1. ZAHID KURBAN ALAVI, J.---By this judgment we shall dispose of the above petition. Basically the facts of the case are that the petitioner is a charitable trust and runs a hospital known as Dr. Ziauddin Hospital. The petitioner as required under the law applied for grant of exception from payment of property tax to the relevant authority. The application was rejected by order dated 29- 6-1998 passed by the Director, Excise and Taxation. The application was rejected on the following grounds:
(1) The trust was not registered.
(2) Accounts were not audited.
(3) It was not a charitable hospital and therefore, did not fall within purview of section 4 of the Sindh Urban Immovable Property Tax Act, 1958. The petitioner thereafter got the trust registered and also got the account audited. Having complied with the objection that has been raised as far as 1978 the petitioner again applied for exemption in the year 1986. The Director, Excise and Taxation was pleased to issue exemption certified by under dated 13th April, 1986. The next year a fresh application was filed but a new director had been appointed who rejected the application on the following grounds:
(1) It was not charitable organization.
(2) It was a commercial enterprise.
(3) That the application made under section 4(f) of the Sindh Urban Immovable Property Act was incorrect as the section since it stipulated was negative section that property tax exemption shall not be allowed to institution which fall within its purview. Against this order revision was filed which was rejected and hence the Constitutional petition was filed. In this petition amongst various grounds taken, the petitioner has urged that the hospital received rent from various specialists who were occupying the space and the rent so received was spent for charitable purpose. In fact the amount spent on free treatment of patients was more than the income from the rent. It was urged further that exemption was once granted after taking into consideration all factors and therefore, the subsequent cancellation of the exemption in utter disregard of rule 24 of the Sindh Urban Immovable Property Tax Rules was illegal. The petitioner has also relied on the exemption granted in the Karachi area to the Seventh Day Adventist Hospital, Holy Family Hospital, Liaquat National Hospital and Agha Khan Hospital etc. According to them it is clear-cut case of discrimination especially when the petitioner has fulfilled all the requirements of section 4(f) of the Act. Withholding of exemption and then granting the same and consequently cancelling the same is illegal. The respondents had appeared and have merely repeated the arguments put forth by the Director Excise and Taxation in his impugned order. They have also taken a stand that the nature of the petitioner's Trust is that of Waqf-alal-Aulad, which is not for public purpose hence no exemption can be granted. They have also insisted that the order passed and the reasons given for rejection are correct. We have considered all the arguments put forward by the counsel for the petitioner, who inter alia has urged that the petitioner has fulfilled the criteria as laid down by the respondents and hence was given the exemption earlier under section 4(f) of the Sindh Urban Immovable Property Tax Act, 1958, which was withdrawn without resorting to the rule 24 of the said Urban Immovable Property Rules of 1958. Such exercise of discretion is arbitrary and illegal.
2. The point has been raised by the respondent that the Trust is not a ITrust meant for public purpose.
3. It is observed that this interpretation of the respondents is alien as well as strange and contrary to not only the governing statute that is, The Sindh Urban Immovable Property Tax Act, 1958 (section 4), which deals with various categories of exemptions but does not afford any such bar or explanation, as well as the other relevant law .Viz. The Mussalman Waqf Validating Act, 1913. Section 3 of the Mussalman Waqf Validating Act, 1913 reads as under:--
4. (a)
3. "Power of Mussalmans to create certain Waofs.--It shall be lawful for any person professing the Mussalman faith to create a Waqf, which in all other respects is in accordance with the provisions of Mussalman Law. Provided that ultimate benefit in such cases expressly or impliedly is reserved for the poor or for any other purpose recognized by the Mussalman Law as a religious, pious or charitable purpose of a permanent character." By having a look at the Trust Deed it is very clear that the objective of the Trust so created is for public purpose. In a reported case between Pakistan v. Province of Punjab reported in PLD 1975 SC page 37, regarding the issue that the cantonment boards and the lands in the cantonments vested in the Government of Pakistan and recorded as such in the central and revenue registers were not liable and had at no time been liable to pay any tax under the West Pakistan Urban Immovable Property Tax Act, 1958, the Hon'ble Supreme Court while interpreting the term "public purpose" on page 45, para. F, has held " for, there is no dispute that if the property is used for a valid public object, then the mere fact that a fee is charged for such user will not render the user nonpublic or convert it into a mere profit making venture", This view also finds its support from the Privy Council case reported in AIR 1914 PC page 20 under the title Hamabai Framjee Potit v. Secretary of State for Indian-in Council. The latter has been termed as a classical case for defining the word public purpose' by the Hon'ble Supreme Court.
