' The instant petition as also W.P. No,15631 of 1999, W.P. No,21156 of 2000, W.P. No, 22145 of 1999, W.P.
No,19841 of 2001, W.P. No, 4126 of 2002 and W.P. No,11100 of 2001, are being disposed of together, as all these involve common questions of law and facts.
2. All the petitioners are private educational institutions. In the Punjab Finance Act, 1997 through section 9, cess has been imposed on such educational institutions. The section reads as follows:-- "There shall be levied and collected a cess on private institutions @ 5% of the charges including fees exceeding Rs,1,000 received per month per student."
' Section 9(2): reads as below:- "The cess shall be payable by every person running a private educational institution."
' The petitioners are aggrieved of the above provisions. It is stated by the learned counsel for the petitioners that the cess cannot be imposed, without assigning in the statute the purpose of its imposition. As the purpose in conspicuously missing in the statutes therefore, it is not a cess rather a tax which the Provincial Legislature has no authority and competent under the law to impose.
Because this tantamounts a tax on the income, which if only within the domain of Federal Legislature. It is further contended that with a view to adjudge the competency of Provincial legislation, the doctrine of "Pith and Substance" be played into service and by applying this rule, it is clear that the tax is on income. In support of this contention, they have relied upon PLD 1970 SC 253, PLD 1971 SC 401, PLD 1994 Lah. 175, AIR 1967 SC 1521, PLD 1980 Pesh. 137 and PLD 1963 (W.P.) Kar.
319.
3. Learned Advocate-General Punjab when confronted, admits that a cess is a kind of a tax, which is levied for a special administrative purpose, but by relying upon Article 163 of the Constitution of the Islamic Republic of Pakistan, 1973 states that according to this Article the Provincial Assembly is competent to impose tax on persons, engaged in professions, trade callings, etc. And such tax shall not be regarded as imposition of a tax on income. As the present case, the above tax is on the profession and callings, etc. Of the petitioners, who are engaged in running of the educational institution, resultantly, section 9 is squarely protected by the Article 163 of the Constitution.
4. Replying to the above contentions, learned counsel for the petitioners states that according to Article 163, though a tax can be imposed upon callings, professions, etc. But such tax cannot exceed the limit as may from time to time be fixed by an Act of Parliament. In the instant case, limit of Rs,50 was prescribed by Act. X of 1941, which was the existing law and the limit was subsequently increased to Rs,1,000,00 in 1999. Therefore, for the years 1997-98, such tax could not have been more than Rs,50 whereas for 1999, it could be for the increased amount of Rs,1,000,00. In support of this contention, reliance has been placed on PLD 1999 Lahore 244 and unreported judgment passed in W.P. No,997 of 1991.
5. I have heard learned counsel for the parties and find that according to Article 163 of the Constitution, there are certain limitation on the power of Provincial Assembly in the matter of imposition of the tax, on professions, etc as per which, it could only be imposed within the limits fixed by Majlis-e-Shoora Act XV of 1941 was ,the existing law providing the limit of Rs,50, upto Rs,50 and for the year 1997-98. But as per amendment brought through the Federal Finance Act, 1999, the limit was increased up to Rs,1,000,00 resultantly, the impugned provisions of Punjab Finance Act, 1997, which are beyond the prescribed limit, are in conflict and breach of provisions of Article 163 apd cannot he sustained. The judgments reported as PLD 1999 Lah. 244 and 2001 CLC 148 duly support this view.
In the light of above, the provisions of section 9 to the extent these contravenes Article 163 of the Constitution are declared as ultra vires and without lawful authority. Accordingly these petitions are allowed.