Muhammad Fiaz vs Government Of The Punjab And Other

JUDGMENT MUHAMMAD GHANI, J.- By this single judgment, I propose to dispose of Writ Petition No. 5700 of 2002 and 494 other similar petitions (of which list is at Annex 'A'), as questions of facts and law broadly, speaking, are common in all of them.

2. The petitioners are owners of immovable properties, located within urban areas of the Province of Punjab. By Punjab Finance Act (No. VII) of 1998, Section 5-A was added to the Urban Immovable Property Tax Act (No. V) of 1958, which authorized determination of annual value of buildings and lands for the purpose of levy of tax, commonly known as property-tax, "on the basis of such valuation tables and for each localities as may be notified by or under the authority of the Government", It is a common ground between the parties that the Government of the Punjab, is its Excise and Taxation Department, had earlier framed valuation tables, in the purported exercise of power under the afore-mentioned newly- added Section 5-A, primarily on the basis of valuation tables prepared by the Deputy Commissioners of various Districts in the Province, for the purpose of determining the minimum sale price of properties located in their respective Districts. Pursuant to such valuation tables, tax was levied by the assessing authorities and when demands were raised, the same were challenged in this Court.

Challenge to the levy of tax was thrown mainly on the ground that the valuation tables in question determining the gross rental value of the properties, prepared as they were, on the basis of the capital value of the properties,, did not qualify the requirements of Section 5-A. The contention raised against the validity of the valuation tables found favour with a learned Judge of this Court, consequently the Writ Petitions were accepted and the demands raised, based on valuation tables prepared on the basis of the capital value of the properties, were declared to. Be illegal.

Nevertheless, it was further observed in the order recorded in Writ Petition No. 1799 of 2004 as follows:- "This order, however, shall not prevent the Provincial Government from preparing valuation tables which are based on the annual rental value of 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 judgment rendered in the afore-mentioned Writ Petition is reported as Jamshed Waheed v.

Government of Punjab (2001 CLR 1105). Another owner,, namely Mst. Ameena Jabeen of the same house had also filed Writ Petition No. 682 of 2001 which too was accepted and the judgment is reported as Mst. Ameena Jabeen v. Government of Punjab (NLR 2001 Tax 189). Government of the Punjab, through the Secretary, Excise and Taxation, challenged the afore-mentioned decision (in Writ Petition No. 4799 of 2001) through Civil Petition No. 1435 of 2001 which was dismissed by the Hon'ble Supreme Court of Pakistan on the 14th of June, 2001.

3. Then, on the 13th of October, 2001, the following communication was sent by a Section Officer of Excise and Taxation Department, Government of the Punjab, to the Director-Generat, Excise and Taxation, Punjab, Lahore, with copy alongwith its enclosures to District Officers (Directors, Excise and Taxafton/Excise and Taxation Officers) in the Punjab for information and compliance:- "No. S.O. TAX (E & T) 3-38/91/P-l Govt, of the Punjab Excise and Taxation Department dated: Lahore, the 13th October, 2001.

The Director General, Excise and Taxation, Punjab, Lahore.

Subject: VALUATION TABLES BASED UPON RENTABILITY OF IMMOVABLE PROPERTIES' FOR THE ASSESSMENT OF PROPERTY TAX.'

I am directed to forward herewith the format for the re-assessment of urban immovable properties throughout the Punjab as a uniformed formula.

2. It is requested that the same may krndly be forwarded to all the District Officer ("Directors Excise and Taxation/Excise and Taxation Officer") for carrying out survey operation in the rating areas under their respective jurisdiction, It is clarified that D.O.S./DDOs will not be authorised to change the figures recorded in the valuation tables, since it will remain the same throughout Punjab.

However, the appellate authority/assessing authority will select combination of classes referred to in Column 1 of the evaluation table for grouping the various localities or rating under their respective jurisdiction.

3. It is re affirmed that the valuation lists, based upon the valuation tables will take effect from 1.1.2002.

Enel. As above.

Sd/- (Imran Aslam) Section Officer No. & Date: Even A copy alongwith its enclosures is forward to the District Officers (Director Excise and Taxation/Excise and Taxation Officer) in the Punjab for information and complaints. . Sd/- (Imran Aslam) ' Section. Officer"

The "uniformed formula" mentioned in the above- quoted communication was in the following terms:- ' VALUATION TABLE BASED UPON RENT ABILITY OF IMMOVABLE PROPERTIES IN THE RATING AREAS OF PUNJAB GENERAL RESIDENTIAL AND COMMERCIAL ' PROPERTIES The figures recorded in the respective column of the valuation table shall be multiplied with the total land area (Sq. Yard) and covered area (Sq. Feet) of the building the figure jprived at shall be multiplied by 12 to determine the reasonable annual rent.

Since the rentability of following properties is different from that of general residential and commercial properties, therefore at the time of determining their rentability, the figure recorded in the valuation table shall be adopted after following subtraction and Reduction of 10% for each floor above and below ground floor/inter-floor subject to a maximum of 50% of the rate specified in valuation table. #tbs SEASONAL USE OF PROPERTIES like cotton ginning factories rice husking mills oil mills, ice factories etc. Buildings and Lands Used as Offices. Educational Institutions.

HOTELS #the #tbs II. 20 YEARS OLD PROPERTIES ' #the #tbs addition.

I. PLAZAS AND RENTED OUT MULTISTOREY BUILDINGS. #the Reduction of 10% of the rate specified in the valuation table subject to condition that there is no addition/afteration in the building during this period.

Reduction of. 50% of the rate specified in valuation table.

Addition of 50% in the residential rates {self or rented as the case may be). Specified in the valuation table.

In case of buildings and lands used for hotels, the rentability shall be made as per following:

(i) The rentability of land area under commercial. Use excluding parking places shall be calculated on the basis of self-commercial rates.

(ii) The rentability of covered area of such building other than lodging units, lobbies, dining halls, kftchens other than the- Banquet Hall, Business Halls etc., shall be assessed on the basis of self-commercial rates prescribed in the valuation table.

(iii) The rentability of covered area let out to different organization will be assessed on the basis of commercial rates prescribed in the valuation table.

(iv) The portions of these units being let out, as lodging units shall be assessed on the basis of existing formula based upon rack rates giving allowance on account of vacancy/service change and machinery as the case may be according to the existing procedure. #tbs VI. HOSPITALS AND MARRIAGE HALLS CINEMAS. PETROL PUMPS. ETC. #the Commercial rates self or rented as the case may be specified in valuation table. At the time of calculation of Land Area and covered area, the doctors rooms, patient rooms, wards, operation theatres, waiting rooms/bridal rooms, Make-up rooms, etc. Shall b accounted for.

VII. INDUSTRIAL UNITS Residential rates (self or rented as the case may be) prescribed in the valuation table with following conditions:- Upto 1 ACRE - Above rate.

Next 4 ACRE - Reduction of 20% in the above rate.

Exceeding 5 ACRE - Furt her reduction of 20% in the above rates.

VIII. AGRICULTURAL As per existing procedure of LAND. Fixed rates per kanal.

Note: Any modification in the valuation table if so required will be notified by the Government".

Two "Proposed Valuation Tables" one for "Commercial" and the other for "Residential" properties were sent with the afore-quoted' communication. The same at Annexes 'B' and *C' respectively. The record made available to this Court shows that a Conference of all the Directors of Excise and Taxation in the Province of Punjab was held on the 27th of October, 2001 wherein it was decided that for the localities which could not be covered by categories 'A' to 'E' of the two tables (Annexes 'B' to 'C' to this judgment) two more, categories i.e., 'F' and 'G' be added to the valuation tables.

Accordingly, the Excise and Taxation Department of the Government of Punjab prescribed for the assessm ent of "Property Tax" rates for the two Muhammad Fiaz V. Govt, of Punjab C.C. 257 , (Muhammad Ghani, J.) additional categories, and communicated the same to the concerned officers vide corrigendum, dated the 31st of October, 200I issued to the earlier communication, dated the 13th of October, 2001, reproduced above. The two categories added to the earlier valuation tables are at Annexes 'D & E' to this judgment.

4. The common grievance of the petitioners in all the petitions is that on the basis of the afore- mentioned tables, property tax determined by the Department, and being demanded from them, is many times more than what they were actually paying before and, therefore, approached'this Court in its Constitutional jurisdiction, challenging the afore-mentioned communication, dated the 13th of October, 2001 and corrigendum thereto, dated the 31st of October, 2001, the valuation tables prepared and issued by the Government of the Punjab, as well as the demands of property tax based on the said valuation tables. The petitions which had been filed by then, were pending when on the 19th' of March, 2003, Government of the Punjab sent out the following communication:- "NO. S.O. TAX (E&T) 3-38/91 (P-l)

GOVERNMENT OF THE PUNJAB EXCISE AND TAXATION DEPARTMENT Dated Lahore, the 19th March, 2003.

To, J

1. The Director General, Excise and Taxation Punjab, Lahore. '

2. All Assessing Authorities/Appellate Authorities, Under UIP Tax Act, 1958 in the Punjab.

Subject: VALUATION TABLES BASED UPON RENTABILITY OF IMMOVABLE PROPERTIES FOR THE ASSESSMENT OF PROPERTY TAX.

Please refer to this department's notification Of even number dated 13.10.2001 on the above subject.

