' I. MAHMUD, J.-This Constitutional Petition is directed against the order of the Director-General, Excise & Location, Sind, dated 16-10-1975, revising the previous order of his predecessor, who had fixed the gross annual rental value of the premises in dispute and also against the notice of demand issued by the Excise & Taxation Officer, Karachi pursuant thereto for payment of property tax, including betterment tax, as being without lawful authority and of no effect.
2. The petitioner, Wazir Ali, is the owner of building known as "Wazir Mansion" situate on Block No, 31/2, Nicol Road, Karachi, consisting of several tenements comprising of shops and office premises.
The G. A. R. V. Of the said building was first assessed at Rs, 1,79,748 by the Assessing authority 'B' & 'C'
Divisions, Kerechi, in 1968, but on appeal by some tenants, it was reduced to Rs, 1,56,3)4 by Ole Director, Excise & Taxation, Karachi, on 26-1/J-8. This assessment was further reduced to Rs, 1,33,750 on revision, by the order dated 31-12 1969 of the Additional Commissioner, Karachi, who was then the Revisional authority under section 10 of the Sind Urban Immovable Property Tax Act, 1958 (hereinafter called as 'the Act'). The petitioner paid the property taxes for the years ending 1975-76 on the basis of the G. A. R. V. Last revised as abresaid. But, in 1975 the petitioner received a notice from the Director-General, Excise & Taxation, Karachi, the Revision authority, for revising the G. A. R.
V. Fixed by the order passed on 26-11-1968 on appeal by the Director, Excise & Taxatior, Karachi, above-mentioned. The petitioner was eventually heard and the order was reserved, but no intimation of the order was received until 12-3-1`x76, when the petitioner, all of a sudden, received a Notice of Demand from the Excise & Taxation Officer, 'B' & 'C' Divisions, the respondent No, 3, calling for payment of Rs, 30,10.72 on account of balance of property taxes for the years 1968-6) to 1975.76 and Rs, 1,0(8.52 on account of betterment tax for the year 1975-76. A chaltan for payment into the State Bank of Pakistan was also enclosed with the said Notice. On enquiries, the petitioner came to know that an order was passed on 16.10-1975 by the Director-General, Excise & Taxation, Sind, the respondent No, 1, restoring the G. A. R. V. Fixed by the Director, Excise & Taxation, Karachi on appeal in his order dated 26-11-1968 at Rs, 1,56,384 and setting aside the order passed on revision by the Additional Commissioner on 31.12-1969 who had already reduced the G. A. R. V. To Rs, 1,33,750. The present petition has been filed to challenge the validity of the said impugned order dated 16-10- 1975.
3. It is not denied that the impugned order revising the G. A. R. V. Was passed by the Director- General in the purported exercise of his jurisdiction as Revising authority under section 10(2) of the Sind Urban Immovable Property Tax Act, 1958. In effect therefore, the Director-General was revising an earlier order passed in revision by the Additional Commissioner, who was then the competent Recision authority urider the said Act, and it is the submission of Mr. Shahenshah Hussain, learned counsel fur the petitioner, that such order etas patently illegal and without jurisdiction. Mr. Ghulam Ali Memon, learned Advocate-General, candidly conceded Ott a second revision or review of the order passed in revision by a competent authority, is not maintainable under law and, in this connection, he referred us to our judgment in Const. Petition No, 257176 (Lipton (Pakistan) Ltd. v.
Government of Sind and others (1), decided on 8.12-1976 Para, 11, in which the same concession of learned Advocate-General was recorded. We would, therefore, declare that the impugned order dated 16-10-1976 is without lawful authority and of no legal effect and it is hereby set aside.
