' MUHAMMAD BASHIR JEHANGIRI, J.---This petition is directed against the judgment of the Lahore High Court, Lahore, dated 26-4-2001 whereby the respondents' Writ Petition No, 4799 of 2001 was accepted.
2. The facts leading to the present petition briefly stated are as follows: ' RespondentNo,1 is owner of House No, 85-D, Jail Road, Lahore. The Excise and Taxation Department Government of the Punjab issued a demand notice to the respondent for payment of Rs,43,031 as property tax under the provisions of the Punjab Urban Immovable Property Tax Act, 1958 (hereinafter called as the Act) in respect of the aforementioned house. Respondent No,1 thereupon filed the writ petition to challenge the legality and propriety of the demand notice. The main thrust of the respondent's case was that the demand notice for the payment of Rs,43,031 issued by the petitioners-department by way of property tax was violative of the provisions of the Act particularly those of sections 3, 5 and 5-A thereof. Section 3 of the Act postulates that there shall be charged, levied and paid as tax on the annual value of buildings and lands in a rating area at the rate of ten per centum of such annual value. The annual value of the buildings and lands is not defined in the Act but the mode and manner for determining the annual value is provided in sections 5 to 9 of the Act. It appears to mean loosely the annual rental value of a building or a land as accepted and determined by the Assessing Authority. It is not necessarily the annual rental value on which a building or a land is let or is purported to be let. Nonetheless this fact is to be considered by the Assessing Authority in the ascertainment of the annual value of the property. In point of face, at intervals of five years, door-to-door survey is made to register such particulars of buildings and lands in each town as ownership, type of building area, accommodation and annual rent. In the case of rented buildings, actual rent is ascertained and recorded after necessary inquiries.
Estimated or notional rent is assessed for owner-occupied properties. The Officer Incharge of assessm ent is required to lay down locality-wise guidelines for the staff as to return per room or per bedroom in respect of owner-occupied properties. This serves thepurpose of regulating the discretion of tax staff and avoiding arbitrariness.
' Section 5 of the Act describes the mode of ascertainment of annual value of any land or building by estimating the gross annual rent at which such land or building together with its appurtenances and any furniture that may be let for use or enjoyment which such building might reasonably be expected to be let from year to year less any allowance specified therein and revenue paid in respect of such building or land.
' Section 5-A provides that the only value of the land or building may be determined on the basis of such valuation tables and for such localities as may be notified by or under the authority of the Government.
3. In the comments filed by the petitioners in the High Court, it has been pleaded that the gross annual rental value was being calculated as percentage of the actual costs of the proprieties which are subject to tax under the Act and that it has been so determined by relying on the valuation tables that have been prepared by the Deputy Commissioners of the various districts in the Provinces for the purpose of determining the minimum sale price of the properties locality-wise in their respective Districts (Underlining is provided for emphasis).
4. The learned Judge in Chambers of the High Court, while disposing of the writ petition, observed that it was not disputed by the learned Law Officer representing the petitioners that as a result of applying the aforesaid criteria for assessment of gross annual rental value, the petitioners have not prepared any valuation tables to assess the rental value of buildings or land or plots located within different rating areas. The various tables which are based on the capital value of the properties have been prepared for the purpose of the assessment of stamp duty and the registration fee which had been used for the purposes of section 5-A of the Act by the petitioners. The learned Single Judge held the view that the procedure adopted by the petitioners was not in accordance with the provisions of sections 5 and 5-A of the Act. Nonetheless section 5-A empowered the relevant authority of the Provincial Government to determine gross annual rental value on the basis of valuation tables. He, however, came to a definite conclusion that the provisions of sections 5 and 5-A did not empower the petitioners to prepare those valuation tables on the basis of the capital value of the properties involved as has been followed by them. He was of the opinion that the comments filed by the petitioners revealed that the valuation tables which have been used by the Provincial Government in determining gross annual rental value of the properties for the purpose of the Act, admittedly, have no nexus with the rental value of theproperties in question. It was, therefore, held that the use of valuation tables prepared by the Deputy Commissioners of various Districts in the Province for the purposes of the Stamp Act (II of 1899) and Registration Act (XVI of 1908) could not be treated as valuation tables for the purpose of section 5-A of the Act. In this view of the matter the demand raised against the respondent based as it was on the valuation tables prepared by the Deputy Commissioner of various District in the Province on the strength of the capital value of the property were declared to be without lawful authority. It was, however, observed that the aforementioned order would not stop the Provincial Government from preparing valuation tables which are based on the annual rental value of the properties within different rating areas, provided such valuation tables otherwise comply with the provisions of section 5-A and the other provisions of the Act. The petition was thus accepted and the demand raised was declared to be without lawful authority and consequently annulled. Hence this petition.
5. Mr. Zia Haider Rizvi, learned Advocate Supreme Court representing the petitioners, submitted that the petitioners had not only adopted the rate of valuation tables prepared by the Deputy Commissioner of various Districts in the Province for the purpose of Stamp Act (II of 1899) and Registration Act (XVI of 1908), but it also applied its own yardsticks to prepare the valuation tables.
He further maintained that under the old mode of assessment of annual rental value was creating a gap between the annual rental value for the self-occupied properties and the rental properties which has resulted in a lot of pilferage of property tax.
6. The contentions of the learned counsel are wholly misconceived because instead of making amendments in the Act itself, section 5-A has only been added in the Finance Act of 1998, wherein it has been only provided that the annual value of a property is to be determined on the basis of such valuation tables and for such localities as notified by or under the authority of the Government. Even the mechanism provided for in section 5-A has not been taken into consideration by the petitioners in preparing the valuation table. Rather it is the case of the petitioners themselves that they had followed the system of gross annual rental A value in accordance with the valuation tables prepared by the Deputy Commissioners for the purpose of the Stamp Act, (II of 1899) and Registration Act (XVI of 1908), and not in accordance with section 5- A of the Act.
7. After going through the impugned judgment we find that the learned Judge in Chambers of the High Court while accepting the writ petition has correctly construed the provisions of sections 3, 5 and 5-A of the Act. The petitioners have construed section 5-A of the Act, inisolation. All the three sections when read conjunctively would reveal that the criterion adopted for determination of the annual value of the properties was not in accordance with sections 5 and 5-A ibid.
8. We do not find any substance in this petition and, therefore, decline to grant leave to appeal. This petition is consequently dismissed as being without any merit.