2. Instances have come to the notice of the department where some of the localities as a whole have been assigned a particular category as per valuation table by the Assessing Authority, but such localities have pocket areas which due to their peculiar conditions may have lesser rentability than the one determined on the basis of the category of that locality, It is clarified for the removal of doubt that the Assessing Authority/Appellate Authority may assign a different category to such pocket areas depending on their rentability as was envisaged in the letter under reference. . - . Sd/- (IMRAN ASLAM)

SECTION OFFICER (TAX)."

Yet another Notification, dated the 19th of March, 2003 was issued. For facility of reference, relevant part thereof is also extracted below:- "GOVERNMENT OF THE PUNJAB EXCISE AND TAXATION DEPARTMENT Dated Lahore, the 19th March, 2003 NOTIFICATION NO. SOTAX (E&T) 3-38/91 (P-l). In continuation of this Department's Notification No, SO. Tax (E&T) 3-38/91 (P-l), dated 13.10.2001 regarding Valuation Tables for assessment of UIP Tax under Section 5-A of. The Punjab Urban Immovable Property Tax Act, 195$.

2. In exercise* of powers conferred under subsections (1) and 1(a) of section 10 of the Punjab Urban Immovable Property Tax Act, 1958, the Government of the Punjab is pleased to appoint a Committee comprising Additional Director General, Excise and Taxation, Deputy Secretary (Technical) Excise and Taxation Department and District Officer, Excise and Taxation concerned as "Appellate Authority" in respect of exceptional cases where the annual value of the particular property determined on the basis of the category of the locality in which it falls as per Valuation Tables appears to be excessive in view of any peculiar disability affecting the rentability of that property.

3. In exercise of the powers conferred under sub-section (2) of Section 10 of the Punjab Urban Immovable Property Tax Act, 1958, the Government of the Punjab is pleased to appoint Director General Excise and Taxation, Punjab to exercise the powers of "Revisional Authority" in respect of the orders of the "Appellate Authority" referred to in para 2 above.

4. The powers of "Appellate Authority" and "Revisional Authority" in all other cases shall continue to be exercised by "Collector" and "Commissioner" as notified vide this department's Notifications Nos.

SOAI (E&T) 3- 116-2000, dated 22.12.2001.

SAMI SAEED SECRETARY TO GOVERNMENT OF THE PUNJAB * EXCISE AND TAXATION DEPARTMENT No. & Date Even A copy is forwarded to the SOperintendent, Government Printing Press, Punjab, Lahore for publication in the official Gazette and to supply 50 printed copies of the Notification to Excise and Taxation Department.

Sd/- . (IMRAN ASLAM)

SECTION OFFICER (TAX)"

From a reading of the above Notification, it appears that the original communication, dated the 13th of October, 2001 had also been "notified". Be that as it may, it is nobody's case that any of the afore-mentioned communications or the valuation tabjes have not been "notified". . '

5. Mr. Alamgir, Advocate, who led the side of the writ-petitioners, challenged the vires and Constitutionality of the newly-added Section 5-A of the Urban Immovable Property Tax Act (No. V) of 1958, which was the source of power for the impugned valuation tables, by contending that it was bad for want of guidelines; it was over-board, rather too bald; it lent itself to nakedness,; it conferred un-channeled and arbitrary discretion on the Government, and being patently violative of the Preamble of the Constitution as well as. Its Articles 4, 8 and 25, the same is liable to be struck down, even on the ground of excessive or impermissible delegation of legislative power of Provincial Assembly of the Province of Punjab, It was further contended that the valuation tables prepared pursuant to Section 5-A, besides being equally bad, were discriminatory in nature and are, therefore, liable to be scrapped. The broad-based arguments of Mr. Alamgir were adopted by M/s. Ejaz Feroze, Azmat Saeed, Ahmad Sibtain Fazli, Sahibzada Anwar Hameed, Muhammad Azhar Siddique, Mushtaq Ahmad Tahirkheli, Farooq Ahmad Chishti Qureshi, Tariq Rahim and Ishtiaq Ahmad, Advocates, who appeared for their respective clients in other Writ Petitions. Learned counsel- appearing in other, cases also adopted the arguments of Mr. Alamagir. A long catena of reported decisions from abroad and of domestic Superior Courts was cited by the learned counsel for the petitioners in support of their contentions.

6. On the other hand, Syed Shabbar Raza Rizvi, learned Advocate-General assisted by Ch. Aamir Rehman, learned Addl. A.-G., Mr. Tahir Mahmood, learned ' Assistant Advocate-General and Mrs. Erum Sajjad Gul, Advocate, besides Mr. M. Saleem Sahgal, Advocate who represented the.

Respondent-Excise and Taxation Department, vehemently contended that delegated legislation had never been struck down for want of standards or guiding principles and that in a taxation matter it is not unconstitutional for the 'legislature to leave it to the executive/departmental functionaries of the Government to work out details of categories of the properties, categorize them in a reasonable manner without any discrimination, and to determine details of tax to be levied. According to them, either Section 5-A is ultra vires any provision of the Constitution nor the same is liable to be struqj-c down on the ground of excessive delegation of legislative functions.

Further, that the valuation tables having been prepared after due deliberations and taking into account ground realities, the same are also not liable to be struck down on any ground whatsoever, including the attack based on alleged discrimination. They also relied on the a long chain of reported decisions from foreign jurisdictions as well as of our on Superior Courts to which reference will be made presently.

7. Section 5-A of the Urban Immovable Property Tax Act, 1958, impugned in these petitions, though small one, but most abused, reads as follows:- "5-A. Valuation Tables to Ascertain Annual Value.- Notwithstanding the provisions of Section 5 the annual value 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:"

Learned Advocate-General submitted that the background for the legislation in dispute was the collective consciousness to up-root corruption, if not in its entirety, at least to minimize the same as far as possible and to do away with the feel-ground factor, which had a long stay in this Department, and to ensure a somewhat clean atmosphere aimed' at collecting revenue, within the permissible limits, to be spent on development programmes and the well-being of the citizens of the country, which is sheet anchor to th-e strength of the social fabric and the erotic doctrine of sip every flower and change every hour and the philosophy of philandering self-fulfillment unless combated on the militant basis of gender justice, are fraught with catastrophic possibilities.

Support for this submission was sought form the "Statement bf Objects and Reasons" read out by the Minister Incharge at the time the Bill was introduced, providing inter alia for "introduction of a new simplified system of assessm ent of property tax" and to "mobilize reasonable additional financial resources for the Province and taxing the rich without affecting the common man."

Learned Advocate-General supported by. Mr. M. Saleem Sahgal canvassed that the amendment has been brought about with a view to promoting fiscal reform to get rid of International Lending Institutions and to ensure welfare of common man which is the policy of the present regime; ensuring transparency in the levy and collection of property tax without any discrimination whatsoever; curtailing wide range of discretion of the assessing authorities, and thereby to combat with corruption. Moreover, in the earlier round of litigation, the Hon'ble Supreme Court has mandated that Section 5-A of the Act is not to be considered in isolation but has to be read conjunctively with the other provisions of the Act. Besides, in order to unveil the evil which the legislature intended to punish, a conspectus of the Act and the Rules, , to the extent relevant, is necessary to appropriate to the controversy between the parties. Section 3 is the charging section. Its subsection (1) authorizes Government (which, as defined in Section 2(d) means the concerned Provincial Government), to specify urban areas (an urban area, ,as defined by Section 2(1) means an area within the boundaries of a Municipal Corporation, Municipal Committee, Cantonment Board, Small Town Committee, or other authority (not being a District Board) legally entitled to or entrusted by Government with the control or management of a municipal or a local fund) where tax shall be levied under the Act.

Government has 'the power to divide one urban area into two or more rating areas, or several urban areas may be grouped as one rating area. Sub-section (2) lays down that "subject to the provisions of sub-sections (3) and (4) there shall be levied, charged and paid, a tax on the annual value of buildings and lands in a rating area at the rate of twenty per cent of such annual value".

Sub-section (3) then provides that "in case of property of the annual value not exceeding twelve thousand rupees, other than the property referred to in sub-section (3) a deduction of two hundred and seventy rupees from the annual value shall be allowed." By virtue of sub-section (4) the Government "may, by notification, for reasons to be recorded remit in whole or in part, the payment of the tax by any class of persons in respect of any category of property". According to the Explanation, the "annual value for the purpose of this section shall be the aggregate annual* value of all buildings and lands owned by the same person in the rating area", In view of the provisions of sub-section (5) of Section 3, payment of tax is the liability of the "owner of buildings and lands".

"A rebate equal to five per cent of the amount of annual tax for a financial year" is allowed by subsection (5) "if the amount of annual tax is paid in lump sum on or before. The 31st day of .

