phrase "colourable legislation". He relied upon (AIR 1980 SC 271).
10. Mian Abdu/ Ghafar, Advocate; (W.P.No. 26595/98); contended that vehicle of the petitioner is not registered but the respondents have imposed the tax which is against the provisions of Section 7.
11. Mr. Irfan Qadir, Advocate for respondents rebuttedthe contentions of the learned counsel for the petitioners and submitted as follows:-
(i) The Government on 23.4.1998 has framed the Rules under Section 7 (5) of the Punjab Finance Act. The words luxury vehicles are not mentioned in any of the list, therefore, it is a prerogative of the Provincial Government to frame the law on the subject on the basis of residuary power given under Article 142(C) of the Constitution. He highlighted that the term luxury was mentioned in Item No.44 of the Government of India Act, 1935 it appears that the word "Luxury" has always remained in the Provincial list.
(ii) That Item No.50 of the Federal list of the 4th Schedule reveals that tax can be imposed on actual value of assets. The vehicle s not mentioned in Item No.50, therefore, the Provincial Government is not prohibited to frame the law on the basis of the general Item No.50 of the aforesaid Federal Legislative list and the field is open under Article 142 (c).
(iii) That the Provincial Government is competent to frame the law on the subject on the well- known principle of interpretation that all the Articles and. Items should be read harmoniously. He further urged that in case of conflict between two items than it should be liberally construed in favour of State.
(iv) The cut of date has rightly been mentioned in the Act and he relied upon AIR 1980 S.C. 1042; and AIR 1978 S.C. 264.
(v) Tax can be imposed on the luxury vehicle on the basis of engine capacity. He relied upon the meanings of word ' luxury' from the Oxford Dictionary which means anything pleased; enjoyment; pleasure.
(vi) That question of retrospectivity is not attracted in the present case. He relied on the principle laid down by Caries in his book on Interpretation of Law 7th Edition at Page 387.
(vii) That all the points raised by learned counsel of the petitioners are fully rebutted by the dictum laid down by the Indian Supreme Court in AIR 1980 S.C. 271. The Indian Supreme Court considered the entry No.49 of the State list and entry No.86 of the lists 1 and 2 which are exactly similar to the entry No.50 of the Federal legislative list of the Constitution and laid down a principle that the Provincial Government is competent to frame the law.
(viii) That the question of retrospectivity does not arise as the Punjab Finance Act does not take away any vested right accrued to the petitioners under any existing law. He relied upon the following:-
(1) AIR 1980 SC. 271.
(2) The Interpretation of Statutes by Caries 7th addition 387.
(ix) That there is no discrimination in the impugned Act. The Hon'ble Supreme Court has considered this aspect of the case in Elahi Bakhsh's case (PLJ 1997 S.C. 1027). He distinguished the cases i.e. 1986 SCMR 1917 and 1993 SCMR 1905 wherein the concession was taken away with the retrospective effect by an executive order but in the present case the legislator in their wisdom fixed the cut of date without taking away and vested right accrued to the petitioners under any existing laws or under any executive order of the respondents.
12. Mr. Ghulam Haider Al-Ghazali, Additional Advocate General adopting the arguments of Mr. Irfan Qadir, Advocate, of the respondents contended that Provincial Government is not prohibited to frame the law on the basis of general item No.50 of the Federal list and the field is open by virtue of Article 142 (c) of the Constitution. The legislature is within its legal right under the Constitution to fix any cut of date to take even the vested right accrued to the petitioner. He relied upon 1993 SCMR 1905. He further urged that Section 7 does not give to executive any unguided authority to exempt any vehicle from imposition of tax. He further stated that Section 7 clearly reveals that the tax is leviable on the capacity of the engine. Therefore, equality clause is not attracted.
Learned AAG, pointed out that Rules were notified vide Notification No. S.O.Tax (EXT) 3(17)97 (IV) on 23.4.1998, and the same had already been placed on record. He further stated that impugned Act was also challenged in W.P.No. 1691/98 on the same grounds and the same was dismissed vide judgment dated 28.1.1999.
13. The learned Deputy Attorney General appeared on behalf of the Attorney General of Pakistan to whom the notice was also issued under Order 27-A, CPC. The learned Dy. Attorney General contended that the Provincial Assembly has absolute power to enact laws on the subject not mentioned in any list by virtue of Article 142 (c) of the Constitution. He further urged that once the Provincial Assembly has power to enact the law, then it has also power to give retrospective effect to the laws. He relied upon Item No.33 of concurrent list. He further stated that Item No.50 of the Federal Legislature List deals with the capital value of assets, therefore, both the entries are distinct and there is no conflict between Section 14-D of the Wealth Tax Act and Section 7 of the Punjab Finance Act, 1997. In view of this, Article 143 is not attracted in the present case as there is no inconsistency between the Provincial Law and Federal Law. He further stated that the Provincial Assembly has absolute power to enact the laws and the Court should have taken into consideration certain principles laid down by the Superior Courts while declaring any law ultra vires. He relied on PLD 1983 S.C. 457. Fauji Foundation's case (PLD 1995 S.C. 66). Sabir Shah's case, PLD 1977 S.C.
