' Through the institution of this Constitutional petition, the petitioner has challenged Memo. No, 1525-93/2152-ST(1), dated 9-8-1993, issued by the Member (Revenue), Board of Revenue, Lahore (respondent No,3) relying upon the judgment of this Court rendered in Writ Petition No, 9120 of 1992, whereby the petitioner was restrained from realizing the tax on the transfers made through gift deeds.
2. Brief facts, as narrated in the writ petition, are that Messrs Muhammad Ashraf & Company, sole proprietorship of Muhammad Ashraf, entered into a contract with Municipal Corporation, Gujranwala, for the recovery of tax on the transfer of immovable property in the area of Municipal Corporation, Gujranwala, commencing from 1-7-1993, up to 30-6-1994, for Rs,2,54,25000. According to the petitioner he wa entitled to the collection of tax on the transfer made by way of gifts -except those exempted under rule 9 of the Punjab Local Councils (Tax o Transfer of Immovable Property)
Rules, 1981 (hereinafter referred to as Rules) and as such the petitioner had been collecting tax on immovable property on gift deeds w,e,f, 1-7-1993. One Mubarak Ahmad filed Writ Petition No, 9120 of 1992, challenging the action of the Municipal Corporation, Faisalabad, in realizing the tax on the immovable property on the alienations made by way of gifts. The said writ petition alongwith similar other writ petitions was accepted by the learned Single Judge of this Court vide judgment, dated 18-5-1993, reported as Mubarak Ahma v. Sub-Registrar, District Courts, Faisalabad and 4 others 1993 CLC 1666. It was held in that judgment that the alienations made by way o gifts were not covered under the aforesaid rule 4, therefore, the Municipal Corporation, Faisalabad, was not competent to realize the taxiA on the alienations made on the basis of gift deeds. Against that judgment Messrs Qayyum Khan Ajmal Khan & Company filed I.C.A. No, 221 of 1993 which was admitted to regular hearing, but later on the appellants in that appeal withdrew the I.C.A. On 2-10- 1993, with the result that the aforesaid judgment attained finality. On the basis of the said judgment respondent No,3 issued Memo. No, 1525-93/1252-ST(I), dated 9-8-1993, restraining the realization of tax on the transfers made through the gift deeds. It is the ease of the petitioner that on the basis of the aforesaid notification the petitioner was also restrained from realizing the tax on the immovable property on the alienations made by way of gift deeds even though not falling in the exemption as contained in rule 9 of the said Rules. The petitioner, although was not party to Writ Petition No, 9120 of 1992, yet feeling aggrieved from the results of that judgment filed Intra-Court Appeal No, 330 of 1994, with the permission of the Court. Simultaneously the petitioner also filed the present petition thereby challenging the vires of the aforesaid notification.
3. Intra-Court Appeal No, 330 of 1994, has today been withdrawn by the learned counsel for the petitioner and choose to press and argue the present Constitutional petition.
4. Learned counsel for the petitioner has contended that the learned Judge in Chamber has interpreted rule 4 of the said Rules in isolation with the provisions of other rules and newly-added rule 9 of the aforesaid Rules was not brought to the notice of the learned Judge in Chamber. On the other hand the learned Law Officer has also not seriously opposed the contention raised by the learned counsel for the petitioner and as a matter of fact has conceded to the said provision of law.
5. In the above perspective, we have examined the judgment passed in Writ Petition No, 2190 of 1991 (Annexure B) and the impugned notification (Annexure D) issued on the basis of the judgment passed in the aforenoted writ petition. The learned Single Judge in Chamber after discussing rules, 4, 5, 7 and 8 of the Rules declared "that the act of Registering Officer declining to register the deeds of gift on the ground that the tax under the Ordinance has not been paid is without lawful authority". From the bare reading of Mubarak Ahmad's case (supra) it is evident that rule 9 of the said Rules, substituted vide Notification No,S.O.VI. (L.G.)-97, dated 2-6-1991, was not brought to the notice of the learned Judge in Chamber, as we do not find any mention of the said Rule in Mubarak Ahmad's case. We are of the considered opinion that the learned Judge in Chamber was not properly assisted while hearing Mubarak Ahmad's case inasmuch as the law on the subject, was in force at the relevant time was not considered in the aforestated judgment, which resulted in acceptance of the writ petition in Mubarak Ahmad's case. It would be advantageous to reproduce rule 9 of the Rules which is as under:--- "Exemption.---No tax shall be levied on the transfer of immovable property--
(a) in favour of the Federal or the Provincial Government;
(b) by Tamleek (i,e, gift in favour of legal (heirs) up to 25 acres of agricultural land in rural areas; or
(c) by exchange up to 25 acres of agricultural land in rural area."
6. Upon the examination of rule 9 (ibid) it is clear that certain exemptions have been given on the transfer of immovable property, which include the gifts in favour of the legal heirs and that too up to 25 acres of agricultural land in rural areas. We are of the view that rule 4, on which the learned Judge in Chamber has relied while deciding Mubarak Ahmad's case cannot be read in isolation as the said rule 4 is subject to rule 9 reproduced above, wherein certain exemptions have been given.
Rule 9 exempts the transfer of immovable property made through gift in favour of the legal heirs up to 25 acres of agricultural land. It flows therefrom that this rule has consciously been introduced later on, as under rule 4 of the Rules the tax is obviously, payable on transaction of gifts, therefore, the exemption was granted by substituting rule 9 9f the Rules to the extent of gifts made in favour of the legal heirs of immovable property only to the extent of 25 acres in rural areas, which means that if a gift otherwise made which is not covered under the exemptions given under rule 9 is liable to be taxed.
6-A. Upon the perusal of the contents of the impugned notification (Annexure D) it is evident that the same was issued by respondent No,3 on the basis of the judgment rendered in Mubarak Ahmad's case. As we have held that Mubarak Ahmad's case was decided while not taking into consideration rule 9 of the Rules, therefore, we are of the opinion that the impugned notification has no legal value.
7. For the foregoing reasons, the writ petition is accepted and it is hereby declared that the impugned Notification No, 1525-93/2152-ST(I), dated 9-8-1993, issued by respondent No,3, is illegal, without lawful authority and having no legal effect. Parties are left to bear their own costs.