August of the financial year". Lastly, sub-section (7) laid down that "from the first day of July, 1998, for calculating tax on owner occupied properties the annual value shall be increased by twenty five per cent of the annual value existing on the said day". Section 4 of the Act excepts properties in respect of which tax is not leviable, In view of the provisions of Section 5,. "Annual value of any land or building" is to be ascertained "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 with such building might reasonably be expected to be' let from year to year" less certain allowances which an assessing authority in the given circumstances can allow. Section 6 'makes provision that "there shall be an assessing authority for every rating area" and that it "shall exercise such powers and perform such duties as are conferred on it by this Act or the Rules made thereunder." Then comes the procedural part, which according to the learned counsel for the petitioners should have been observed by the Government before finalizing valuation tables, whereas learned counsel for the Department has argued that it had no application to the "valuation tables", but the procedure had to be followed while drawing-up "valuation lists". Whereas the title of Section 7 reads: "Making and operation of valuation lists" it lays down that a valuation list shall be made by the prescribed authority in accordance with the Rules for every rating area so as to come into force either on the 1st day of July or on the 1st day of January, and that valuation list shall enure for a period of five years, whereafter next succeeding valuation list shall come into force. The provisions to sub- section (1) of Section 7 authorize the Government to reduce or extend the period between two successive valuation lists for any rating area, cancel and direct preparation of a new list in the event the existing one is lost or destroyed by operation of circumstances beyond control and .Order recovery of tax on the basis of either of the said two lists. Government can also, by order, divide any rating area into parts for the purposes of a new valuation list and to determine when the next following list shall be made and shall come into force. By virtue of sub-section (2) of Section 7, a valuation list comes into force on the 1st of July or 1st of January next following the date on which it is finally approved by the assessing authority, and is'to remain in force until superseded by a new valuation list. Sub-section (3) added in the year 1976, is confined to properties located in Cantonment Boards, and lays down that a list according to which house tax was being charged by a Cantonment Board before the 1st of July, 1975 shall be deemed to be a list under the Act until a new list is prepared. Rule 5 of the Rules inter alia fixes responsibility of the assessing authority to prepare a property register in Form P.T.I, from the rating area and enter therein the necessary particulars, separately for each unit of property, It is a common ground between the parties that Register P.T.I, is, in fact, the "valuation list". Rule 6 lays down a comprehensive procedure for preparation of "draft valuation lists", to be observed by the assessing authority, In order to prepare a valuation list, the assessing authority has to divide a rating area, if necessary, into sub-divisions of mahallas; a particular number is to be allotted to reach property, with reference to sub-division; mohallah or street in which it is located, and the number so allotted to a property is to be marked on some conspicuous part of the property, and, after ascertaining the name of the owner and if the occupier thereof is other than the owner, his name is also ascertained, and the same are then entered in a register, commonly called P.T.2. If a property is owned by more owners than one, names of all are recorded in the said register, alongwith the extent of share of each one of them in the property. Section 18 of the Act then requires that in any case where a new valuation list is intended to be made for any rating area, "the assessing authority shall give a public notice, which, in view of the provisions of Rule 6, has to be in Form P.T.3. It also serves as a notice to the owner, occupier or lessee to file a return in the prescribed Form called as P.T.4 vide Rule 6. The return is to be filed before the assessing authority within a period of thirty days from the date of service of notice. If no return is fildd, the assessing authority has been authorized by sub-section (3) of Section 18 to value the property "in such manner as it deems fit." But his discretion is guided by clause (e) of Rule 6 of the Rules which lays down that the "assessing authority shall make an enquiry about the gross annual rent earned or which could reasonably be earned in respect of the property during the financial year immediately preceding the current financial year." Clause (f) or Rule 6 authorizes the assessing authority to take into consideration any such further data that may be available for the purpose of determination of the gross., annual rent at which any property in the rating area may reasonably be expected to be let from year to year, if in its opinion that average gross annual rent of such property as ascertained under clause (e) be not fair or reasonable when compared with such rent of any other property in that locality. Form P.T.5 has been prescribed for the draft valuation list. Section 8(1) read with Rule 7 enjoin upon the Assessing Authority to publish draft valuation list, by giving public notice of the place where such list may be inspected. Sub-section (2) of Section 8, read with Rule 7(1) confer a right on .a person aggrieved by any entry in the draft valuation list, or by the insertion therein or omission therefrom of any matter, to lodge arr objection with the Assessing Authority at any time before the expiration of thirty days from the date on which the draft valuation list is published. The public notice has also to mention the date or dates or and the place at which objections thereto are. To be heard by the Assessing Authority in special circumstances, the period of thirty days can be extended to a maximum of thirty days. Sub-rule- (2) of Rule 7 also lays down the mode how a "public notice" is to be given, which besides other modes, provides for publication of notice in at least one English and one Urdu daily newspaper. Register in Form P.T.6 has been prescribed for the purpose - wherein the date of publication of the draft valuation list has to be noted. A draft valuation list is open to inspection free of any fee, by an owner or occupier of any property included in the list or his duly authorized agent at the office of the Assessing Authority during office hours, and they are allowed to make extracts from it. The objections contemplated by sub-section (2) of Section 8 can be filed on a plain judicial paper bearing a nominal rather negligible Court fee, stating briefly the grounds of objection, and upon receipt by the Assessing Authority are entered in. a prescribed register in Form ,P.T. 7 maintained for the purpose. Rule 10 makes provision about the authorities; including the Assessing Authority, which are to hear objections and the manner in which the same are to be heard. Upon disposal of objections, the order, with date, is to be recorded in the aforementioned, prescribed register in Form P.T.

7. Rule 11 then provides that the final valuation list shall be prepared in Form P.T.I and shall be authenticated by the Assessing Authority before the 1st day of July or the 1st day .Of January, as the case may be.

Such a valuation list is,regarded as a conclusive evidence of the facts stated therein subject, of course, to the alteration to which reference may be made presently.. Rule 11(3) makes open to inspection such an authenticated list. Although an authenticated valuation list is otherwise final, but the Assessing Authority has been empowered vide Section 9 to correct any clerical or arithmetical error therein; to correct any erroneous insertion or omission of any description; to make such additions to or corrections in the list as appear to the Assessing Authority to be necessary by reason of (i) a new building being erected after the completion of the valuation list

(ii) a building included in the valuation list being destroyed or substantially damaged or altered sipce its value was last previously determined, and (iii) any change in the ownership or use of any building or land. However, before making any amendment, not less than four days' notice to the owner of the building or the land in the prescribed Form P.T.I 3 has been made a mandatory requirement vide proviso to Section 9 of the Act, read with Rule 9 of the Rules, with a right to file objections, and disposal thereof in terms of Rules 8 and 10 as discussed above. Rule 14 empowers the Government to employ any person to determine the annual value of any property situated in any rating area in accordance with the provisions of Section 5 of1 the Act. The person so appointed is authorized by virtue of the provisions of sub-rule (2) of Rule 14 to enter, survey and value any land or building in the rating area which the Assessing Authority may direct him to survey and value.

Rule 15 enjoins upon, an Assessing Authority to maintain for each rating area a tax demand and receipt register in Form P.T.8. Under Section 14 of the Act, read with Rule 17 of the Rules a tenant can be called upon, to deposit rent to liquidate liability of any owner of any building or land in arrears.

Section 15 read with Rule 16, authorizes the prescribed authority to impose and recover fixed penalty for default in payment of tax. Notice of demand has to be in Form P.T.9. Finally Section 10(1) of the Act confers a right of appeal on a person aggrieved by an order of the appropriate authority upon objections made before that authority under Sections 8, 9, 14 and 15, to be filed within thirty days from the date of such order to the prescribed authority. Moreover, in viewof sub-section (1-A) any person aggrieved by any entry in the valuation list prepared under Section 7 or by the insertion therein or omission therefrom of any matter, or otherwise with respect to the list, can prefer an appeal within sixty days. Under sub-section (2) of Section 10, the nominated authority of its on motion, or on an application made within a period of one year from the date of the proceedings or the order, can exercise the power of revision. This is the whole scheme of the Act and the Rules framed thereunder.'

8. A perusal of Section 5-A would reveal that by its enactment, Provincial Government has been authorized to prepare and notify "valuation tables" which may serve as the basis for determining the "annual value" of the lands and buildings liable to levy of property tax. Thus, the legislature has made its intention clear that the primary purpose of enactment of Section 5-A is to be determine the annual value of the lands and buildings, and the valuation tables to be prepared by the Government, in exercise of ifs power under the newly introduced provision, are to serve as basis for sUch determination. As will be shown hereinafter, the valuation tables prepared by the Government in exercise of this power have laid down criteria for determination of tax for different categories of properties, both for commercial and residential, It has been left to the Assessing Authority concerned to determine as. To which category a particular property situate within a particular locality belongs. Once the category in which a property falls is identified, tax has to be levied according to the uniform formula chalked out in the valuation table concerned, It is in this background that the vires of Section 5-A are to be examined keeping in view the principles enunciated on the subject from time to time.

9. Before proceeding further, it may be observed that no frontal attack has been made on the competence, of the Provincial Legislature to legislate on the subject.' Firstly, the vires of Section 5-A have been assailed on the ground that the legislature has abdicated its on legislative power and conferred on the Government an unguided, unbridled, uncanalised, vague, vagarious and blanket power to prepare and notify valuation tables, without there being any guidelines having been provided by the legislature itself for the purpose. I would hurriedly strike a note that if Section 5-A falls, the valuation tables must fall, because the stream cannot rise higher than the source. The question of excessive and unbridled delegation of legislature power had been the subject of various decisions herein this country as well as in foreign jurisdictions. Two dedisions of Supreme Court of United State reported as Panama Refining Co. v. Ryan (293 US 388) and Schechter Ppuitry Corporation v. United States (295 U.S. 495) and dissenting views expressed by Indian Supreme Court in the cases of Corporation of Calcutta and another v. Liberty Cinema (AIR 1965 SC 1107), New Manek Chowk Spg. And Wvg. Mills Co. Ltd. v.

Municipal Corporation of the City of Ahmedabad and others (AIR 1967 SC 1801), Messrs Devi Das Gopal Krishan, etc. v. State of Punjab and others (AIR 1967 SC 1895) and Messrs Galan Trading Co.

(Pvt.) Ltd. v. Mill Mazdoor Sabba (AIR 1967 SC 691) support the submissions made on behalf of the writ petitioners.

10. So far as the two decisions of the Supreme Court of United States are concerned, in . The subsequent decisions reported as Fehey v. Ma/iaonee (332 US 245), St. Louis, LN. And S.R. Co. v.