5. Such withdrawal of exemption once granted is also without lawful authority and abuse of the discretion conferred upon the respondents, as earlier exemption was granted to the petitioner after fulfilling the laid down criteria by the respondents themselves. The respondents should not change their position in an arbitrary and whimsical manner. The petitioner has drawn our attention to the principle of locus poenitentiae as evolved by the Hon'ble High Courts and Supreme Court, wherein it has been held that " once a right is created in favour of a litigant, in due course of time, it cannot at all be taken back arbitrarily". In a reported case 1997 SCMR page 15 Chairman, Selection Committee/Principal, King Edward Medical College, Lahore v. Waqif Zamir Ahmed: the petitioner had urged that on account of computer error the respondent No, 1 's name appeared in the list. The impugned judgment of the Hon'ble Lahore High Court has maintained that the petitioners cannot be allowed to disown their earlier action whereby respondent No,1 was accommodated by giving him admission. The Hon'ble Supreme Court while refusing the leave to the petitioners and upholding the impugned judgment of Lahore High Court had also discussed the other cases decided by the Hon'ble Supreme Court viz., Chief Secretary, Government of Sindh and another v. Sher Muhammad Makhdoom and 2 others PLD 1991 SC page 973 and Pakistan v. Muhammad Himayatullah Farukh PLD 1969 SC page 407.
6. The respondents sued in law and fact by failing to distinguish between the income generated by the petitioner Hospital and the rent. Under the statute for seeking the exemption from payment of Urban Immovable Property Tax under section 4(f)(I) the rent must be exclusively applied to religious or specified charitable purposes. In the case of Dawood Foundation v. Excise and Taxation, Sindh, Karachi and another PLD 1977 Karachi page 120 the petition was allowed and the word Rent has been defined on page 129-A and B as ".... We would construe 'rent' for the purposes of the Act to mean any monies or consideration payable periodically or on stated occasions by or on behalf of the tenant to his landlord for the use and occupation of the property comprised in his tenancy, including any facilities that necessarily go with the tenancy, whether separate charges for such facilities are made or levied or are included in the rent deed or agreement".
7. "... ...We are therefore, of the opinion that rent in the case of Dawood Centre, includes air- conditioning and service charges."
8. The exemption clause of the Statute that is, section 4(f) contains the word "including", which under the rules of interpretation has to be given a wider meaning and not a narrow approach as adopted by the respondents. In the case of Don Basco High School v. The Assistant Director, E.D.B.I. PLD 1989 SC page 128 at page 134(G)--The word "include" is said to be very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statutes.
9. In the case of Shoukat Ali Qureshi v. Province of Punjab reported as in 1998 CLC 1997 at page 2001, the exemption from payment of urban immovable property tax was also extended to the retired Government employees of Federal Government by treating them at par with this of Provincial (Punjab) Government. In a later development during the pendency of the case, the respondent No,1 vide Order dated 13- 7-1993 granted exemption to the Agha Khan Hospital and Medical College Foundation, Karachi by setting aside the order dated 2-3-1993 of the respondent No,2. Last para. Of the respondent No,l's order is noteworthy, wherein the exemption was given to Agha Khan inter alia, on consideration of the earlier exemption afforded to Agha Khan, but in the present petitioner's case an altogether different criterion was adopted by the respondents, which is not only discriminatory and inequitable but also clothed with mala fide and violative of Article 25 of the Constitution of Pakistan, 1973. It is submitted that in spite of the amendment made by the Finance Act, 1996 the Agha Khan Hospital and the Medical College Foundation, Karachi are still exempted from payment of the requisite tax, which act of the authority ex facie is discriminative and violative of the rights of the petitioner under Articles 4, 8 and 25 of the Constitution.