11. Zulfiqar AH's case. He further stated that our Constitution is based on trichotomy and this Court has no jurisdiction to enact the law. He further urged that Court has no concern with the wisdom of legislature and he relied upon Mehram Ali's case (PLJ 1998 S.C. 1415). He further stated that Hon'ble Supreme Court has laid down a principle that Courts should save the laws instead of declaring them ultra vires and he relied upon the following judgments:- PLD 1995 S.C. 432, Multi National PLD 1997 S.C. 582 & PLD 1977 S.C. 426
14. I have given my anxious consideration to the contentions of the learned counsel of the parties and perused the record myself. Mr. Irfan Qadir, Advocate, for the State submitted that the subject- matter of the impugned Act, falls within the preregotive of the Provincial Assembly on the basis of residuary powers given under Article 142 (c) of the Constitution. The word "Luxury Vehicle" is not mentioned in any of the list. On the basis of para-materia reading of different Constitution of Pakistan and Government of India Act, 1935, it transpires that luxury has always remained on the provincial list. Syed Mansoor Ali Shah, Advocate learned counsel of the petitioner alongwith other Advocates for the petitioner, on the other hand, contended that entry No.50 in the Concurrent List relates to taxes on the capital value of the assets, and does not cover taxes on capital or immovable property. Hence, entry No.50 does not contemplate the subject-matter of the Act. In order to resolve this controversy, it is necessary to examine the impugned Act for the purpose of ascertaining its real scope, object and purpose. Before undertaking an examination of the Act, it would be useful to reproduce relevant Articles of the Constitution, relevant entries in the fourth schedule and to state here the well-recognized rule of interpretation of Constitution.
CONSTITUTION OF THE ISLAMIC REPUBLIC OF PAKISTAN. 1973 Article 70 (4):- In this Article and the succeeding provisions of the Constitution, "Federal Legislative List" and "Concurrent Legislative List" mean respectively the Federal Legislative List and the Concurrent Legislature List in the Fourth Schedule.
Article 141 Extent of Federal and Provincial laws.-------- Subject to the Constitution, "Majlis-e-Shoora (Parliament) may make laws (including laws having extra-territorial operation) for the whole or any part of Pakistan, and a Provincial Assembly may make laws for the Province or any part thereof.
Article 142:- Subject-matter of Federal and Provincial laws, subject to the Constitution:-
(a) Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to any matter in the Federal Legislative List;
(b) Majlis-e-Shoora (Parliament) and a Provincial Assembly, also, shall have power to make laws with respect of any matter in the Concurrent Legislative List;
(c) A Provincial Assembly shall, and Majlis-e-Shoora (Parliament) shall not, have power to make laws with respect to any matter not enumerated in either the Federal Legislative List or the Concurrent Legislative List; and
(d) Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to matters not enumerated in either of the Lists for such areas in the Federation as are not included in any Province.
Article 143:- Inconsistency between Federal and Provincial Laws.- - If any provision of an Act of a Provincial Assembly is repugnant to any provision of an Act of Majlis-e-Shoora (Parliament) which Majlis-e- Shoora (Parliament) is competent to enact, or to any provision of any existing law with respect to any of the matters enumerated in the Concurrent Legislative List, then the Act of Majlis-e-Shoora (Parliament) whether passed before or after the Act of the Provincial Assembly, or, as the case may be, the existing law, shall prevail and the Act of the Provincial Assembly shall, to the extent of the repugnancy be void.
Federal Legislative List: (Part-1)
Entry No.50.
Taxes on the capital value of the assets, not including taxes on capital gains or immovable property.
Entry No.59.
Matters incidental or ancillary to any matter enumerated in this Part.
CONCURRENT LEGISLATIVE LIST.
Item No.33.
Mechanically propelled vehicles.
GOVERNMENT OF INDIA ACT. 1935 (Seventh Schedule List-ll, Provincial Legislative List)
Item No.48-A.
Taxes, on vehicles suitable for use on roads, whether mechanically propelled or not, including tramcars.
Taxes on the consumption or sale of electricity subject, however, to the provisions of Section one hundred and fifty four of this Act.
Cases on the entry of goods into a local area for consumption, use or sale therein.
Taxes on luxuries, including taxes on entertainments amusements, betting and gambling.
