' ZAHID KURBAN ALVI, J.---In the above petition the petitioner has prayed as follows:
(i) The impugned order dated 16-11-1999 passed in Revision No,98 of 1990 by respondent be declared having been passed without lawful authority and of no legal effect and the same be set aside.
(ii) Declare the demand of the respondent No,3 to levy property tax on the Properties bearing Nos.
RC 1/12 and RC10/12 as illegal, without jurisdiction and of no legal effect.
(iii) That the respondents Nos.2 and 3 be restrained from giving effect to their threatened action under final notice dated 9-4-1999 and they be restrained from taking any coercive action in pursuance of said notice.
(iv) Cost of the petition.
(v) Any other relief or reliefs which this Honourable Court may deem fit in the circumstances of the case.
2. Briefly the facts of the case are that according to the petitioner, under section 6 of the Act XIII of 1975 all Evacuee Trust Properties vest in the Federal Government. The Federal Government in turn has constituted a Board to look after the properties. This was done under the Evacuee Trust Properties, Management and Disposal, Act (13 of 1975). It seems that the Board with the approval of the Federal Government executed a conditional lease for a period 30 years in respect of Plot No,RC1/12 Baba-e-Urdu Road, Karachi. The lease was executed with the petitioner who was also authorized to demolish all the constructions at his own costs and to raise new constructions in accordance with the approved plan. The properties alongwith the new constructions would be transferred back to the Federal Government on the expiry of 30 years. During the period of lease the petitioner is stopped from mortgaging, alienating or in any other manner encumbering the property. It is the case of the petitioner that for all practical purposes the superstructure is owned by the Federal Government and the petitioner only enjoys the possession for a limited period.
3. Similarly another Plot No,RC-10/12 was also leased in favour of the petitioner by the Board. Once again the old construction was demolished and new construction was raised as per approved plan. In respect of this plot, however, some of the occupants filed writ petition questioning the action of respondents 1 and 4. These were Constitutional Petitions Nos. 533 of 1986, 534 of 1986 and 555 of 1986.
4. The respondent No, 3 who is the authority under the Urban Immovable Property Tax and who is competent to impose/levy property tax assessed the abovementioned properties and levied property tax on the two units. The petitioner insisted that since the properties were owned by the Federal Government, therefore, they were exempt from the levy of property tax under section 4 of the Urban Immovable Property Tax Act. Ultimately a show-cause notice was issued and a revision was filed against the order before the Secretary, Excise and Taxation. The said revision petition remained pending. From 1990-1999. In between the demand to pay the Property Tax was continuously made upon the petitioner. Ultimately the revision petition was rejected and the present petition has been filed.
5. The petitioner has assailed the order purely on the ground that the owner of a property was required to pay the property tax. In this case the owner being the Federal Government Property Tax on Federal Government was exempt, and therefore, the orders passed were illegal. He had also pointed out to Article 165 of the Constitution of Pakistan in which the property vested in Federal Government are not liable to Provincial Government Tax.
6. After the petition was filed the comments were filed by the respondents. The respondent No, 4 in his comments on behalf of the Evacuee Trust Property Board supported the contentions of the petitioner and has insisted that even though the plot in question was leased out for the period of 30 years, it was owned by the Federal Government and on expiry of 30 years it would revert back to the Federal Government including the new constructions.
7. Parawise comments were also filed by the respondents 2 and 3. According to the respondents 2 and 3 they have denied the contentions raised in the petition and have insisted clause 12 of the lease be looked into. It is clearly stated therein that the liability of payment of Water Tax, Electricity, Sui Gas and other charges and all taxes shall be of the lessee. Furthermore, they have also stated that under section 2(e) of the Immovable Property Tax Act the lessee is taken to be the owner of the property.
8. Mr. Obaidur Rehman learned counsel appearing on behalf of the petitioner whilst arguing in this matter drew the attention of this Court to the concept of the word 'lease'. He insisted that under section 2(e) of the Urban Immovable Property Tax Act owner has been defined. However, the petitioner is not the owner, only the lessee having a lease agreement for a specified period. The dispute is restricted as to whether the lessee who is enjoying the property for 30 years is an owner within the meaning and scope of the Act. He also pointed out that there is an officially appointed Board which is supposed to manage all Trust properties. Therefore, under no remote possibility the petitioner could be construed as an owner. Whilst enlarging his arguments he insisted that there would be a difference between a conditional lease and a lease in perpetuity. He also dilated on the fact that the possession may be with the petitioner but it definitely vests with the Federal Government.
9. In the case of Pakistan v. Province of Punjab and others reported in PLD 1975 SC page 37 at 45 it was held: "In support of the contention that the word 'vest' used in section 108 of the Cantonments. Act is a word of variable import not having a fixed connotation and does not necessarily mean `vest in title', learned counsel has referred us to a decision of the Indian Supreme Court in the case of the Fruit & Vegetable Merchants Union v. The Delhi Improvement Trust (1). We have no cavil with the proposition that the word 'vest' does not, by itself, connote 'vest in title'; but where it is used in conjunction with the word 'belong we find it difficult to give it any other meaning. The words used in section 108 of the Cantonments Act are as already pointed out, 'shall vest in and belong to that Board' and, therefore, the clear implication of these words is that they not only vest in possession but also in title. In any event, the decision in the case cited is based not so much on the meaning of the word 'vest' but on the construction of the agreement by which the land in dispute in that case was conveyed by the Government to the Trust. The works used were 'the Trust shall hold and manage the said Nazul Estate on behalf of the Government' and, in these circumstances, Indian Supreme Court felt that the agreement could not be construed as transferring the title of the Nazul Lands from the Government to the Trust.'