Taylor (210 US 281) and Mckin/y v. United States (249 US 397), the principles laid down in the earlier two decisions were not only disapproved, but contentions founded on the ground of want of standards in the delegated legislation were repelled. Needless, to add that Marshal, C.J., of United States' Supreme Court is reported to have said as early as 1 825 in Wayman v. Southard (23 U.S. 10) as follows:- "It will not be contended that Congress can 'delegate to the Courts, or to any other Tribunal powers which are istrictly and exclusively legislative. But Congress may certainly delegate to others, powers which the Legislature may rightfully exercise itself.

The line has not been exactly drawn which separates those important subjects, which must be entirely regulated by the Legislature itself, from those of less interest, in which a general provision may be made, and power given to those who are to act under such general provisions to fill up the details."

Again, in Cincinnati, W. & Z. Co. v. Commissioner [(1852) 1 Ohio St. 77) the following observations appear:- "The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority of discretion as to its execution to be exercised under and in pursuance of the law."

Though reiterated that Congress could not delegate legislative power, the Supreme Court of United States upheld in Field v. Clarke (143 US 649) the grant of power to the President, to. Charge duty on imports. Again, in J.W. Hampton v. United States (1927) 72 Law Ed. 624 = 276 US 394), the Congress gave power to the President to make changes in the rates provided in the Tariff Act of 1922. That was challenged as a forbidden delegation of legislative power to executive authority. But the challenge was negatived by the Supreme Court on the ground that the Congress had laid down by legislative act an intelligible principle to which the person authorized to fix the rate of customs- duties on imported merchandise was to be conform, In that case the President could vary the rates with the aid of his advisers after proper investigation on the ground of differences of cost of production in the United States and abroad and to make such increases and decreases rates of duty as were found necessary to equalize the cost of production. The limit of such change was also fixed upto 50 per centum of the rates specified in the law. This case does not support the proposition that rates of tax can be delegated to a subordinate authority without any guidance, though it is an authority for the proposition that this can be done if guidance is given for the purpose, In United States v. Shreveport Grain Elevator and Co. (287 US 77) delegation of legislative power was justified by drawing distinction between the legislative powers and subsidiary powers to fill-up the details, or to find facts to carry out the policies declared by the Legislature, In the context, the Court is reported to have said that:- "The Congress may declare its will and after fixing a primary, standard devolve ; upon administrative officers the power to fill-up the details by prescribing administrative rules and regulations."

In United States v. Rock Royal Co-operative Inc. (307 US 533) the Agricultural Marketing Agreement Act authorized the Secretary of Agriculture to establish prices of agricultural commodities by reference to several factors including "other economic conditions", which expression, however, was left unspecified. Further, the selection of the commodities to be regulated by the Secretary, the areas in which the commodities cOSuld be regulated and the period of regulation were left to the judgment of the Secretary. The Court held that it was not beyond the powers of Congress to leave all these determination to a designated administrator with the standards named in the enactment and, further, that:- "for the purpose of determining whether legislation involving questions of economic adjustment involves an invalid delegation of legislative power, each enactment must be considered to determine whether it states that purpose which the Legislature sought to accomplish and the standards by which that purpose is to be worked out with sufficient exactness to enable those charged with the enforcement of the law to understand these limits.

In Sunshine Anthractie Coal Company v. Adkins (310 US 381), under the provisions of Section 4 of Bituminous Coal Act, 1937 the administrative agency was empowered to fix maximum prices when in public interest it deemed it necessary or in order to protect the consumer against unreasonable high prices. The Court held that there was no invalid delegation of legislative power, and in saying so observed:- "Delegation by Congress has long been recognized as necessary in order that the exertion of legislative power does not become a futility.......... The effectiveness of both the legislative and administrative process would become endangered if Congress were under Constitutional compulsion of filling in the details beyond the liberal . Prescription here. Then the burden of minutes would be apt to clog the administration of the law and deprive the agency of that flexibility and dispatch which are its salient virtues. For these reasons we hold that the standards with which Congress has supplied the Commission are plainly valid."

In Yakus v. Uniter! States (321 US 414), the Emergency Price Control Act of 194 sought to stabilize prices, to eliminate profiteering, to ensure that the defined appropriations are not dissipated by excessive prices, to protect persons with relatively fixed and limited incomes and to prevent a post emergency collapse of values. The Administrator was given power to fix prices which, in his judgment, were generally "fair" and "equitable" and would effectuate the purpose of the Act. The Act provided no direct answer to the question whether prices should be allowed to go up by 5 per cent 20 per cent, or 100 per cent. Nor did the Act answer such fundamental questions as to whether prices should be fixed below cost, whether profits on products should be eliminated, or whether profits on whole industries should be eliminated, or drastically reduced. Despite absence of any standards on these questions, the Court upheld the delegation, saying merely that Congress had stated the legislative object- maximum price fixing and had laid down standards to guide the administrative determination for the exercise of the price fixing power, and the particular price to be established. The United States Supreme Court has even upheld delegation in cases where the Legislature had failed to prescribe any ineligible principles of legislation at all. In such cases the Supreme Court had justified its decision by saying that "Congress legislated on the subject as far as was reasonable and practicable." In Mutual Film Corporation v. Industrial Commission of Ohio (236 US 230) the vagueness of the principles of legislation was acknowledged but its limits were restated in this way:- "While administration and legislation are quite distinct powers, the line which separates.... Their exercise is not easy to define in words, It is best recognized in illustration. Undoubtedly the Legislation must declare the policy of the law and fix the. Legal principles which are to control in given cases; but an administrative body may be invested with the power to ascertain the facts and conditions to which the policy and principles apply. If this could not be done there would be infinite confusion in the laws, and in an effort to detail and to particularize, they would miss "sufficiency, both in provision and execution", In Mckin/ey v. U.S. (249 US 397) by an Act of Congress, the Secretary of War was authorized:- "to do everything by him deemed necessary to suppress and prevent the keeping or setting-up of houses of 'ill fame'.... Within such distance as he may deem needful of any military camp...."

Violation of any rule promulgated by the Secretary was made a misdemeanour. The Court rejected the plea of unlawful delegation with the remarks that- "Congress having adopted restriction; .... In the statute ..... May, leave details to the regulation of the head of an executive department."

In Fahey v. Mal/onee (332 US 245) the Home Owner's Loan Act, 1933 gave to a board power to provide through rules and regulations for the liquidation of savings and loan associations and the appointment of conservators or receivers to take charge of the association. Congress had declared no policy with respect to liquidation or appointment of conservators. !\lo criterion was at all established. The Court held that - "It may be that explicit standards..., would have been a desirable assurance of responsible administration... The provisions are regulatory. They do not deal with unprecedented economic problems of varied industries. They deal with.... Problems of insecurity and mismanagement which are as old as banking enterprise.... A discretion to make regulations to guide supervisory action in such matters may be Constitutionally permissible while it might not be allowable to authorize creation of new crimes in unchartered fields."

In American Trucking Association v. United States (344 US 298) power was granted to the Commissioner of Interstate Commerce "to administer, execute and enforce all provisions of this Act, to make all necessary orders in connection therewith, and to prescribe rules, regulations and procedure for such administration". The Commissioner issued a set of rules drastically changing motor carrier practices in the leasing of equipment. The rules inter alia seriously affected the carriers of agricultural commodities, but the Supreme Court upheld the rules even though the effect of the rules was to derive some operators out of business, In repelling the contention that the rules were discriminatory in nature, the Court observed as follows:- "We hold then that the promulgation of these rules for authorized carriers falls within the Commission's power, despite the absence of specific reference to leasing practices in the Act....... The grant of general rule-making power necessary for enforcement compels this result."

It may be noted that the Court neither found nor attempted to find any standards, general policy or intelligible principles in the statute. Another important example of a statute without any guiding standards is given in the case of Arizona v. California (373 US 546). The problem in that case was the apportionment of water amongst South Western States and the question- was what to do in time of shortage. The statute contained limits on the Secretary's power but no standards, were provided to guide the exercise of power by the Secretary within those limits. The majority of the Court held:- "While the Secretary must follow the standards (limits) set out in the Act, he nevertheless is free to choose among the recognized methods of apportionment or to devise reasonable methods of his on."

In effect what the Court held was that the Congress had prescribed no methods of apportionment but had left the Secretary entirely free to devise reasonable methods of his on. The Court upheld the power of the Secretary to choose or to create his on standards and guides or methods and said so in these words:- "None of this is to say that in case of shortage, the Secretary cannot adopt a method of apportion or that he may not lay stress upon priority of use, local laws and customs, or any other factors that might be helpful in reaching an informed judgment."

The decision reported as Minnesota Ex el. Railroad and Warehouse Commission v. Chicago, Milwankee and St. Paul Railway Co. (38 Minn 28 = 1 37 N W 782) which concerned delegation of legislative power to impose taxes and rates, is almost on all fours. The Supreme Court of Minnesots ruled, as follows:- "The power of taxation is legislative, but this does not require the Legislature itself to assess the value of each man's property, or determine his share of the tax. The exercise of the police power in requiring persons who follow certain occupation to obtain a licence is legislative; but nothing is more common than to delegate to certain officers or boards the power to ascertain and to determine whether persons have the proper qualifications as to learning, skill, or moral character, and to grant or refuse a licence according as they find the facts to be. The difference between the power to say what the law shall be, and the power to adopt rules and regulations, or to investigate and determine the facts, in order to carry into effect a law already passed, is apparent. The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and the conferring an authority or discretion to be exercised under and in pursuance of the law."