1956 Constitution 5th Schedule Provincial List Item No.83.
Taxes on vehicles, whether mechanically propelled or not, suitable for use on a road; on boats, launches and steamers on inland waters; on tram- cars.
Item No.88.
Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
Constitution of 1962 It is pertinent to mention here that Third Schedule of 1962 Constitution relates to exclusive powers of the Central Legislature. Therefore, Provincial Legislature had exclusive powers to frame law qua luxury vehicle by virtue of Article 132 of the Constitution of 1962. Now I deal with the principle of interpretation i.e. Pith and substance.
15. It is a fundamental principle of interpretation of law that where Constitution distributes legislative powers between two different law making bodies i.e. Federal and Provincial, an act enacted by any such body should be examined to ascertain its "pith and substance" or its true nature and character for the purposes of determining the real field of legislation within which subject-matter of the Act lies. The Privy Council has laid down the following principle in 1940 FCR 188 (Subrahmanyan's case) and observed as follows:- "It must inevitably happen from time to time that legislation, though proporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statute being declared in valid because the legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the judicial committee whereby the impugned statute is examined to ascertain its pith and substance or its true nature and character for the purpose of determining. Whether it is legislation with respect to matters in this list or in that."
The aforesaid principle i.e. Pith and substance was reaffirmed by the Federal Court of india in the following cases:- AIR 1941 FC 16 Atiqa Begum's case PLD 1956 FC 395 Muhammad Yousaf's case AIR 1947 PC 60 Prafulla Kumar Mukher Jee's case.
16. It will be advantageous to reproduce following except from the judgment rendered by the Privy Council in Attorney General of Alberta's case (AIR 1939 F.C. 53) to understand the principle of pith and substance:- "Whether a Provincial Act, which indirectly interferes in some degree with one of the powers of the dominion, is or is not ultra vires must be determined in each case as it arises, for no general test applicable to all cases can safely be laid down.
It is well-established that if a given subject-matter falls within any class of subjects enumerated in Section 91, it cannot be treated as covered by any of those within Section 92.
It is, therefore, necessary to compare the two complete lists of categories with a view to ascertaining whether the legislation in question fairly considered (alls prima facie within Section 91 rather than within Section 92. The next step in a case of difficulty will be to examine the effect of the legislation.
For that purpose the Court must take into account any public general knowledge of which the Court would take judicial notice, and may in a proper case require to be informed by the evidence as to what the effect of the legislation will be. Clearly the Acts passed by the Provincial Legislature may be considered, for it is often impossible to determine the effect of the Act under examination without taking into account any other Act operating or intended to operate or recently operating in the Province."
17. The Hon'ble Supreme Court has also considered all the case-law in Pir Rashid-ud-Daula's case (PLD 1971 S.C. 401) and laid down the following principle:- "In any event applying the rule of reconciliation the Court felt justified in giving a restricted meaning to the words of item 1 of the Concurrent List, so that they can reasonably relate to allied subjects other than those particular subjects or species of subjects, mentioned in the Provincial list, and therefore, the general power of legislation given by the Concurrent list does not invalidate provincial legislation with regard to a particular item in the same general field which was taken out of the general field and placed within the exclusive legislative competence of the Provinces."
18. The principle of pith and substance was also considered and taken note of by the Hon'ble Supreme Court in Province of East Pakistan and others Vs. Siraj-ul-Haque Patwari and others (PLD 1966 S.C. 854) and laid down the following principle "What I have had to say is to be understood to be said in support of my view that, within the meaning of the Constitution, the validity of any law properly made by a legislature is not to be judged wholly by reference to the source of power to make that law, as indicated in the Constitution, but for the most part, by reference to other existing laws, and by application of well- accepted rules by which conflicts between laws are to be resolved in a Federal Constitution."
19. The High Court of Patna also considered this principle qua competency of the body to legislate the law in AIR 1991 Patna 40 and laid down the following principle "It is well-known that the entries in the list are designed to define and delimit the respective area of legislative competence of the Union and the State legislature, It is settled principles of law that in the event there appears some conflict between entries in different lists, the same has to be read together without giving a narrow meaning to any of them. The powers of the Union and the State legislature are both expressed in precise and definite terms. There can be no reason in such a case of giving a broader interpretation to one power than to other."
20. Mr. S.M. Zafar in his book "Understanding Statutes" has elaborated rules of interpretation of the Constitution as laid down by the superior Courts in Pakistan and elsewhere. Some of the rules are reproduced hereunder to resolve the present controversy.
(i) Legislative history is relevant for interpreting Constitution provisions (Historical Modality).
(ii) While interpreting the Constitution the Court is entitled to apply well-recognized principles of Islamic Common Law (Ethical Modality).
