DEEDAR HUSSAIN SHAH, J.---This judgment shall dispose of the abovementioned appeals and miscellaneous applications, as common questions of law and facts are involved therein.
2. The appellants have called in question the legality and validity of imposition and collection of tax on annual value of property within Islamabad by Capital Development Authority (CDA). The property tax was levied in Islamabad and rates thereof were notified vide S.R.O No,806, dated 20-8-1991. Another Notification, S.R.O. 805(1)/91, dated 20-8-1991 was also issued whereby area within which the C.D.A. Could exercise powers under subsection (1) of section 15-A of the Capital Development Authority Ordinance, 1960, was specified.
Thereafter, another notification was issued vide S.R.O. 619(1)/94, dated 16-6-1994, whereby rates prescribed by notification S.R.O. 805, dated 20-8-1991, were declared to remain effective until further orders. The C.D.A.
Issued property tax bills for the years 198990 to 1994-95. The matter was taken to the Ombudsman by certain persons and the Ombudsman declared that the Property Tax would not be recovered from a date previous to issuance of notification dated 20-8-1991. Subsequently, the appellants filed different Constitutional petitions in the Lahore High Court. On 29-6-1995 the learned High Court dismissed the writ petitions and the relevant paragraphs of the impugned judgment, passed in Writ Petition No,1225 of 1994, are reproduced below:- "13. The petitioners had termed the property tax as inequitable and oppressive. The property tax is being imposed on urban immovable properties throughout the country. It is collective responsibility of the citizens to maintain their cities or at least to share the burden of upkeep of the towns they live in. The imposition and collection of property tax by C.D.A. Is neither inequitable nor unreasonable.
14. The petitioners also urged that the C.D.A. Had imposed property tax relating to period before issuance of notification on 20th August, 1991 which according to them was not lawfully done. Learned counsel for the respondents have conceded that C.D.A. Was not competent to levy property tax before issuance of notification but submitted that validation of recovery of property tax effected before 21-8-1991 was being sought for from the Parliament which so far has not been given. In case the Parliament does not validate the act of C.D.A. Whereby recovery of property tax was effected before the issuance of notification dated 21-8- 1991, C.D.A. Would adjust the property tax so recovered in future.
15. For the foregoing reasons it is held that property tax was levied and collected by the C.D.A. Under proper authority of law and valid notification in this regard was issued. The petitions are considered to be without merit and the same are hereby dismissed without any order as to costs."
3. Leave to appeal was granted by this Court vide order, dated 6-12-1995, the relevant part whereof reads as under:- " The C.D.A., according to the petitioners, having been assigned only functions of a -Municipal Committee under Municipal Administration Ordinance of 1960, had no authority to levy property tax on urban properties.
The above contention alongwith various other contentions raised in the case require examination and we, accordingly, grant leave to appeal. The recovery of the property tax on properties belonging to the petitioners is stayed subject to the condition that the petitioners shall furnish security equal to the amount of property tax demanded by the C.D.A. To the satisfaction of 'Nazirof Lahore High Court, Rawalpindi Bench, Rawalpindi."
4. Mr. Abdul Hakeem Khan, learned counsel for the appellants, inter alia, contended that under section 15-A, which was inserted in the Ordinance in the year 1966, some of the functions of Municipal Committee, which it performed under the provisions of the Municipal Administration Ordinance, 1960, were assigned to the C.D.A.
Within the specified limits of Islamabad Capital Territory; that under the Municipal Administration Ordinance of 1960 no power is available to a Municipal Committee to levy property tax on urban immovable property, which is levied under the provisions of Urban Immovable Property Tax Act, 1958; that the C.D.A. Having been assigned only functions of a Municipal Committee under Municipal Administration Ordinance of 1960, had no authority to levy property tax on urban properties; and that prima facie the imposition of property tax is unlawful, illegal and without any lawful sanction/authority. In support of his contentions, the learned counsel has cited Government of N,-W.F.P. Through Chief Secretary and another v. Muhammad Irshad and 3 others (PLD 1995 SC 281), Messrs Elahi Cotton Mills Ltd, and others v. Federation of. Pakistan through Secretary, Ministry of Finance, Islamabad and 6 others (PLD 1997 SC 582) and referred to sections 14-A and 14-C of the Wealth Tax Act, 1963.