"For a popular Legislature that meets once in two years, and then only for 60 days, to attempt to fix rates, would result only in the most ill-advised and haphazard action, productive of the greatest inconveniences and injustice alike to the railways and the public. If such a power is to be exercised at all, it can only be satisfactorily done by a board or commission, constantly in session, whose time is exclusively given to the subject, and who, after investigation of the facts, can fix rates with reference to the peculiar circumstances of each road, and each particular kind of business, and who can change or modify these rates to suit the ever-varying conditions of traffic."

"Our Legislature has gone a step further than most others, and vested our commission with full power to determine what rates are equal and reasonable in each particular case. Whether this was wise or not is not for us to say; but in doing so we cannot see that they have transcended their Constitutional authority. They have not delegated to the commission any authority or discretion as to what the law shall be which would not be allowable-but have merely conferred upon it an authority and discretion, to be exercised in the execution of the law, and under and in pursuance of it, which is entirely permissible. The Legislature itself has passed upon the expediency of the law, and what it shall be."

In American Jurisprudence (2nd) and Corpus Juris Secumdum, Section 43 of 42-American Jurisprudence at page 336, the theory of delegation of legislative powers has been succinctly stated as follows:- "In considering the true test as to whether a power is strictly legislative or whether it is administrative and merely relates to the execution of the law, the true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and the conferring of authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. The inherent necessities of governmental co-ordination must fix the extent and character of the assistance which the Legislature may seek from another branch of the Government. While the Legislature may not divest itself of its proper functions or delegate its general legislative authority, there are questions which are beyond determination by the Legislature and which must necessarily ' be left to the determination of executive or administrative agencies; and the Legislature may authorize others to do those things which it might properly, yet cannot understandingly or advantageously, do itself, Legislation must often be adapted to complex conditions involving a host of details with which the Legislature cannot deal directly, and where the Legislature legislates and indicates its will, it may delegate administrative authorities the power to fill-up the details, within prescribed limits, by the determination of facts or the enactment of rules, and regulations.

At page 562 of 16 Corpus Juris Secundum, the following observations appear:- "With the growing complexity of modern life, the multiplications of the subjects of Governmental regulation and the increased difficulty of administering the laws, there is a constantly growing tendency towards the delegation of greater powers by the Legislature, and towards the approval of the practice by the Courts."

With regard to taxation, it is stated in 5 T American Jurisprudence 199 that:- "A statute'which gives to the administrative officers a discretionary power to employ a certain procedure for the assessm ent or collection of certain taxes which the Legislature has established is not objectionable."

On the same subject it is stated in 16 Corpus Juris Secundum 625-26 that:- "Legislature may fix a rule of taxation and leave to an administrative body to promulgate rules for its administration and effectuation and to determine the existence of facts on which its operation depends."

By quoting the following observations of the Supreme Court made in Sunshine Anthracite Opal Co. v. Adkins (310 US 381):- [Vol.XXIlI S "Delegation by Congress has long been recognized as necessary in order that the exertion of Legislative power does not become a futility." ' .

Kenneth Culp Davis has stated in "Administrative Law and Government" (1960 Edition p. 55) that:- "Congress may and does lawfully delegate legislative power to administrative agencies. Lawyers who try to win cases by arguing that congressional delegations are unconstitutional almost invariably, do more harm than good to their clients' interest. Unreaslistic verbiage in some of the older judicial opinions should not now be taken seriously."

"In only two cases in all American history have congressional delegations to public authorities been held mvaWd-Panama Refining Co. v. Ryan (293 U.S. 388, 55 S Ct. 241, 79 L Ed. 446 (1935); Shechter Poultry Corpn, v. United States, 295 US 495, 55 S Ct. 837, 79 L Ed. 1470 (1935). Neither delegation was to a regularly constituted administrative agency which followed an established procedure designed to afford the customary safeguards to affected parties. The Panama's case was influenced by exceptional executive disorganization and in absence of such a, special factor would not be followed today. The Schechter's case involved excessive delegation of the kind that Congress is not likely again to make...."

"In absence of palpable abuse -or true congressional abdication, the non-deiegation doctrine to which the Supreme Court has in the past often paid lip service is without practical force."

11. The crux of the principle, based on case-law from American jurisdiction, has been lucidly summed-up in one sentence by Elihu Root when he stated that "the old doctrine prohibiting the delegation of legislative power has virtually retrieved from the field and given-up the fight [see (1916) 41 A B A R 368). (Emphasis added).

12. So far as case-law from across the border is concerned, the first case of the Indian Supreme Court under the post-Independence Constitution is reported as In re: The Delhi Laws Act, 1912 (AIR 1951 S.C. 332). It was held in that case that it could not be said that an unlimited right of delegation was inherent in the legislative power itself; that this was not warranted by the provisions of the Constitution, which vested the power of legislation either in Parliament or State legislatures, and that the legitimacy of delegation depended upon its being used as an ancillary measure which the legislature considered to be necessary for the purpose of exercising its legislative powers effectively and completely, It was observed that the legislature must retain in its on hands the essential legislative function. Exactly what constituted "essential legislative function" it was held further, was difficult to define in general terms, but this much was clear that the essential legislative function must at least consist of the determination of the legislative policy and its formulation as a binding rule of conduct; that where the law passed by the legislature declared the legislative policy and laid down the standard which was enacted into a rule of law, it could leave the task of subordinate legislation, which by its very nature is ancillary to the statute, to subordinate bodies, i.e., the making of rules, regulations or bye-laws; that the subordinate authorit/ must do so within the frame-work of thqL' law which makes the delegation, and such subordinate legislation has to be consistent with the law under :which it is made and cannot go beyond the limits of the policy and standard laid down in the law. A rider was added that if the legislative policy is enunciated with sufficient clearance or a standard is laid down, the Court would not interfere with the discretion that undoubtedly rests with the legislature itself in determining the extent of delegation necessary in a particular case. The next case is Harishankar Bagla v. State of Madhya Pradesh (AIR 1954 SC 465). Where Section 3: of the Essential Supplies (Temporary Powers) Act, 1946 was attacked as unconstitutional on the ground of excessive delegation of legislative power, It was held that the Act, there impugned, had laid down the principle, and that the principle was the maintenance or increase in Supply of essential commodities and of securing equitable distribution and availability at fair prices, It was further held that this sufficiently formulated the legislative policy and the ambit and the character of that Act was such that the details of that policy could only be worked out by delegating that power to a subordinate authority within the frame-work of that policy. A perusal of the judgment shows that the Court resorted to the preamble and the body of the enactment to come to the conclusion that the Act sufficiently formulated the legislative policy and that being so, the details of the policy could, be left to be worked out by selected instrumentalities, which were in fact, selected in very board terms. On these premises, it was held that Section 3 of the impugned Act was not ultra vires the legislature on -the ground of excessive delegation of legislative power, In Raj Narain Singh, Chairman, Patna Administration Committee (AIR 1954 SC 569) the same question arose and it was held that an executive authority can be authorized by a statute to modify either existing or future laws but not in any essential feature. As to what constitutes an essential feature, it was held that no general principle can be enunciated except that the executive authority cannot change the policy of a statute, but subject to this limitation the / executive can be entrusted with the function of extending an Act or part of an Act to any area either with or without modification, In Bhatnagars and Co. Ltd. v. The Union of India and others (AIR 1957 S.C. 478) where the Constitutionality of Imports and Exports (Control) Act, 1947, was attacked, the Court held as follows:- "Legislation which is conditional, property so- called, must be distinguished from legislation which is delegated. Where the Legislature provides and lays down principles underlying the provisions of a particular statute and also affords guidance for the implementation or enforcement of the said principles, it is open to the Legislature to leave the actual implementation or enforcement to its chosen delegate. The time when the provision should be implemented, the period during which it should be implemented or the place where is should be applied can, in appropriate cases, be validly left by the Legislature to its delegate. If the Court can find a reasonably clear statement of policy underlying the provisions of the Act either in the provisions of the Act or in the preamble, then any part of the Act cannot be attacked on the ground of delegated legislation by suggesting that questions of policy have been left to the delegate."

In Banarsi Das v. State of Madhya Pradesh (AIR 1958 SC 909), the Indian Supreme Court had to deal with a taxation statute, C.P. And Berar Sales Tax Act, T947. Section 6(1) of that Act provided that tax shall not be payable on the sale of goods specified in Schedule II. But sub-section (2) of Section 6 conferred power on the State Government to amend the Schedule by notification, It was held that conferment of such power was not unconstitutional as it was competent for the legislature to leave it to the executive to determine the details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied and the rates at which it is to be charged in respect of different classes of goods etc. Another case of "'nortance from the Indian jurisdiction is that of astern India Theatres Ltd. v. Municipal Corporation, 'oona (AIR 1959 SC 586) in which Section 59(1 )(xi) of me Bombay District Municipalities Act (III of 1901), which gave taxing powers to the Municipalities, was challenged on the ground of excessive delegation of legislative functions. The Court, however, upheld the validity of this provision oh the ground that the legislative policy, for the purposes of imposition of taxes by the Municipalities, was ascertainable from the expression "for the purpose of this Act, which expression, according to the Court, "pointed out the object for which taxes could be levied by the Municipalities," Doubtless, in Hamdard Dawakhana (Waqt), Lai Khan v.