(iii) Any interpretation which seeks to comply with or advance principle of policy enumerated in the Constitution should be adopted as against an interpretation which goes against such principles (Structural and Ethical Modality).
(iv) In case of a Federal Constitution, the Governments established thereunder are of enumerated powers i.e. That the Government can exercise only the powers granted to it and any other exercise of power could be invalidated as colourable exercise of legislative power (Structural Modality). But the legislative list is not to be interpreted in any narrow pedantic sense and should be construed in broader manner (PLD 1995 S.C. 66 at 179 to 193; PLD 1969 S.C. 623).
(v) What can be done directly cannot be done indirectly applies more rigorously to the Constitutional provision. So it was held in "Camming Vs. Missari" 71 US (4 Wall) 277, 325 (1867) that "Constitution deals with substance not shadows" (Structural Modality) also see Nawaz Sharif case (PLD 1993 S.C. 473).
(vi) The principle that the enumeration of certain specified things in a provision will exclude all things not so included, would not apply to Constitutional provision (PLD 1995 S.C. 66; PLD 1969 S.C.
623; Corpus Juris Scandium Vol. 16, P/86 & 88). Thus the maxim "expressio unuis est exclusio altterins" cannot be used to restrict the plenary power of the legislature or to control an express provision of the Constitution. (We have a caveat to the use of the words "plenary power of the legislature" in this context, as used by his Lordship in PLD 1995 S.C.
(vii) Court while construing a Constitutional provision, can press into service an established Constitutional convention in order to understand the import and working of the same (PLD 1996 S.C. 324 at 439, 441, 442 and 478).
21. I would also like to highlight other principles of interpretation of the provisions of the statues for the purpose of examining the statute: whether it was enacted in accordance with the provisions of the Constitution or not.
(i) It is settled proposition of law that for examining the Act or to see whether it is within the competence of the legislature that has enacted it or whether it is ultra vires, It is necessary to examine its pith and substance. Reliance is placed on PLD 1960 Lah. 407 (AIR 1949 All. 513).
(ii) In deciding whether particular Act is ultra vires the legislature, the Court has to record true nature and character of the legislation to ascertain the class of subject to which it really belongs.
The fact that an Act of Provincial legislature may, in some respect, trench upon a Federal subject is not the deciding factor; the proposition is supported by the judgment of Madras High Court, (AIR 1939 Madras 361).
(iii) The question whether an Ordinance is intra vires or ultra vires does not depend on considerations of jurisprudence or of policy (PLD 1961 S.C. 176), therefore, law applied to a single individual is not to be declared "ultra vires" or void on that ground (PLD 1977 Karachi 524).
(iv) To determine the operation of a statute, it is necessary to examine its pith and substance (PLD 1960 Lah. 407) (AIR 1949 Allahabad 513).
(v) The fact that an Act of a Provincial Legislation may, in some respect trench upon for Federal subject is not deciding factor (AIR 1939 Madras 361).
(vi) It must be shown affirmatively by the party challenging a statute that it was enacted as a part of a plan to effect indirectly something which the Legislature had no power to achieve directly (PLD 1953 P.C. 51).
(vii) There is a presumption in favour of legality of a statute and that a statute should not be held to be unconstitutional or ultra vires unless it is clearly repugnant to the Constitution (1975 AJK 69)
(AIR 1940 Allahabad 272), (PLD 1988 Lah. 725), (PLD 1971 S.C. 811).
(viii) Law should be interpreted in such a manner that it should rather be saved than be destroyed and that the Courts should lean in favour of upholding constitutionality of a legislation and should be reluctant to strike down laws as unconstitutional unless when absolutely necessary and if not done might result in grave and serious consequences (PLD 1982 Karachi 470) (PLD 1980 Dhaka L.R.
201).
(ix) Validity of statute may be saved by doing slight violence to language of the statute (PLJ 1978 Quetta 108) (AIR 1946 Nagpur 81).
(x) Presumption is always in favour of constitutionality of an Act and the burden is always upon him who attacks it to show that law has not been passed within the framework of Constitution. (PLD 1958 Pesh. 73); (PLD 1975 AJK 69).
(xi) Court of law is bound to proceed upon the assumption that the legislature is an ideal person which cannot make mistake (AIR 1942 Lah. 243).
(xii) Law should be interpreted in accordance with the intention of the legislature and the Court is expected to refrain to be wiser than law-makers (PLJ 1982 S.C. AJK 35).
(xiii) Ground realities of the changing situation should be kept in view, In this way, Court while construing a provision of statute may advance the object that law is not be static but dynamic as to cater for rapid changing conditions provided such construction does not violate any well-settled proposition of interpretation of statutes (1986 P.Crl.L.J. 2994), (PLD 1969 Lah. 209); (PLD 1958 Lah.