5. Mr. Ahmad Raza Khan Qasuri, Advocate/appellant adopted the arguments of Mr. Abdul Hakeem Khan, Advocate and further submitted that under Article 77 of the Constitution no tax shall be levied for the purpose of Federation except by and under the authority of Act of Parliament; that since section 15(A) of the C.D.A.
Ordinance is ultra vires of the C.D.A. Ordinance and the Constitution of Pakistan, the property tax could not be levied by the respondents.
6. Mr. Dil Muhammad Tarar, learned counsel, also adopted the arguments of Mr. Abdul Hakeem Khan, Advocate.
7. Mr. Bashir Ahmad Ansari, learned counsel for the respondents contended that section 15-A was legally incorporated in C.D.A. Ordinance, 1960 by an Act of Parliament, as such by virtue of section 15-A various provisions of Municipal Administration Ordinance, 1960, automatically became part of C.D.A. Ordinance on the principle of legislation by reference. He submitted that likewise section 60 of the Cantonments Act, 1924, whereby on the same principle had empowered the Cantonment Boards to impose such taxes, which can be imposed by the municipality in the Province. He argued that C.D.A. Was empowered under section 33 of the Municipal Administration Ordinance to impose taxes which were enumerated in the Third Schedule and levy of tax on annual value of buildings or land had lawfully been done; that the tax was legally levied by the C.D.A. For which sanction of the Federal Government was also accorded. The notification about imposition of property tax was published in official Gazette after the Federal Government had accorded sanction. Learned counsel pointed out that tax proposal was duly published in newspapers and after going through the same, a large number of people filed objections, which were heard and considered during the proceedings by the competent forum; that C.D.A. Was providing necessary civic amenities to the residents of the Capital and property tax so realised met only a small percentage of the C.D.A's, expenditure in this regard; that the Capital Development Authority was originally set up as an Agency to develop the Capital of the country.
Subsequently, C.D.A. Ordinance XXIII of 1960, was amended by section 4 of C.D.A. (Amendment) Act XXII of 1966, whereby section 15-A was inserted in it and that the tax so imposed by the respondents is lawful tax, therefore, the appeals may be dismissed.
8. We have heard learned counsel for the parties and have perused the files. During the arguments, this Court made an inquiry from the learned counsel for the appellants as to whether Urban Immovable Property Tax Act, 1958, is applicable to Islamabad, or the appellants have ever made payment to the concerned agency under the provisions of the Act? Their frank reply was that neither the Act is applicable to Islamabad nor uptil now they have made any payment towards the urban immovable property tax.
9. In order to resolve the controversy involved in these matters, it is more pertinent to refer here section 15-A inserted to the C.D.A. (Amendment) Act, which reads as under:-- "15-A.--(1) During such period and for such areas within the Islamabad Capital Territory as the Central Government may, be notified in the official Gazette, specify, the authority may, notwithstanding anything contained in any other law for the time being in force, exercise and perform such powers and functions as a Municipal Committee may exercise and perform in relation to a Municipality under the Municipal Administration Ordinance, 1960.
(2) For the purpose of subsection (1), the provisions of sections 18, 33 to 73, 77 to 106, 109, 115 to 118 and 122 of the Municipal Administration Ordinance and the Second, Third and Fifth Schedules thereto shall, so far as may be, apply to the Islamabad Capital Territory as they apply to a municipality, reference therein--
(a) to or to the powers and functions of, Controlling Authority being omitted; and
(b) to Municipal Committee and Government being construed respectively as reference to the Authority and the Central Government."
By insertion of the above section it is crystal clear that C.D.A. Has been authorised to perform functions and exercise powers of a Municipal Committee under the Municipal Administration Ordinance, 1960, in the area of Islamabad Capital Territory. Section 15-A further empowers the C.D.A. To act as a municipal body subject to necessary control by the Federal Government. The provisions of Municipal Administration Ordinance, 1960, which have been made part of C.D.A. Ordinance under the principle of legislation by reference include sections 33 and 34 of the Municipal Ordinance, read as under:-- '
"Chapter II-Municipal Taxation.--33. Municipal Taxation.---A Municipal Committee, with the previous sanction of the Government, may levy, in the prescribed manner, all or any of the taxes, rates, tolls and fees mentioned in the Third Schedule.
34. Notification and enforcement of Taxes.--(1) All taxes, rates, tolls and fees levied by a Municipal Committee shall be notified in the Official Gazette and unless otherwise directed by the Government, shall be subject to previous publication."
