' This judgment shall decide Writ Petitions Nos. 22208, 22217 of 1996, 9302, 9304, 14478, 8608 of 1997, 12527 of 1999 and 12920 of 1998 as common questions are involved.
2. The petitioners in these cases are Medical Practitioners and are running private hospitals. Vide section 6 of the Punjab Finance Act, 1996, Second Schedule to Punjab Finance Act, 1977 was amended by adding entries mentioned in the First Schedule to the said Punjab Finance Act, 1996.
The entry relevant to the present case is No,8(i) and (ii). The effect of the said amendment is that Medical Consultants or specialists are to pay professional tax at the rate of Rs,5,000 per year while ordinary Medical Practitioners and Dental Surgeons have to pay a sum of Rs,1,000 each year by way of said tax. The other grievance of the petitioner is with reference to section 8 of the Punjab Finance Act, 1996, whereby tax on private Hospitals has been imposed which is to be paid by the Management of said Hospitals at the rate of 5% of the charges of a room where room rent exceeds Rs, 100 per day.
3. Learned counsel for the petitioners contends that the petitioners are already paying income tax levied by the Federal Government and as such any tax on their income cannot be imposed and that too under an enactment of the Provincial Legislature which has no authority to legislate with reference to taxes on income. Regarding the tax on the private Hospitals it is stated that the same is ultra vires of the Constitution inasmuch as it is in derogation of the right of the petitioners to hold a property as guaranteed in Article 23 of the Constitution. Regarding the first mentioned tax it has further been contended that in any case it cannot exceed a sum of Rs, 50 per year as per limit set down by the Federal Legislature.
4. Learned A.A.-G. On the other hand, contends that the imposition of the professional tax is within the competence of the Provincial Assembly. Relies on Article 163 of the Constitution. As to the limits, states that the said Federal eanctment limiting the extent of the said tax has since been amended.
Regarding the tax on private Hospitals, learned A.A.-G. States that the tax is not at all derrogative of the right being asserted by the petitioners.
5. I have given some thought to the respective contentions of the learned counsel and the learned Law Officer of the Province in support of his contention as to the limiation imposed on the extent of the professional tax. Learned counsel has relied on the case of Siemen Pakistan Engineering Company Limited v. The Province of Punjab through Secretary, Revenue Department, Government of Punjab, Provincial Secretariat, Lahore and 2 others (PLD 1999 Lahore 244). I have examiend the said judgment. I find that his Lordship has very elaborately narrated the history of Article 163 of the Constitution of the country relating it back to Article 141 of 1962 Constitution and then to section 142- A of the Government of India Act, 1935 as adopted in the form of Article 276 of the Constitution of India. Article 163 of the Constitution is in the following terms:--
163. Provincial taxes in respect of professions etc.---A Provincial Assembly may by Act impose taxes, not exceeding such limits as may from time to time be fixed by Act of (Majlis-e-Shoora (Parliament) on persons engaged in professions, trades, callings or employments, and no stich Act of the Assembly shall be regarded as imposing a tax on income.
A reading of the said Article would show that cognizant of the fact that under the Constitution it is the domain of the Federal Legislature (Parliament) to enact laws imposing taxes on income, the Provincial Assemblies were given the authority to impose the taxes on persons engaged in professions, trades, callings or employments. Ho ever, this authority was subject to the limits to be fixed by the Federal Legislature by an Act of the Parliament.
6. The said Act of Parliament is the Professional Taxes Limitation Act, 1941. It is the provisions of this Act which are being relied upon by the learned counsel in support of his contention that the said tax cannot exceed Rs,50 per annum which is the limits fixed by the said Act of the Parliament.
7. ' The position that emerges is that by virtue of said Article 163 of the Constitution a Provincial Assembly has the authority to impose the said professional tax, subject to the limits fixed in an Act of the Parliament. The said contention of the learned counsel, inasmuch as he questions the vires of the said provisions of the Punjab Finance Act, 1996, therefore, is not sustainable.
8. As to the limits placed by the Federal Parliament on the extent of the said tax, learned A:A.-G.
Informs that the said Professional Tax Limitation Act, 1941 has since been'amended. However, I find that the said amendment has been effected by means of setion 2 of the Finance Act, 1999 with immediate effect i,e, 30-6-1999. Through this amendment upper limit has been fixed at Rs,1,00,000 instead of 50 per annum.
9. So far as the imposition of the said tax on private Hospitals is concerned, the authority of the Provincial Assembly to impose the said tax has not been questioned. However, the plea taken-is that the said imposition is derrogatory to the right of the petitioners as enshrined in Article 23 of the Constitution. The contention is wholly misplaced. The said right has not been made subject to payment of the said tax. On the other hand, the penalty prescribed for failure to pay the tax is an amount not exceeding the tax payable. At the same time a remedy has been provided under section 8(5) of. The Punjab Finance Act, 1996 in the forum of a revision to V Director-General, Excise and Taxation' who has been empowered to satisfy himself as to the legality or propriety of any proceedings or order held or passed by the subordinate authority and to pass such order_ in relation thereto as he thinks fit. This of course is with reference to the assessment and quantum of the tax.
10. In view of the above discussion all these writ petitions are partly allowed inasmuch as it is held that the professional tax imposed by the Provincial Assembly could not ve exceeded a sum of Rs, 50 per an a. Any demand or recovery of the said the in excess of the said amount of Rs,50 per annum before 30-6-1999 i,e, the date the amendment. Was effected in section 2 of the Professional Tax Limitation Act, 1941 vide section 2 of the Finance Act, 1999, is declared to be without lawful authority and as such void. The writ petitions inasmuch as they question 'the tax on private Hospitals are dismissed. The parties to bear their own costs .