985).
(xv) The validity of piece of legislation does not depend on consideration of jurisprudence or politics (PLD 1957 Karachi 320).
(xvi) Constitutional provisions must be interpreted as befits an organic instrument in the widest possible sense; (1999 SCMR 526) Constitutional provision, may not be stretched by interpretation with the object of saving a statute which ex facie contravene on the Constitution (PLD 1958 S.C.
499).
22. The next argument of the learned counsel for the petitioner was that the impugned Act do. Not provide details in Section 7 and the competent authority has not framed the rules, therefore, the same is liable to be struck down and the notices issued by the respondent be declared as having issued without lawful authority. This contention of the learned counsel of the petitioner has no force. This aspect of the matter was dealt with authoritatively by the Hon'ble Supreme Court in Rana M. Sultan's case (PLD 1974 S.C. 228) and the relevant observation is as follows:- "It is universally recognised that as regulatory statutes have to deal with a variety of situations and subjects, it is not possible for the Legislature itself to make detailed regulations concerning them, and, therefore, the Legislature delegates its power to specified or designated authorities to make such detailed regulations, consistent with the statute, for carrying out the purposes of the parent legislation. The power so conferred is generally in the nature of an enabling provision, intended to further the object of the statute, and not to obstruct and stultify the same. As a consequence, the failure or omission of the designated authority to frame the necessary rules and regulations, in exercise of the power conferred on it by the Legislature, cannot be construed as having the effect of rendering the statute nugatory and unworkable. Such an eventuality could arise only if the Legislature indicates an intention to this effect in clear and unmistakable terms."
23. I am also fortified by the judgment of the Supreme Court in Jehangir Mirza's case (PLD 1990 S.C.
1013). The learned Addl. Advocate General also placed on record the Rules which were issued vide Notification No.S.O.Tax (E&T)(1 )97(LV) of 1997. Therefore, during pendency of the writ petitions this lacuna was removed by the respondent and this Court can take notice of the subsequent events (1990 CLC 1069).
24. It was further urged that the tax is bad in law as it was levied with retrospective effect, It is settled proposition of law that Legislature has authority to frame the law retrospectively (1993 SCMR 1905) Article 2 of the Constitution of 1962 or Article 4 of the Constitution of 1973 does not control the power of the Legislature to frame the laws having retrospective effect.
25. The question was dealt with by the Hon'ble Supreme Court in M/s. Haider Auto Mobiles case and the relevant observation is as follows:- The Legislature, however, which is competent to make a law, has full and plenary powers in that behalf and can even legislate retrospectively or prospectively. There is no such rule even if the Legislature, has, by the use of clear unambiguous sought to take a vested right, yet the Court must hold that such a legislation, in violative strike down that legislature on the ground that it has retrospectively taken away vested right. This proposition is also supported by PLD 1969 S.C. 599 Nabi Ahmad's case (PLD 1970 S.C. 146). The aforesaid proposition of law is also supported by the Indian S.C. AIR 1970 S.C. 169, AIR 1969 S.C. 519. This proposition was also considered by the Hon'ble Supreme Court in Salah-ud-Din's case and laid down the following principle (PLD 1991 S.C. 456). The Doctrine of Promissory Estoppel is subject to the following limitation:- The Doctrine of Promissory Estoppel cannot be in fact against the legislature or the laws framed by it because the Legislature cannot make a representation no need to discuss this point furthermore.
26. In the recent judgment my learned brother Mumtaz Ali Mirza, J. Has considered this aspect of the case qua the impugned Act in W.P. No. 1691 of 1998, after considering the case-law on both sides in the following terms:- 'The net result of the above discussion is that there being an express provision in the Punjab Finance Act, 1997 making it applicable from back date, the same could not be struck down on the ground that it purported to impair the so-called vested rights of the petitioner. The respondents have, therefore, unquestionable right to demand of the petitioner the payment of the tax sought to be evaded by the petitioner through instant petition."
27. It will be advantageous to reproduce a passage from the book of Mr. S.M. Zafar, UNDERSTANDING STATUTE which deals with the issue.
'Once a competent legislature has passed a fiscal law with retrospective effect, the tax levied thereby must be held to be by authority of law and it would be perfectly Constitutional and not invalid because of its being retrospective. There is nothing inherently unreasonable in giving retrospective effect to an enactment the object of which to prevent a loss of revenue to the State which would otherwise accrue but no retrospective affect should be given to a fiscal statute unless there is a clear provision or unless the effect is a necessary implication of the provision.
(ii) Statute will not affect rights which had accrued before a statute came into force unless there are express words in the statute affecting such rights or where retrospective affect to the statute is inevitable be necessary intendment or implication.