Union of India (AIR 1960 SC 554) a provision of the Act impugned therein was struck down on the ground that the Legislature had established no criterion or standard and had not prescribed any principle on which the particular disease or condition was to be specified. The principle that the legislature could not delegate unguided power to a subordinate body was the basis of the decision, In Vasantla Maganbhat Sanjanwala v. State of Bombay (AIR 1961 SC 4) the question of delegation of legislative power was resolved thus:- "Although the power of delegation is a constituent element of the legislative power, it is well-settled that a legislature cannot delegate its essential legislative function in any case and before it can delegate any subsidiary or ancillary powers to a delegate of its choice, it must lay down the legislative policy and principle so as to afford the delegate proper guidance in implementing the same. A statute challenged on the ground of excessive delegation must therefore be subjected to two tests (i) whether it delegates essential legislative function or power and (ii) whether the legislature has enunciated its policy and principle for the guidance of the delegate."

In Swadeshi Cotton Mills Co. Ltd. v. State Industrial Tribunal U.P. And others (AIR 1961 SC 1381), use of such expression as "public safety" "convenience", and "maintenance of public order or supplies or services essential to the life of the community or for maintaining employment" were held to be sufficient indication of the legislative policy and guidance for the purpose of conferment of powers on the State Government to make certain provisions by general or special orders under the statute attacked -in the case." In Jyoti Pershad v. Administrator for the Union Territory of Delhi (AIR 1961 SC 1602), in connection with the Slum Areas (Improvement and Clearance) Act, 1956, it was observed that "so long as the legislature indicated in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation was skeletal or that every detail of the application of law to a particular case, was not laid down in the enactment itself or the fact that a discretion was left to those entrusted with administering the law, afforded no basis either for the. Contention that there had been an excessive delegation of legislative power so as to amount to an abdication of its functions, or that the discretion vested was uncanalised and unguided so as to amount to a carte blanche to discriminate." The next case to which reference may be made is Devidas Gopal Krishnan v. State of Punjab (AIR 1967 SC 1895). There the law on the subject of excessive delegation was summarized thus at p. 1901 of the Report:- "The Constitution confers a power and imposes a duty on the legislature to make laws. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously, it cannot abdicate its functions in favour of another. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation, It must necessarily delegate the working out of the details to the executive or any other agency. But there is a danger inherent in such a process of delegation. An over-burdened legislature or one controlled by a powerful executive may unduly over step the limits of delegation, It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self- effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation, It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities, It is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature."

It may be added that Devi Das's case did not differ from the Liberty Cinema case. What was held there was that there could be no general principle that merely the needs of the delegate could necessarily and always be a guidelfne. It was further held that each statute has to be examined to find out whether there are guidelines therein which prevent delegation from being excessive.

However, as I am particularly concerned with the fixation of rate of a tax, I may refer to certain case which deal with this aspect of the matter, In Banarasi Das Bhanot v. State of Madhya Pradesh (AIR 1958 SC 909) the Indian Supreme Court observed as follows:- "Now the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like." (Underlining is by me).

There is an important case from Indian jurisdiction reported as Municipal Board, Hapur v.

Raghuvendra Kripai (AIR 1966 SC 693), where the U.P. Municipalities Act No. 2 of 1916, gave power to the municipality to fix rates of tax and provided an elaborate procedure for doing so and also provided for sanction of Government. But one provision of that statute raised a conclusive presumption that the procedure prescribed had been gone through on a certain notification being issued by Government, and the question arose whether by reason of such a conclusive presumption there was not a delegation of essential legislative function, In that case the majority while dealing with the question of excessive delegation observed that the taxes in question were local taxes for-local needs for which local enquires had to be made and so they were left to the representative of the local population which would bear C.C. 289 the tax, It was further observed that such taxes must vary from town to town from one Board to another, and from one commodity to another, In the circumstances, delegation as to the fixing of rate of tax to the Municipal Board was upheld as permissible delegation. The minority judgment also accepted these propositions and observed that though generally speaking, the rate of tax was one of the essentials of taxing power given to the legislature, it must be recognized that there might be situations where the legislature might delegate to a subordinate authority that power under proper safeguards, It was also observed that in the matter of local taxation, like taxation by Municipal Boards, District Boards and bodies of that character, there was preeminently a case for delegating the fixation of the rate of tax to the local body, the reason for this being that problems of different municipalities might be different and one municipality might require one kind of tax at a particular rate at a particular time while another municipality might need another kind of tax at another rate at some other time, It was further observed that "the legislature can in the case of taxation by local bodies delegate even the authority to fix the rate to the local body provided it has taken care to specify the safeguards for the purpose". The difference between the majority and the minority only was that the majority thought that the conclusive presumption raised by one of the provisions was valid while the minority thought that by reason of the conclusive presumption all the safeguards were wiped out at one spoke and therefore it became a case of excessive delegation. There is yet another important case from Indian jurisdiction, reported as Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills (AIR 1968 SC 1232). This case would bear detailed examination, as it expresses the latest trends in the Indian jurisdiction on the subject of delegated legislation. The question at issue was the vires of Section 150 of the Delhi Municipal Corporation Act (No. LXVI) of 1957 which empowered the corporation to levy any of the optional taxes by prescribing the maximum rates of tax to be levied; to fix classes of persons or the descriptions of articles and properties to be taxed; and to lay down the system of assessments and exemptions, if any, which may be granted. Wanchoo, C.J., and Shelat, J. Expressed themselves as follows:- "The principle is well-established that the Legislature must retain in its on hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act. Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the Courts should not interfere. What guidance should be given and to what extent and whether guidance has been given in a particular case at all depends on a consideration of the provisions of the particular Act with which the Court has to deal including its preamble. Further, the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation. What form the guidance should take is again a matte which cannot be stated in general terms, It will depend upon the circumstances of each statute under consideration, In some cases guidance in broad general terms may be enough, In other cases more detailed guidance may be necessary, In the field of taxation the guidance may take the form of providing maximum rates of tax upto which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local area and then fixing rates after such consultation, It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watch-dog on the actions of the local body in this matter on behalf of the Legislature."

From above, it will appear that the Indian Courts have held that powers of the Legislature under written Constitution to make laws within the allotted field are in the nature of plenary and sovereign powers.

13. In -Hodge v. The Queen [(1884) 9 A.C. 117] their Lordships of the Judicial Committee of the Privy Council had held that the powers of Provincial Legislature in the British dominions and colonies were as plenary and ample within the limits prescribed by the Impartial Act as the Imperial Parliament in the plenitude of its powers possessed that within the limits assigned to them the Local Legislatures were supreme and had the same powers as the Imperial Parliament to confide to a municipal institution or body of its on creation authority to make bye-laws or resolutions as to subjects specified within its legislative authority, which authority, it was observed, was ancillary to legislation, and without it an attempt to provide for varying details and machinery to carry them out might become oppressive, or absolutely fail.

14. So far as our on Superior Courts are concerned, reference in the first instance, may be made to East and West Steamship Company v. Pakistan (PLD 1958 SC (Pak) 41) where Control of Shipping Act (No. XXVI) of 1947, which conferred power on the Central Government to make rules providing for the forms of licence for taking a ship to sea from a post or place within or outside Pakistan, the manner in which the shipping rates were to be fixed, the Constitution and, functions of a Board to advise the Central Government in respect of such rates etc. The then Hon'ble Chief Justice of Pakistan took the view that the Act could not be attacked on the ground of unauthorized delegation of legislative power, as the Act proceeded on a definite policy, namely, the policy of placing the ships, for the period of the emergency, substantially at the disposal of the Government to enable it to direct what classes of cargo or passengers may be carried, to know the exact position of a Pakistan ship at ajaarticular time and to claim priority for Government cargo and passengers, In Sheikh Muhammad Ismail and others v. The Chief Cotton Inspector and others (PLD 1961 S.C. 178) pursuant to Rule 26(1) framed by the- Provincial Government under Section 30 of the West Punjab Cotton (Control) Act (No. IV) of 1959, which provided for imposition of fees by the Government on the occupiers of factories, the Managers of Companies and cotton dealers to cover the cost of the staff appointed under the Act, or for improvement of agriculture relating to the cotton crop grown in West Punjab, the Provincial Government issued notifications from time to time* imposing fee on unginned cotton received in factories for ginning, It was contended that Section 30 of the Act amounted to excessive and unconstitutional delegation of power to the executive insofar as it left unguided discretion to the Government to pick and choose, out of certain categories of persons mentioned in the section, for imposition of the fee, there being no guideline laid down by the legislative authority in this respect. The Hon'ble Supreme Court held that Section 30 of the impugned Act sufficiently indicated the legislative policy by mentioning the categories of persons on whom the fpe may be imposed, and that so long a the rule-making authority limits itself to the levy of the fee to these categories, it cannot be said that an unfettered discretion had been bestowed on the executive authority, and that "choice of persons" from amongst indicated categories is within the permissible limits of delegation. Dealing with the question that the rate of fee had been left to be determined by the executive authority, their Lordships observed that "the statutory practice of leaving the power to specify rates of fee to be imposed to the relevant executive agency has a respectable ancestry," as it evident from several statutes such as Section 4 of the Special Marriage Act (III of 1 872), Section 17 of the Official Trustees Act (II of 1913), Sections 79 and 199 of the Sea Customs Act (VIII of 1878) and Section 57 of the Patents and Designs Act (II of 1911). In the result, it was held that delegation of this nature does not involve the delegation of an essential legislative power, and that the fixation of the fee has, of necessity, to be left to the executive authority because of the variability of the schemes which may be take in hand from year to year under the Act, and thus entailing differences in the expenditure incurred thereon. The question of delegation of legislative power was examined thread-bare by the Hon'ble Supreme Court in the case reported as Province of East Pakistan v. Sirajul Haq Patwari (PLD 1966 S.C. 854).