The bare reading of the above provisions read with section 15-A makes it clear that C.D.A. Has been empowered to levy various tax etc., which find mention in Third Schedule. Entry No,1 of Third Schedule reads as under:-- "TAXES; RATES; TOLLS AND FEES WHICH MAY BE LEVIED BY .A MUNICIPAL COMMITTEE (See section 33).
(1) Taxes on the Annual Value of the buildings and lands."
10. Now we would like to dilate upon the citations referred to by the learned counsel for the appellants. In Government of N.-W.F.P., through Chief Secretary and another v. Muhammad Irshad and 3 others (supra) the validity of Regulations Nos.1 and 2 of 1975, made by Governor, N.-W.F.P. Was challenged before this Court. The Province of West Pakistan was dissolved by President's Order No,1 of 1970 w.e.f, 1st July, 1970. By Paragraph 4 of the Order read with the relevant entries in the Schedule to the said Order, the territories of Swat and Dir States which were formerly semi-independent States were included in the North-West Frontier Province, with the approval of the President, made a number of Regulations, beginning with Regulation No,1 of 1971, whereby a number of statutes which were in force in the other parts of the Province were extended to these territories.
The statutes so extended included the Evidence Act, Criminal Procedure Code, Pakistan Penal Code, Civil Procedure Code, Civil Courts Ordinance, Suits Evaluation Act, Contract Act, Arbitration Act and Transfer of Property Act, furthermore, the Courts of Magistrates, Civil Judges and District and Sessions Judges were set up to administer the above laws. The said Courts are still functioning in the Areas. In Messrs Elahi Cotton Mills Ltd. And others v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and 6 others (supra) 294 appeals were filed against the judgments of various Division Benches and Single Benches of the Lahore High Court passed in different writ petitions mentioned in the title of the abovesaid appeals, which were agitated before this Court. The brief facts of these appeals were that the Finance Act, 1991 (Act No,XII of 1991), which was assented to by the President on 20-6-1991 was gazetted in the Gazette of Pakistan, Extraordinary, Part I on 27-6-1991, incorporated, inter alia, section 80-C and section 80-D in the Income Tax Ordinance, 1979. Subsection (1) of the former section imposed tax on income of certain contractors and importers on the basis of the amount referred to in subsection (2) thereof that was received by or accrued or arose or was deemed to accrue or arise to any person being a resident. It was also stated that the whole of such amount shall be deemed to be income of the said person and tax thereon shall be charged at the rata specified in the First Schedule. Whereas subsection (1) of the latter section (i.e, section 80-D) laid down that "Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where no tax is payable by a company resident in Pakistan or the tax payable is less than one-half per cent. Of the amount representing its turnover from all sources, the aggregate of the declared turnover shall be deemed to be the income of the said company and tax thereon shall be charged in the manner specified in subsection (2)". Subsection (2) thereof provided that the company referred to subsection (1) shall pay as income tax--
(a) an amount, where no tax is payable, equal to one-half per cent. Of the said turnover; and
(b) an amount, where tax payable is less than one-half per cent. Of thesaid turnover, equal to the difference between the tax payable and the amount calculated in accordance with clause (a).
In order to decide the issue this Court in its celebrated judgment held that no exception can be taken to the impugned sections 80-C and 80-D of the Ordinance as they do not suffer from any Constitutional infirmity, as such the above appeals had no merit and were dismissed.
11. With regard to the Wealth Tax Act, 1963, its sections 14-A and 14-C read as under: "14-A.Payment of tax on the basis of return.---Every person who is required under this Act to furnish return of wealth shall pay the tax payable, on the, basis of such return, on or before the date on which he is so required to furnish return: (Provided that where such person has paid any sum under subsection (1) of section 13-D, the Wealth Tax Officer shall adjust the said sum against the tax payable under this section."
14-C. Tax on ownership of certain immovable assets.---(1) Notwithstanding anything contained in this Act, every person who owns an immovable asset referred to in clause (d) of subsection (1) of section 14 shall pay wealth tax at the rates specified in paragraph B of Part II of the First Schedule: Provided that nothing contained in this subsection shall apply to widows, orphans below the age of twenty- five years, pensioners and disabled persons: Provided further that nothing contained in this section shall apply in respect of any assessment year commencing on or after the first day of July, 2001; and
(2) The tax under this section shall be payable by way of advance tax in accordance with the provisions of sections 13-A and 13-D, shall be deemed to be the minimum amount of tax payable under this section and where the final tax liability determined under this Act exceeds the amount paid, if any, under the aforesaid provisions, the amount so paid shall be adjustable against the final tax liability of the assessee."