4. The only question now left for consideration is the legality of the demand of Betterment Tax in respect of the premises in dispute. On the relevant date, the levy and collection of Betterment Tax on buildings and lands or part thereof used exclusively for commercial and industrial purposes at specified rates, was governed by section 3-A which was added to the Sind Urban Immovable Property Tax Act, 108 by the Sind Urban Immovable Property (Second Amendment) Ordinance, 1974, since repealed and reenacted by Sind Act IIl of 1975. Section 3-A reads as follows :- "3-A. There shall be levied and collected betterment tax on buildings and lands or part thereof used exclusively for commercial or industrial purposes at the following scales:
(i) Commercial purpose : Ten paisa per square foot of coveted area. (II) Industrial purpose : Five paisa per square foot of covered areal Provided that the buildings or lands the area of which is up to 120 square yards in case of commercial purpose and 400 square yards in ease of industrial purpose shall be exempt from the tax."
5. It is not disputed that the petitioner's building is used exclusively tot. Commercial purposes but the levy of betterment tax has been assailed by Mr. Shahenshah Hussain on three grounds The first ground is that in the absence of any betterment of the premises or its improvement by execution of public works, which is neither defined nor provided for in the Act, there is no basis for the levy of betterment tax. Counsel referred to the meaning of the word 'betterment' defined in the Dictionary of English Law by Jowitte, 1959 Editien, Volume I, page 231, as being "betterment or A improvement charge is one levied on increased value of property resulting from improvements effected by a local authority." According to him, `betterment tax' is a special tax chargeable as a consideration for making betterment or improvement to the property assessed, which results in increase in value of the said property by execution of public improvements. He also relied on a statement of the American Law appearing in "American Jurisprudence", 1i'56 Edition, Volume 48, section 21, page 580, to the effect that a special or local assessment is unconstitutional and invalid without a special benefit to the property assessed resulting from special or local public improvements and that such power does not extend to raising general revenue or to reimbursing the treasury for general revenue paid out. But, whatever be the constitutional pesition in United States of America with regard to the power of the State Legislature to levy a local or special assessment, the constitutional position of a Provincial Legislature under the Pakistan Constitution (1973) is clear and explicit. There is no constitutional limitation or restriction on the power of a Provincial Legislature to levy taxes on property situate within the province, it being a subject-matter falling
(1) 1? L D 1977 Say. 714 ' within its exclusive legislative competence. Within its said legislative field, the Provincial Legislature is sovereign and supreme and the validity of any law made by it for assessment of property used exclusively for commercial and industrial purposes is not affected by the existence of a benefit to the property assessed. Unlike a betterment fee, which is payable as a consideration for receiving a benefit or privilege, such as for example, a betterment fee payable under Article 104 of the Karachi Development Authoriy Order, 1957 by an owner of adjoining property which has increased in value as a result of execution of an improvement scheme, a tax is a general levy or exaction imposed upon owners of property for raising revenue in order to defray the necessary expenses of the Government for promoting the general welfare and protection of its subjects and for discharging its public governmental functions. In this sate, the imposition of the charge on all propert used exclusively for commercial or industrial purposes within a peescribed urban area is a tax, and so it has been defined in the said Act. There is no doubt that the object of tax is to raise revenue to make general and local improvement of the urban area, in which the two kinds of property are situated, for the benefit of the pablic at large irrespective of whether ther is any special or particular benefit to the owner of the property assessed. We, therefore, find no force in the first submission of Mr. Shahenshah Hussain.