The background in which the vires of Section 57 of the Electoral College Act (No. IV) of 1964 came under examination was that Constitution of Pakistan, 1962, by Chapter 2, Part VII, constituted an Electoral College of Pakistan. Under Article 158(4) of that Constitution, the Members'of the Electoral College were required to be invested with functions in relation to local Governments, besides those of being the College for the election of the President and of the National and Provincial Assemblies.

Section 57 of the Electoral College Act gave effect to this mandate of the Constitution by providing that the Provincial Government, for the purpose of conferring on the Members of the Electoral College functions in relation to matters of Local Government, may arrange:- %

(a) the Electoral units in the rural and urban areas into groups, so that it is a Union, or as the case may be a Town, and

(b) declare, by notification in the official Gazette that the Members of the Electoral Units within the Union or Town shall constitute the Union Council, or as the case may be a Town Committee for the Town.

Section 57 was attacked before the East Pakistan High Court inter alia on the'ground that Section 57 was hit by the doctrine of excessive and impermissible delegation of legislative powers, and that, by delegating the power of grouping to the Provincial Government, the Central Government had abdicated in favour of the Provincial Government in respect of its legislative functions and thereby effected itself. These two objections were sought to rest on another objection, that is, that in delegating its functions, the National Assembly had ' failed to lay down any legislative principles, policies or norms according to which the Provincial Government should act. Chief Justice A.R.

Cornelius held that the concept of excessive delegation, which was derived from Judge-made law in the United States, and where it had lost much of its authority, must be applied in this country with the greatest circumspection, in that laws of the Legislatures in this country are made in continuation of pre-existing laws dating from the early nineteenth century, and that this rule, if it ha^to be applied, should be applied after the fullest consideration of the entire administrative and legislative complex, not only as it exists after the making of the law in question, but with reference to the immediately preceding conditions and in relation to the technique employed, It was further held that where excessive delegation is pleaded, it should be established that this delegation has led to the defeat of the requirement of "reasonable restriction" in relation to the exercise of a fundamental right. Mr. Justice Hamoodur Rehman held that it had been the consistent policy of the Legislatures in this country to delegate to the Provincial Government powers to set-up and demarcate areas of local authorities, as this function, by its very nature, could not property be performed by the legislature itself, also the legislature could not be expected to be aware Of the varying local conditions and administrative conveniences pertaining to each individual local area. Dealing with the question whether Section 57 could be avpided on the ground of impermissible delegation or delegation of an essential legislative function, his lordship held that this section, to the extent that it delegated the function of demarcation of local Government areas, had dealt only with administrative functions. On the larger question of impermissible delegation, or delegation of essential legislative function, it was held that if the subject- matter of legislation is within the competence of the legislature, then it can certainly legislate in anyone of the generally accepted forms of legislation, either directly or referential^, absolutely or conditionally, within its on sphere of legislation, and that it has always been recognized under all systems of legislation that the legislature may well leave it to some external authority to implement its policy or to determine a state of things on which the law intends to make its action depend, or to fix in its discretion the time at which the law is to come into operation, the area over which it is to extend and the manner, in which it is to be carried into effect. Referring to the American doctrine of delegation of legislative power, his lordship noted that in the American system itself the doctrine had undergone considerable change and that it has now come to be recognized that there may be practical difficulties for the legislature in providing for every minute detail, and so legislative power may be exerted through the intervention of fact-finding administrative instrumentality requisite to the consummation of the legislative object>Jt was further observed that though the legislature may validly delegate legislative functions to an external authority, it cannot abdicate but subject to this; if the legislature has sufficiently expressed its view and exercised its judgment as to the territorial extent, scope and subject-matter of the legislation, the provision of details, particularly when details are by their very nature not capable of being laid down by the legislature itself, can well be left to be done by another agency in whom the legislature places confidence and, further, the power of delegation may vary from case to case according to the scope of the authority of the delegating body, the variety, conditions and circumstances which a particular law is intended to meet, and the status and authority of the body to which the power is delegated, and according to the nature of the law, that is, whether it is penal or regulatory in character, and that in case of an expert in whom the legislature has confidence, a greater latitude may be conferred upon the legislature "for the purpose of delegating legislative powers, so that the purpose of the legislation may be carried out adequately and effectively. The conclusion at which their lordships arrived at was that the powers of the legislatures in the Indo-Pakistan Sub-continent have always been as plenary as the powers of legislation exercised by the British Parliament, and that even essential legislative functions may be delegated to an external authority subject, however, to the condition that the legislature does not altogether abdicate from its legislative functions or totally efface itself, In Zaibtun Textile Mills Ltd. v. Central Board of Revenue (PLD 1983 SC 358) the law was laid down thus:- "From the aforesaid analysis of the judgments it would appear that it is too late in the day to maintain that the Legislature cannot delegate \ authority to subordinate or outside authorities ' for carrying the laws enacted by it into effect and operation, in view of the long history of legislative.

Practice committing the rule-making powers having the force of law, to such | subordinate functionaries or agencies. As held in Hodge v. Regina by the Privy Council as clearly as 1883, such power of delegation is inherent and ancillary to legislation, It is also futile to seek and apply the Constitutional theories underlying the doctrine of impermissible delegation of legislative power as applied under the American system as these theories were irrelevant in our system (as obtaining under the 1962 Constitution), It is now well- established as observed by Hamoodur Rahman, J. (as he then was) in Province of East Pakistan v. Sirajui Haq Patwari (PLD 1966 SC 854) that the powers of the Legislatures in the Indo-Pak Sub-continent have always been as plenary as those of the British Parliament. Mr. A.K. Brohi in his argument also did not put his contention as high as to canvass a total absence of power to delegate any part of the legislative function in connection with a particular statute to outside authorities by the Legislature. But his submission was, as mentioned hereinbefore, that the impugned provisions were invalid inasmuch as the Legislature had effaced itself and abdicated its essential legislative function in favour of a subordinate authority i.e. Central Board of Revenue who has been given power to levy and collect the duty in question in all its dimensions, leaving it unfettered discretion to formulate its on policy and standards according to which the tax was to be levied."

"The Board being a responsible body with the expert knowledge in the working of the existing scheme, was an appropriate agency in which the Legislature reposed confidence, to carry out the legislative purpose of levying and collecting duties on production capacity in lieu of the duties it was empowered under subsection (1) of Section 3 to levy and collect. The aspect that the concept of production capacity as the basis for taxes and duties, being a new and untried idea in the realm of taxation, cannot be lost sight of. Apparently the production capacity of plants, machinery, undertakings, establishments and installations, was a complex matter depending on a number of variables and consideration of different factors, like condition of such plants and machinery, working conditions, category-wise national average annual production, past annual production etc. And many other factors arising from time to time, so that in their very nature laying down of detailed guidelines for determination of such production capacity were incapable of being ascertained by the Legislature itself, which could not be expected to undertake such unwieldy and cumbersome task with the limited time at its disposal, In entrusting such a task to a body more suited for such work can the Legislature be said to have effaced itself or abdicated its legislative function? As already pointed out there is authority for the proposition that in such circumstances, the Legislature will be within its Constitutional limits to employ appropriate agency to accomplish its legislative purpose. There .Can be no manner of doubt that the Legislature intended to introduce the new concept of capacity tax and fulfilled its legislative obligation by making provision of the same in clear and unambiguous terms, It, therefore, did not delegate its essential legislative function contrary to the terms of the instrument which had constituted it."

I may now refer to a Division Bench decision of this Court. Section 19 of the Customs Act, 1969, which laid down that the "Central Government, subject to such conditions, limitations or restrictions, if any, as it thinks fit to impose, may, by notification in the official Gazette, exempt any goods imported into, or exported from Pakistan Or into or from any specified part or station or area therein, from the whole or any part of the customs-duties chargeable thereon", and Section 7 of the Sales Tax Act, 1951 as amended by Finance Act, 1990, laying down that "The Federal Government may, by notification in the official Gazette, exempt any taxable supplies made by a registered person in Pakistan or any goods or class of goods, from the whole or any of the tax chargeable under this Act, subject to such conditions and limitations may be specified" and that "The Board may, by special order in each case stating the reason, exempt any supply from the payment of the whole or any part of the tax chargeable under this Act" were challenged in this Court in the case reported as Mian Anwar-ul-Haq Ramay v. Federation of Pakistan (1992 MLD 2135), amongst others, on the ground that the same were ultra vires the Constitution inasmuch as the power to exempt from import duty and payment of tax were the legislative powers and functions which had to be exercised and performed by the Parliament and could not be delegated to any organ of the State, In other words, Constitutionality of the said two provisions was challenged on the ground of excessive delegation. After reviewing the case-law on the subject, the contention that the same conferred unfettered and uncontrolled power on the executive without providing any guidelines for exercise of those powers, was repelled and Constitutionality of the said two provisions was upheld by observing as follows:- "While presenting this argument learned counsel of the petitioner lost sight of the fact that we have a written Constitution which lays down expressly the scope and the limits within which the three organs of the State i.e. Legislature, judiciary and executive are to perform their functions and those limits are well-defined and no organ of the State can overstep those limits in performing its functions. This being the position, the law is firmly settled that it is not for the Courts to question the wisdom of legislature in enacting provision of any law in any manner and their judicial function in this regard primarily is to confine to the interpretation of the law as it is. This Court owes its creation, to Article 175 of the Constitution, Sub-Article (2) of which provides negative mandatory command that this Court shall not have any jurisdiction save as is or may be conferred on it by the or by or under any law. Under Article 199 of the Constitution under which this petition has been made, this Court is vested with the jurisdiction to declare any law or any custom or usage having the force of law as void to the extent so far as it is inconsistent with the rights conferred by Chapter-I of Part II of the Constitution known as the fundamental rights beyond which the jurisdiction of this Court to examine the vires of law in our view does not extend. Learned counsel for the petitioner has not been able to point out any provision of the Constitution by which the legislature is required to lay down guidelines in the law to regulate the exercise of power which it confers on the executive, In the absence of any such provision, it is difficult to hold that this Court has the jurisdiction to declare any provision of law as ultra vires of the Constitution on that score..."