10. By virtue of Finance Act, 1996 the words 'hospitals, dispensaries' have been omitted from the section 4(f) of the Sindh Urban Immovable Property Tax Act, 1958. The omission in the Act does not change the complexion inasmuch as the rules framed thereunder. The Act still applies to the petitioner inasmuch as the petitioner being a public charitable institution is entitled to exemption under rule 24 of the Sindh Urban Immovable Property Tax Rules, 1958 irrespective of the omission in the Finance Act, 1996. The prescribed charitable institutions have not been omitted in Rule 24 which reflects that the intention of Legislature to exempt these institutions was always there. In these circumstances the discretion which ought to be exercised fairly, justly and with rationality by the authority still rests with the Deputy Director, Excise and Taxation who can grant the exemption. Based upon the above submission we are of the view that relevant authorities under the law are bound to grant exemption to the petitioner being a charitable institution which fact has not been disputed by the authorities. The prescribed Charitable Institutions are mentioned under Rule 24 of the said Urban Immovable Property Rules of 1958.
11. Even otherwise the case of the petitioner is to be dealt in accordance with the statutes as it stood unamended on the day when the subject petition was filed. The petition is accordingly allowed as prayed.
12. (Sd.)
13. ZAHID KURBAN ALAVI, J. SAIYED SAEED ASHHAD, C.J.--I have gone through the judgment proposed to be delivered by my learned brother Zahid Kurban Alavi, J. I am in agreement with him with regard to his conclusion that the petition is allowed as prayed. However, there are a few things, which I would like to clarify. The petitioner in the aforesaid Constitutional petition had asked for exemption from being charged to property tax in view of the provision ofsection 4(f) of the Sindh Urban Immovable Property Tax Act, 1958 (hereinafter referred to as the said Act) on the ground that they are a charitable trust and their property/building has been specifically exempted from charge to property tax. They had prayed for quashment of the order dated 30-12-1985, whereby the petitioners were refused the exemption in view of section 4(f) of the said Act as well as refund of the property tax paid by them in view of the assessm ent made by the concerned Assessing Officer. My learned brother has examined in detail the relevant provisions of the said Act, the Mussalman Waqf Validating Act, 1913 as well as the case law and had come to the conclusion that the petitioner trust was created for public purpose and the mere fact that certain rooms in the building were rented out to doctors would not render the user of the building from public purpose to a profit-making venture and I find myself in agreement with him. However, reference to the Sindh Finance Act, 1996, whereby the exemption granted to charitable institutions, hospitals, dispensaries etc., from charge to property tax was withdrawn is uncalled for as in deciding the aforesaid Constitutional petition the same did not require to be considered as the petitioner in their petition have asked for the exemption prior to the period from which the said exemption was withdrawn. The consequences of amendment of section 4(t) of the said Act by the Sindh Finance Act, 1996 would be required to be considered while determining the question of exemption for the assessment year 1996-97 and onwards.It was observed by my learned brother that irrespective of the fact that section 4(f) of the said Act was amended and exemption granted to the charitable institutions, hospitals, dispensaries etc., from charge to property tax was withdrawn, Rule 24 of the Sindh Urban Immovable Property Tax Rules (hereinafter referred to as the said Rules) was not modified or amended and continued to be in force, according to which charitable institutions, hospitals, dispensaries, etc., were to be granted exemption from charge to property tax. However, it is to be noted that it is a well-settled principle of law that in case of inconsistency in the provisions of a statute and the rules made thereunder, the provisions of the statute would have precedence and would be given effect to over and above the Rules, if it is impossible to reconcile the inconsistency and the conflict in the statute and the Rules.
14. In the circumstances I do not find myself in agreement with the observations that Rule 24 of the said Rules, which provides the mode and the manner in which exemption was to be given or provided to the institutions mentioned in section 4(t) of the said Act prior to its amendment would continue to provide the benefit of exemption to the petitioner until and unless the same is modified and brought in consonance with the amendment in section 4(t) of the said Act. If this be so, then the very amendment in section 4(f of the said Act would be rendered nugatory and surplus which is not permissible by any canon or principle of interpretation of statute. With the above observations I agree with the decision of my learned brother that the petition is allowed as prayed.
15. (Sd.)
16. SAIYED SAEED ISHHAD, C.J.