(iii) A statute is to be deemed to be retrospective which is away or impairs any vested right accrued under existing laws, or creates a new obligation or imposes a new duty or attatches a new disability in respect to transaction or consideration already passed."
28. It is settled proposition that Constitution should be read as organic whole. The Articles of the Constitution do not reveal prohibition that the Pakistani Legislatures/Parliament and Provincial Assembly do not possess the right to make retrospective legislation which every sovereign legislature possesses. The only express limit imposed upon the power of retrospective legislation is that legislature cannot make retrospective penal laws, meaning thereby any other law including taxation law may, therefore, be made with retrospective effect under the Constitution. I am fortified by leading judgment on the subject by the Hon'ble Supreme Court in Salah-ud-Din's case (PLD 1991 S.C. 546). The relevant observation is as follows:- The contention of the learned counsel for the petitioner that promissory estoppel is in the hindrance of the respondents to frame this law. The same has no force as the doctrine of promissory estoppel is subject to the following limitations as prescribed by the Hon'ble Supreme Court in Sa/ah- ud-Din's case (PLD 1991 S.C. 456). The Doctrine of promissory estoppel cannot be invoked against the legislature or laws framed by it because the legislature cannot make a representation.
29. The aforesaid proposition of law is also supported by the judgment of the Hon'ble Supreme Court in PLD 1969 S.C. 623 and the relevant observation is as follows:- The Legislature, however, which is competent to make a law has full and plenary powers in that behalf and can even legislate retrospectively or retroactively.
The Indian Supreme Court has also exhaustively dealt with this proposition of law and has held that the Indian Legislation have power to make laws with retrospective effect. AIR 1990 S.C. 1637.
The aforesaid proposition of law is also supported by the following judgments AIR 1970 S.C. 169 AIR 1969 S.C. 59 PLD 1969 SC 599
30. It was also contended that the impugned Act creates unreasonable classification which is not permissible under Constitution. This argument is not sound, It is settled proposition of law that reasonable restriction is permissible, therefore, contention of the learned counsel of the petitioners that the Engine capacity of 2000 and Mercedes etc. Is unreasonable classification has no force. I am fortified by the following judgments:- PLD 1976 S.C. 57 PLD 1976 S.C. 713 PLD 1975 S.C. 506 AIR 1990 S.C. 1637
31. Now I take up the argument of colourable legislation. The doctrine of colourable legislation has been explained by the Supreme Court in many cases, and it must now be regarded as settled law that the doctrine does not involve any question of bona tides or mala tides on the part of legislature and if the legislature is competent to pass a particular law the motives which impelled to frame Act are really irrelevant (AIR 1964 Madhia Perdesh 188) (AIR 1953 S.C. 375).
Where a challenge is made on this ground, what has to be proved to the satisfaction of Court is that though the Act ostensibly is within the legislative competence of the legislature in-question, in substance and in reality it covers a field which is outside its legislative competence.
Wherever legislative powers are distributed between Legislative bodies situations may arise where the two legislative, fields might apparently overlap, It is the duty of the Courts, however difficult it may be, to ascertain to what degree and what extent, the authority to deal with matters falling within these classes of subjects exists in each legislature and to define, in the particular case before them, the limits of the respective powers, It could not have been the intention that a conflict should exist; and, in order to prevent such a result the two provisions must be read together, and the language of one interpreted, and, where necessary modified by that of the other.
It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind observance to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved whereby the impugned statute is examined to ascertain its "pith-and substance" or its true nature and character, for the purpose of determining whether it is legislation with respect to matters in this list or in that. Reference can be made to AIR 1990 S.C. 1367, AIR 1966 S.C. 1571, AIR 1954 S.C. 375, AIR 1966 S.C. 416, AIR 1957 S.C. 297, AIR 1977 S.C. 2279, AIR 1959 S.C. 308, AIR 1960 S.C. 796, AIR 1962 S.C.
458, PLD 1983 S.C. 453.
32. In view of above the doctrine of colourable legislation has no application where the powers of legislation are fattered by any Constitutional limitation. Our Constitution prescribes distribution of legislative powers between Federation and Provinces, In the Constitution of 1973, two Legislative lists have been provided i.e. Federal Legislative Lit (Part-1 and Part-ll) and Concurrent Legislative List, It is pertinent to mention here Federal Legislative List Part-1 includes subjects over which Parliament has exclusive power of legislation. These includes defence, foreign affairs, nationality, citizen aircraft and education, administration, Courts and banks customs and excise duties and taxes etc. Part-ll of the Federal Legislative list consists of eight items: Railways, Mineral Oil and Natural Gases, Development of Industries, etc. Concurrent Legislative lists gives concurrent powers to the Parliament and Provincial legislatures over 47 items such as criminal law and- Procedure, Civil Procedure, Welfare of labour, Electricity etc. The entries in the Constitution only prescribes the legislative fields of the respective legislature and do not confer legislative power as such.
