1. ' By a notification dated the 18th of August, 1975, published in the Punjab Gazette, Part III on the 19th of September, 1975, the Commissioner, Lahore Division, under the powers delegated to him by the Government, sanctioned export tax on Textile/Yarn at the rate of Rs, 0.01 per pound within the jurisdiction of the Zila Council, Sheikhupura, with immediate effect in exercise of the powers conferred on the Government by clause (I) of Article 60 of Basic Democracies Order, 1959, and sub- rule (2) of rule 7 of West Pakistan Local Councils (Imposition of Taxes) Rules, 1961. In pursuance of this notification the Zila Council sought to recover export tax on the Rayon Fibre manufactured and exported out of the District Limits by Messrs Ravi Rayon Limited, Kala Shah Kaku, i,e, the petitioner.
2. ' Aggrieved by the imposition of this tax, petitioner has invoked the writ jurisdiction of this Court to challenge the validity of the order of the Commissioner.
3. ' The first objection is that the Basic Democracies Order, 1959 stood repealed by virtue of section 233 of the Punjab Local Government Act 1975 which came into force in April 1975. Therefore, the Commissioner had no authority under the said Order to issue the notification in question.
4. ' The second objection is that the new rules under the Local Government Act had not been framed when the impugned notification was issued and the old rules referred to in the notification itself had ceased to have effect alongwith the Order under which they had been framed.
5. These two objections, however, are without force inasmuch as a Local Council has the authority under section 138 of the Local Government Act read with the Second Schedule to the Act to impose tax on the export of goods and animals despite the repeal of Article 60 of the Basic Democracies Order.
6. ' It is, however, true that the power under section 138 of the Act is not exactly the same as that under Article t0 of the Order. Under the old law, a District Council could not levy a tax without the previous sanction of the Government whereas under the new law, the power of the Zila Council to levy a tax is subject only to any relevant provision of any other law and not to the previous sanction of the Government. This difference also has a bearing on the question of the validity of the impugned notification.
7. ' So far as the rules are concerned, the rules under the Act were framed on the 16th of October, 1976.
8. Therefore, they are not relevant in this case as the tax in question was levied in August, 1975.
9. ' But, in view of the provisions of section 235 of the Local Government Act, the rules framed under the Order remained in force until the framing of the rules under the Act. Thus. The notification in question was governed by the old Rules. Under rule 7 of the Local Councils (imposition of Taxes)
10. Rules, 1961, the power to sanction a tax proposed by a District Council vested in the Government which power had indisputably been delegated to the Commissioner.
11. ' What the learned counsel for the petitioner contends, in view of the difference between section 138 of the Act and Article 60 of the Order, is that as no sanction of the Government is required under the former, rule 7 of 1961 Rules is inconsistent with the existing law and as such ineffective to that extent.
12. But in view of this contention, which is quite tenable, all that can be held is that the sanction of the Commissioner as contained in the impugned notification was redundant. The question will nevertheless remain as to whether the Zila Council has, apart from the notification in question, levied the export tax in dispute independently.
13. ' I do agree with the learned counsel for the petitioner that after the coming into force of the Punjab Local Government Act, 1975, there was no need for obtaining sanction from the Government or its delegatee, the Commissioner. Now it is to be noted that the Zile Council was superseded before the change of law and the Administrator appointed by the Government has ever since been managing the affairs of the Zila Council.. There is no dispute in this case with regard to the appointment of Administrator. And, In view of subsection (2) of section 235 of the Local Government Act according to which all authorities and all officers who immediately before the enforcement of this Act were exercising functions of Local Councils under the repealed enactments or any other law, should continue to exercise their respective functions till the Local Councils are constituted under the Act, there can be no objection to the exercise of authority by respondent No,
2. Le. The Administrator, Zila Council, Sheikhupura, as no Zila Council has so far been constituted for the District of Sheikhupura.
14. ' Under the old Rules, the Zile Council was supposed, after deciding to levy a tax, to send up a proposal to that effect to the Government or the Commissioner for sanction. The levy would be effective only after the sanction was accorded.
15. ' It is, therefore, clear from the sanction accorded in this case by the Commissioner on the lath of August, 1975, that a decision to levy the tax had already been taken by the Administrator before he submitted the proposal to the Commissioner. The subsequent Act of submitting the proposal to the Commissioner was no doubt unnecessary but this does not mean that the decision arrived at by the Administrator in respect of the imposition of the export tax stood vitiated by the subsequent recourse to a procedure which has been dispensed with by the new law.
16. In my opinion, therefore, the export tax in question was duly levied by the Zile Council within the meaning of section 138 of the Punjab Local Governments Act and the levy become effective from the date it was notified in the official Gazette under sub-rule (2) of rule 7 of the Imposition of Taxes Rules, 1961. This is the only way rule 7 can be re-conciled with section 138 of the Act.
17. ' In short, for the reasons given above, the export tax in question cannot be said to have been levied without lawful authority or to suffer from any procedural defect although the sanction accorded thereto by the Commissioner was no doubt redundant But the notification itself is not without value. It has the effect of notifying all concerned not only of the fact that a tax has been levied but also of the date from which it is effective.
18. There are, however, two more objections worth taking notice of in this case. The learned counsel for the Ravi Rayon Limited contends that the Rayon Fibre manufactured by the petitioner's Company does not fall in the category of Textile/Yarn and, therefore, the notification in question is not applicable to it. But this contention seems to be based on the fact that Rayon fibre is different from a cotton thread.
19. But it is to be noted that the tax has not been levied on the export of cotton thread in particular but on the Textile/Yarn in general. According to the dictionary meaning, textile is something woven or capable of being D woven and yarn means either a spun thread or one of the threads of a rope or these threads collectively. In view of these meanings I see no reason to exclude Rayon Fibre from the scope of Textile/Yarn.
20. The second objection is based on a Government Letter No, SO(v)BD9921/61, dated 24.5-1962 from Secretary to Government of West Pakistan to all Deputy Commissioner, etc. Which purports to forbid the Zila Councils from levying or collecting any tax within the limits of municipal and Town Committees. The learned counsel for the petitioners contends that the petitioner's Company being situate within the limits of Sheikhupura Municipality is exempt by virtue of the said letters from paying export tax on its product to the Zila Council. This argument is fallacious. The tax in question has been levied not on the manufacture or use of the petitioner's product within the limits of the Municipality but on the expert thereof out of the boundaries of the district. In case the Municipal boundary touches the district boundary at some point, the moment the product crosses the boundary of the district at that point, it is also out of the limits of the Municipality. Otherwise it will already be out of the Municipal limits before it is exported out of the district limits. Therefore, the export tax cannot be said to have been levied within the Municipal limits regardless of whether it is collected at the source or at the district boundary.
21. ' In my opinion, therefore, the said letter even if assumed to have any legal effect, has no bearing whatsoever on the validity of the export tax in question.
22. ' For the reasons recorded above this writ petition is dismissed with costs.