10. In the case of Abdul Hafeez alias Bacha Meha v. Ashraf All Choudhry and others reported in PLD 1967 Dacca it was held that: "It is evident from the terms of the lease, as stated above, that it is a lease for a fixed term and not a lease in perpetuity. A lease in perpetuity is unknown to English law. In this country a lease in perpetuity can be created by an express grant to that effect or by a necessary presumption raised by the terms of a grant and by an unambiguous and long possession. In this particular case there can be no manner of doubt that the lease was for a fixed period and not a lease in perpetuity within the meaning of the Transfer of Property Act. Plaintiff was not, therefore, a 'rent-receiver' in respect of the suit-land."
11. In the case of Dr. Amanullah Khan v. Province of N.-W.F.P. Through Secretary, Finance, Government of N.-W.F.P., Peshawar and 2 others reported in 1994 MLD Peshawar 2329 it was held that: "A 'lease in perpetuity' in the light of the actual connotation of the word and also in the light of Dictionary meaning of the word perpetuity, means and refers to a state of being perpetual; endless time: duration for an indefinite period: something lasting for ever: an agreement whereby property is tied up, or rendered inalienable, for all time or for a very long time. The petitioner-plaintiff seems to be intelligently advised when one looks at the rent deed or deeds on file which he executes with the Municipal Committee for a period of one year only. By no stretch of any possible imagination the rent deed executed by the petitioner can be termed as deeds of a 'lease in perpetuity' and hence Dr. Amanullah cannot be treated as 'lease in perpetuity' unless he is so made contractually liable against the Municipal Committee."
12. The Honorable Judge has held that: "Consequent upon what has been discussed above, it is held that the authorities having acted beyond the ambit of Urban Immovable Property Tax Act, 1958 and also there being an element of mala fide, the Civil Court does have the jurisdiction. The revision petition is accepted, the impugned judgments of the two Courts below are set aside and the petitioner Dr. Amanullah determined not to be a 'lease in perpetuity' is held not liable to pay the tax of the superstructure in dispute unless such perpetual lease deed is executed by the Municipal Committee with its tenant/lessee failing which the Municipal Committee since the time of construction of superstructure shall be deemed to be the owner under section 2(e) of the Urban Immovable Property Tax Act, 1958."
13. Our attention has also been invited to the case of Mehran Associated Limited v. Commissioner of Income-tax, Karachi 1993 SCM R 274 = 1993 PTD 69 where it was observed by a Full Bench as follows:-- "The cases relied upon by Mr. Sirajul Haq Memon support the case of the appellant inasmuch as they indicate that the word 'owner' used in the relevant section of the late Act cannot be given extended meaning for the purpose of taxation under section 9. The cases relied upon by Mr. Shaikh Haider are distinguishable from the facts of the present case. In all the above cases the structure which was raised by the lessee/assessee concerned remained vested in him either up to the expiry of the lease deed or even thereafter by providing the removal of the same by the lessee/assessee, whereas in the present case under the lease agreement, the structure was to vest in the Auqaf Department from the very inception when it was raised.
' In our view, the above meanings of the words 'being' or 'owner' do not support the case of the respondent. The word 'owner' used in section 9 of the late Act and now section 19 of the Ordinance has been subject-matter of judicial interpretation. The interpretation placed by the Courts while construing section of the late Act, generally will be applicable while construing subsection (13) of section 12 of the Ordinance. However, we may observe that a lessee in whom ownership of the structure/building vests in terms of the lease or otherwise may be treated as owner in terms of subsection (13) of section 12 of the Ordinance.
' We are not concerned with the fact, whether the appellant can be taxed in respect of the above non-refundable amount received by them from the tenants under any other provision of the Ordinance. The .Word 'income' as described in clause (24) of section 2 of the Ordinance has a very wide connotation, whereas section 11 and other provisions of the Ordinance deal with the question of computation of the total income. The appelladt's case may fall under some other provision of the Ordinance but unless we hold that they were the owner of the buildings, their case cannot be covered by subsection (13) of section 12 of the Ordinance.
' The cardinal principles of interpretation of a fiscal statute seem to be that all charges upon the subject are to be imposed by clear and unambiguous words. There is no room for any intendment nor there is any equity or presumption as to a tax. A fiscal provision of a statute is to be construed liberally in favour of the taxpayer and in case of any substantial doubt, the same is to be resolved in favour of the citizen. Keeping in view' the above principles of interpretation, we cannot hold that the appellant is the owner of the building though under the terms of the lease agreement, the same stood vested in the owner of the land. The word 'being' might have advanced the respondent's case if the building would not have been vested in the Auqaf Department and the appellant, though lessee, could have been treated as 'being the owner of the building' in terms of subsection (13) of section 12 of the Ordinance by virtue of the fact that they had raised the building."
14. The case of Mehran Associates Limited (supra) is almost on all fours as the present case. In the present case also the property vests in the Evacuee Trust Board and even if it is leased out for a period of thirty (30) years it would revert back to the Evacuee Trust Board. The properties owned by the Evacuee Trust Board would fall within the ambit of Federal Government Properties which would be exempted from payment of property tax under section 4 of the Urban Immovable Property Tax Act, 1958. The clause in the lease pertains to those taxes which would be payable by the lessee and/Or the lessor. In the instant case if the owner does not have to pay taxes then the question of lessee's paying the same tax does not arise.
15. In view of the facts and case-law discussed above this Constitutional petition is allowed as prayed. The application (C.M.A. 5242/1999) pending in it having become infructuous is disposed of. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.