Reference can be made to AIR 1992 S.C. 580. It is well-known principle that Court must presume that the legislature knows its limit and legislates for those who are actually within its jurisdiction coupled with the principle that the enactment should be interpreted which will make it operative and not inoperative. Reliance is placed on (AIR 1959 S.C. 1102) (AIR 1963 S.C. 853).
33. The impugned Act is not on the specific list with specific capacity of engine, therefore, the same is not specifically covered under the aforesaid entries of both the lists. Even otherwise the debates at the time of framing the impugned legislation reveals that tax is imposed on luxury oars.
In Pakistan the Courts have referred to debates of the members of the legislatures particularly where such debates are available when the law is being construed (PLD 1957 Dhaka 342) but these speeches are hardly relevant when the language of the enactment is clear. I, therefore, take the advantage of debates and reproduce relevant portions thereof for understanding the real purport of the impugned Act.
34. The debates clearly reveal that the impugned tax has been imposed for the welfare of the general public which is a basic command of the Constitution. Principle of morality is one of the consideration to see the validity of the impugned Act as the principle laid down by the Hon'ble Supreme Court in Mian Nawaz Sharif's case (PLD 1993 S.C. 473). The fundamental duties and obligations of the legislature are to frame the laws for the welfare of the public. This is evident from the preamble of the Constitution and relevant paragraph of the preamble is reproduced hereunder:- "Wherein shall be guaranteed fundamental rights, including equality of status of opportunity before law, social, economic and political justice, and freedom of thought."
When the impugned Act is not covered specifically either of the two lists then it is the prerogative of the Provincial Legislature to frame the law by virtue of Article 142 (c) being residuary power of Provincial Legislature. Even otherwise the pith and substance of the impugned Act is covered under Item 33 of the concurrent legislative list and not in Item No.50 of Part-1 of the list.
35. I have also examined the impugned Act keeping in view the Injunctions of Islam. The impugned Act is valid as the same is framed for the welfare of the public at large, It is the need of the day to extract taxes from the rich who do not voluntarily pay the taxes.
The vehicles having the engine capacity of 2000-CC clearly fall outside the sphere of basic necessities, In order to make a nation strong and independent we will have to sacrifice the amenities of luxurious life, such as big cars and limousine, In this regard, many instances from the history can be quoted. We are fortunate enough that our Holy Prophet Hazrat Muhammad (PBUH) who is a model for us in every walk of life had left unprecedented examples of austerity and simplicity, It is out faith and duty to follow His Footsteps. God Almighty also^blesses those who follow the tenets of Islam faithfully. So, we should always be in search of those ways which have been approved by God Almighty and Hazrat Muhammad (PBUH). We can find one such example from the German history; when Hitler removed the disparity between the rich and poor by manufacturing one car i.e. Volks wagon for the whole nation. However, Hitler allowed manufacturing of Mercedes Benz Car only to entertain foreign dignitaries. By removing this disparity Hitler achieved his. Target and made his nation strong and free from the curse of status conscious. Similarly China is another example which emerged as a super power by shunning the ostentatious life. The whole nation of China worked together without any status conscious mind.
Our nation could not make progress as no national policies were formulated to remove a cleavage between the Haves and Have nots. Instead, we' encouraged status symbols. Much of the national wealth is wasted by importing these big vehicles. This has caused a down fall in the foreign exchange reserves. The people who can afford these luxury vehicles obtain loans from the financial institutions by mortgaging their valueless properties and thereafter, do not comply with the terms and conditions of agreements. They default in making payment which in turn cause heavy blow to the national wealth. Due to shortage of finance the Government is/was unable to undertake any developmental projects-.Which are need of the day. Non-reimbursement of loans; default in making payments of utility bills; evasion of tax; concentration of wealth in few hands and ostentatious life has taken us to a stage of poverty, It is for these reasons that the World Bank and International Monetary Fund (IMF) directs the Government and dictates their terms which has curtailed our freedom to an abject state of affairs. The super powers, the World Bank and the IMF have shackled our independence. They are not interested in our development, progress and prosperity. They are only concerned with their vested interests. We can emerge as a strong nation by doing away with our luxuries of life. The austerity is the only solution which can bring us to the right path of progress and prosperity. The debates of legislature reveal that the impugned Act is a step towards progress, prosperity by adopting austerity measures. -Therefore, the impugned legislation is not in conflict with the spirit of Constitution which envisages welfare Government. The Full Bench of this Court while deciding Intra Court Appeal No. 679 of 1998 considered the historical background of the creation of the country and my learned brother Mian Allah Nawaz, J. Observed as follows:- "At this juncture, we find it our duty to remind everyone, may be in office or not, that our economy is in bad shape, that our only solution lies in the path of austerity and simplicity. At this occasion, we are reminded of late Muhammad Khan Junejo, the then Prime Minister of Pakistan who had decided to abandon big luxury cars and himself decided to travel in Toyota Corona (1600 cc) car.