6. The second ground utged by the petitioner's counsel is that the levy of the betterment tax is discsimivatory in that while owners of conameteial and industrial properties are made liable to payment, the owners of residential premises in the same area are not liable to pay the tax and, therefore, section 3-A of the Act, imposing the levy, coofliets with the fundaraentar right of equal protection of law gearanteed in Aeicle 25(1) of the Coostitu- ton. We have considered this submission and flail no sebstanee in it. As stated earlier, the Provincial Legislature is sovereign within its legislative field aed has a clear, unquestionable and lert,ad power to classify property for purposes of taxation. The Legislature has classified commercial and industrial properties as a group for levy aid collestion of bettesment tax and has left out residential properties from such levy. The former grou of properties is not on par with residential properties. The nature and use of the properties falling in the two groups are different. It cannot also be denied that certain additional facilities and services have to be provided for proper use of commercial and industrial properties, as for example, provision of public foolpaths, public ear parking apace% the widening of roads, public' lighting and several other facilities which are not recessarily to be provided for in the case of rtsidential buildings. In our opinion, the classification of the properties rests on a real and substantial difference between the two group: of properties which bears a just and reasonable relation to the object of the legislation and is neither unreasonable nor arbitrary. Article 25(1) of the Constitution does not forbid classification of properties by the Legislature for purposes of taxation.
What, however, Article 25(1) forbids is that within the classification, there shall be no discrimination end all citizens in similar circumstances have to be treated alike and are entitled to equal protection of law. In this connection their r ordships of the Supreme Court in libefridra Kishore Acharyya Chowdbary and others v. Province of East Pakistan and others (1), while considering the meaning of the expression "equal protection of law" appearing in the corresponding Article 5 of the 1956 Constitution, observed "Equal protection of the laws means that no person or class of persons
(1) PLD 1957 SC (Pak.) 9 ' shall be denied the same protection of the laws which is enjoyed by other persons or other classes in like circumstances, in their lives, liberty and property and in pursuit of happiness. Another generalization more frequently stated is that guarantees of equal protection of the laws requires that all persons shall be treated alike, under like circumstances and conditions, both in the privileges conferred and in the liabilities imposed. In the application of these principles, however, it has always been recognised that classification of persons or thingz is in no way repugnant to the equality doctrine provided the classification is not arbitrary or capricious, is natural and reasonable and bears a fair and substantial relation to the object of the legislation. It is not for the Courts in such cases, it is said, to demand from the Legislature a scientific accuracy in the classification adopted."
' These principles were recently approved and again stated by Chief Justice Elarnoodur Rehman in the Supreme Court in Brig. (Recd) F. B. All atd another v. The State (I) Mr. Shaeenshah Hussain, on whom the enus lies, has net satisfied us that the aforesaid classification of the properties for purposes of levy of betterment tax is arbitrary and unreasonable. We, therefore, reject this submision of Mr. Shahenshah Hussaia.
7. The third and lest ground urged by Mr. Shahenshah Hussain is that the levy of betterment tax in addition to the levy of general property tax on the same property of the petitioner void on the ground of double taxation. Counsel referred to Messrs Star Vacutt,n Bottle Manufacturing Co. Ltd: v.
Collector of Central Excise and Land Customs, Karachi an 2 others (2). In that : ases, the petitioner challenged the imposition of excise duty on componeht parts as well as separately on vacuum flasks made therefrom as a finished article on the ground of double taxation, but the plea was rejected. The case, however, is strictly not relevaat as it was not a ease o double taxation of the same article twice. In the first place, Mr. Shahenshah Hussain has failed to satisfy us that there is a (-Institutional bar or restriction on the Legislature to impose double taxation. In any case, double taxation on property means imposition of the sere kind of tax twice on the owner of the property.
We are satisfied that the nature of the two taxes is different. While the betterment tax is levied on buildings and o lands wed exclusively for commercial or industrial purposes, the property tax levied on the owner under section 3 of the Act is on the basis, not of use, but of gross annual rental value of the building. We, therefore, find no substance in the submission of the learned counsel.
8. The foregoing are the reasens for our order pronounced in Court, whereby ae partly arowed the petition to the extent that the impugned order dated 16.104976, in so far as it restored the G. A. R. V.
Of the premises at Rs 1,56,384 was declared to be without lawful authority and of ro legal effct, while the petition was dismissed in respect of the relief of the declaration as to the illegality of the demand of betterment tax, with no order as to coifs.
(1) P L 1975 SC SC6 (2) PLD 1972 Kar. 210