12. The question involved herein is the imposition of the property tax by the C.D.A. We have perused the case- law as well as the provisions of the Wealth Tax Act, 1963, cited by the learned counsel for the appellants. In Government of N.-W.F.P.'s case (supra) this Court discussed on the scope of, the Regulations promulgated by the Governor of N.-W.F.P. Whereby certain laws were made applicable to the former States of Dir and Swat and under the facts and, circumstances this case is not relevant to these appeals; whereas in Elahi Cotton Millscase (supra) this Court decided the appeals pertaining to the payment of income-tax under the Income Tax Ordinance. In any case if a person/company/authority is liable to pay the income-tax, such amount, in any manner, does not give exemption to any one from the payment of tax payable under the other special and local laws such as tax payable under the Urban Immovable Property Tax Act. Furthermore, payment of wealth tax also does not exonerate from payment of other tax/levies, particularly the payments under the Urban Immovable Property Tax Act. Moreover, the provisions of the Wealth Tax Act, 1963 show as to how the wealth tax is to be paid. Under the circumstances, in our humble opinion, the case-law and the provisions of the Wealth Tax mentioned hereinabove are not relevant for the decision of the appeals in hand. We have also gone through S.R.O. 806(1)/91, dated 20-8-1991, which reads as under: "S.R.O. 806(I)/91.--In exercise of the powers conferred by Rule 6(1) of the Capital Development Authority (Imposition of Taxes) Rules, 1981, the Federal Government has sanctioned levy of property tax in Islamabad with immediate effect at the rates and on the conditions given below:-- A. I.Industrial/Institution Plot Area (Per Annum) Re.0.50 per sq.Yd.
Covered Area. (Shed) Re.0.50 per sq.ft Covered Area (Buildings) Re.0.80 per sq.ft.
II. Pesidential Plots Plot area. Re.1.00 sq.yd. Covered Area Re.1.50 per sq.ft.
III. Commercial Plots Plot area Rs,3.00 per sq.yd.
IV. Petrol Pump On Plot Area only. Rs,10.00 per Sq.yd.
B. Full/Part exemption from Property Tax To the following categories:-
(1) Residential Buildings for self- 50% of payable tax occupation.
(2) One house of widow with no other ostensible means of income (Plot area not more than 111 sq.Yd.)No tax.
(3) Places of public worship (which have no commercial attachment). No tax.
(4) Government/semi-Government owned buildings used for educational purposes.No tax.
(5) Public Library. No tax.
(6) Government/semi-Government owned hospital and dispensary buildings. No tax.
(7) Self-occupation house of retired 25% of payable tax Government/semi- Government servants if it is their only built-up property.
(8) Federal/semi-Government office buildings (Non-commercial). No, tax.
2. The above rates shall be operational for a period of three years. (No,8/9/90- CDA.II).
Muhammad Sarwar, Section Officer."
There was a further amendment by S.R.O. 619(1)/94, dated 16-6-1994, which reads as under:-- "In the aforesaid notification for paragraph 2 the following shall be substituted:-- The above rates shall be operational until further orders."
13. The property tax imposed hereinabove is very nominal in comparison to the rates of property charged by the authorities under the provisions of Urban Immovable Property Tax Act in all over the country. Moreover, Part B of the S.R.O. Provides exemption, which appears to be reasonable, rational and wise. The tax levied by the respondents is within the legal parameters of section 15-A read with sections 33, 34 alongwith Schedule III referred to above. The tax in question has been imposed after observing all proper and legal formalities required under the law and with the sanction of the Government. The C.D.A. Is also providing necessary civic amenities to the people, which are normally provided by the Local Councils, with the result that Islamabad is very neat and clean area of the country. So far as the contention of Mr. Ahmad Raza Khan Qasuri, Advocate, that under Article 77 of the Constitution tax is not to be paid for the purpose of Federation, is concerned, in any case, the tax has not been charged for the Federation and further, as mentioned above, the amendment made in the CDA Ordinance, by insertion of section 15-A, is quite legal and within the established principles of law.
14. We have also gone through the impugned judgment, whereby each and every objection and contentions raised by the appellants have duly been considered, analysed and examined by the learned Judge of the High Court in Chambers with sound, cogent and plausible reasons.
15. In view of what has been stated above, we are of the considered opinion, that these appeals are without merit and substance, which must fail and the same are hereby dismissed alongwith the listed applications.