Let the all who matter, resurrect that decision and follow that path in every walk of life. No doubt spectacle of Pajeero, Land Crusiers, Mercedes and BMW and huge cosmetics in departmental stores are not in line with the indicators of our economy."
36. The impugned Act does not fall in Item No.50 of the 4th Schedule of Federal Legislative List Part- 1, therefore, there is no conflict between the impugned Act and Section 14- D of the Wealth Tax Act.
There is no inconsistency between Section 14-D of the Wealth Tax Act and Section 7 of the impugned Act. Both the provisions can co-exist on the principle laid down in PLD 1995 Lah.
56. The learned counsel of the petitioner relied upon the Full Bench Judgment of this Court, in which Section 2 of the Foreign Exchange (Temporary Restrictions) Act, 1998 was declared ultra vires on the ground that the legislature failed to provide guidelines. It is better and appropriate to reproduce Section 2 of the Foreign Exchange Act, 1998 and Section 7 of the impugned Act for the purpose of comparison.
2. Restriction on withdrawal of foreign exchange etc. "Notwithstanding anything contained in the protection of Economic Reforms Act, 1992 (XII of 1992) on in any other law for the time being in force, or in any agreement or contract, it is hereby provided that the right to hold, sell, withdraw, transfer, pay or take out foreign exchange held by any person in Pakistan as on the twenty-eight day of May, 1998 (the "specified date") without the prior permission of the State Bank of Pakistan shall remain suspended: Provided that there shall be no legal restriction on any person converting his foreign exchange held as above into rupees at the officially notified rate of exchange.
Explanation:- For the purpose of this Section "foreign exchange" means foreign exchange held in a foreign currency account or in such other form as the Federal Government may specify."
7. Tax on Luxury Vehicles. (1) There shall no levied and collected a one time tax at the following rates on luxury vehicles manufactured abroad and registered in the Punjab after 30th June, 1994, or registered after the said date outside the Punjab and plying in the Punjab:-
(a) Mercedes Benz, BMW.
Jaguar, Rolls Royee cars or cars of such other makes as may be notified by the Government:-
(1) with engine capacity upto 2000 cc.
(ii) with engine capacity exceeding 2000 cc.
(b) Land Cruiser, Patrol, Pajero, Range rover or any other luxury jeep and double cabin pick-up with engine capacity of 2500 cc or above or such other makes as may be notified by the Government.
(2) The tax shall be payable by the owner of the vehicle.
(3) Any person who fails to pay the tax within the prescribed time limit shall in addition to the amount of the tax be liable to pay a penalty not exceeding the amount of the tax due.
(4) Any amount of tax or penalty imposed which remains unpaid shall be recoverable as arrears of land revenue.
(5) The Government may make rules for giving effect to the provisions of this Section."
Mere reading of the above-mentioned provisions' clearly reveal that Section 7 has provided guideline and therefore, the judgment relied upon by the learned counsel of the petitioner is distinguished on facts and law. The rules have already been framed by the competent authority under the impugned Act. Although the Secretary to Government of the Punjab, Ministry of Excise and Taxation Department has framed the rules vide Notification dated 23.4.1998 but the rules are not providing sufficient guidelines for the implementation of Section 7 of the Punjab Finance Act in letter and spirit. Clause (a) of Section 7 reveals that Government has power to impose tax on any other vehicle of the capacity of engine but the rules are silent and do not provide guidelines.
Therefore, rules are not properly framed to achieve the purpose of the Act and are declared ultra vires.
37. Learned Advocate General Punjab has given following statement:- "(1) The vehicles registered prior to 30th of June..1994 which are registered in Pakistan would not be subject to tax.
(2) The cases in which the dispute is with regard to Engine capacity the petitioner may approach' the Department and prove from documents by the release or given by the manufacturers that their vehicles are fitted with Engines of a capacity less than the prescribed capacity. Once it is proved the owners of these vehicles shall also not be taxed."
The prayers of the petitioners which are covered under the statement of the Advocate General Punjab, are allowed.
38. In the end I must put on record my deep sense of appreciation for the valuable assistance rendered to the Court by the learned counsel for the rival parties.
39. In view of what has been discussed above these writ petitions have no force and are disposed of with the aforesaid observations.