"Neither Section 19 of-the Customs Act, 1969 nor Section 7 of the Sales Tax Act, 1951 are ex facie discriminatory provisions, therefore, merely because they are capable of being administered discriminatory cannot be declared to be ultra vires..."

The-following rider in paragraph 12 of the judgment :ages 2142-43 of the Report) is also worth special tice:- "Before parting with the discussion on this aspect of the case we may observe that we should not be understood to have held that the absence of any guidelines for exercise of discretionary power conferred under the Statute gives to the authority concerned a free hand to exercise the same arbitrarily and whimsically. We may state here that in our considered view to which no exception can be taken the authority is required to exercise power reasonably, justly and fairly on the basis of relevant considerations having legal nexus with the object of law, with wisdom and maturity keeping in view above all the interest of the State, In our opinion those principles ' shall be read in the Statute as guiding principles to regulate the exercise of powers conferred on the functionaries of the State and they are so fundamental in character that they need not- be expressly provided in the Statute itself. Ch. Muhammad Faro.Oq, the learned Deputy Attorney-General when questioned as a matter of principle did not dispute the correctness of this proposition."

Lastly, reference may be made to the decision of the Hon'ble Supreme Court reported as Eiahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 S.C. 582), wherein, after reviewing exhaustively the case-law on the subject from foreign jurisdiction as well as of our on Superior Courts, the following broad-based principles have been laid down in paragraph 31 of the judgment, at pages 675-679 of the Report:- "From the above case-law and the treatises, inter alia the following principles of law are deducible:-

(i) That in view of wide variety of diverse economic criteria which are to be considered for the formulation of a fiscal policy, legislature enjoys a wide latitude in the matter of selection of persons, subject- matter, events, etc. For taxation. But with all this latitude certain irreducible desiderata of equality shall govern classification for differential treatment in taxation law as well;

(ii) That Courts while interpreting laws relating to economic activities view the same with greater latitude than the laws relating to civil rights such as freedom of speech, religion etc., keeping in view the complexity of economic problems which do Hiot admit of solution through any doctrinaire or strait jacket formula as pointed to by Holmes, J. In one of his judgments;

(iii) That Frankfurter, J., in Morey v. Doud (1957) U.S. 457 has remarked that "in the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to the legislative judgment";

(iv) That the Legislature is competent to classify persons or properties into different categories subject to different rates of tax. But if the same class of property similarly situated is subject to an incidence of taxation, which results in quality amongst holders of the same kind of property, it is . Liable to be struck down on account of infringement of the fundamental right relating to equality;

(v) That "a State does not have to tax everything in order to tax Something, It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably"

(Willi's Constitutional Law);

(vi) That the tests of the vice of discrimination in a taxing law are less rigorous. If there is equality and uniformity within each group founded on intelligible differentia having a rational nexus with the object sought to. Be achieved by the law, the Constitutional mandate that a law should not be discriminatory is fulfilled;

(vii) That the policy of a tax, in its operation, may result in hardships or advantages or disadvantages to individual assessee which are accidental and inevitable. Simpliciter this fact will not constitute violation of any of the fundamental rights;

(viii) That while interpreting Constitutional provisions Court should keep in mind, social setting of the country, growing requirements of the society/nation, burning problems of the day and the complex issues facing the people, which the Legislature in its wisdom through legislation seeks to solve. The judicial approach should' be dynamic rather than static, pragmatic and not pedantic and elastic rather than rigid;

(ix) That the law should be saved rather than be destroyed and the Court must lean in favour of upholding the Constitutionality of a legislation: keeping in view that the rule of Constitutional interpretation is that there is a presumption in favour of the Constitutionality of the legislative enactments unless ex facie it is violative of a Constitutional provision;

(x) That as per dictionary the word 'income' means 'a thing that comes in. Its natural meaning embraces any profit or gain which is actually received. However, while construing the above word used in an entry in a legislative list, the above restricted meaning cannot be applied keeping in view that the allocation of the subjects to the lists is not by way of scientific or logical definition but by way of mere simplex enumeration of broad categories;

(xi) That the expression "income" includes not merely what is received or what comes, in by exploiting the use of a property but also what one saves by using it oneself. For example, use of a house by its owner;

(xii) That what is not "income" under the Income Tax Act can be made "income" by a Finance Act.

An exemption granted by the Income Tax Act can be withdrawn by the Finance Act the efficacy of that exemption may be reduced by the imposition of a new charge, of course, subject to Constitutional limitations;

(xiii) That the question, whether a particular kind of receipt is income or not would C.C. 305 depend for its answer on the peculiar facts and circumstances of the case. If the nature of the receipt and its source are not satisfactorily explained by an assessee, facts which are generally within his peculiar knowledge, the Income Tax Officer may legitimately presume that the ? Amount in question is an income of the assessee from an undisclosed source;

(xiv) That the expression "clothes make the man" would be more nearly right if it were "Income makes the man". Knowledge about the income of a person will reveal most about him. It is a barometer to evaluate about his habits and views;

(xv) In Haig's language income is "the increase or accretion in one's power to satisfy his. Wants in a given period insofar as that power consists of (a) money itself or (b) anything susceptible of valuation in terms of money, whereas Simons equates personal income with algebraic sum of consumption and change is net worth";

(xvi) That the process of income determination is often expressed as one of the matching costs and revenues, It involves the process of working out costs used in connection with the earning of the revenue in a particular accounting period;

(xvii) That generally the effect of a deeming provision in a taxing statute is that it brings within the tax net an amount which ordinarily would not have been treated as an income, In other words, it brings within the net of chargeability income not actually accrued but which was supposedly to have accrued notionally; (xviii) That when a statute enacts that something shall be deemed to have been done which in fact and in truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to;

(xix) That where a person is deemed to be something the only meaning possible is that whereas he is not in reality that something, the Act required him to be treated as he were with all inevitable corollaries of that state of affairs;

(xx) That the legal fictions are limited for a definite purpose. They cannot be extended beyond the purpose for which they are created;

(xxi) That income-tax is a tax on a person in relation to his income, It is a tax imposed upon a person (natural or artificial) in relation to his income;

(xxii) That any legislation whereby either the prices of marketable commodities are fixed in such a way as to bring them below the cost of production and thereby make it impossible for a citizen to carry on his business or tax is imposed to such a way so as to result in acquiring property of those on whom the incidence of taxation fell, then such legislation would be violative of the fundamental rights to carry on business and to hold property as guaranteed in the Constitution; (xxiii) That the taxing power is ultimated as long as it does not amount to confiscation and that the Legislature does not have the power to tax to the point of confiscation.

(i) That the word 'reasonable' is a relative generic term difficult of adequate definition, It inter alia connotes agreeable to reason; conformable to reason; having the faculty of reason; rational; thinking, speaking, or acting rationally; or according to the dictates of reason; sensible; just; proper and equitable or to act within the Constitutional bounds;

(ii) That a direct tax is one which is demanded from the very person, who it is intended or desired should pay it, whereas direct taxes are those, which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another, like custom- duties, excise taxes and sales tax, which are borne by the consumers;

(iii) That levy of building tax on the basis of the covered area without taking into consideration, the class to which a particular building belongs, the nature of construction, the purpose for which it is used, its situation and its capacity for profitable use and other relevant circumstances bearing on the matters of taxation is not sustainable in law for want of reasonable classification;

(iv) That there is a clear distinction between the subject-matter of a tax and the standard by which the amount of tax is measured keeping in view the practical difficulties, which are encountered by the Revenue to locate the persons and to collect the tax due in certain trades, if the Legislature in its wisdom thought that it would facilitate the collection of tax due from specified traders on a presumptive basis, the same is not violative of the Fundamental Right relating to equality;

(v) That denial of reliefs provided by Sections 28 to 43-C of the Indian Income Tax Act to the particular business or trades covered by Section 44-AC thereof without showing some basis fair and rational and without having nexus to the object sought to be achieved by the Legislature, held unfair, arbitrary disproportionate to the prevalent evil and constitutes denial of equal treatment.

Consequently, the Indian Supreme Court did not press into service non-obsinate clause of Section 44-AC by applying theory of reading down as a rule of interpretation;

(vi) That it is an accepted canon of taxation to levy tax-on the basis of ability to pay. The Section 11 5-J and 115-JA incorporated in Indian Income Tax Act, 1961, were intended and designed to bring within the tax net the companies, which though making huge profits and also declaring substantial ^dividends but have been managing their affairs in such a way by availing of tax concession etc., as to avoid payment of income-tax;.

(vii) That the theory of reading down is a rule of interpretation which is resorted to by the Courts when they find a provision read literally seems to offend a fundamental right or falls outside the competence of the particular Legislature;

(viii) That though the Legislature has the prerogative to decide the questions of quantum of tax, the conditions subject to which it is levied, the manner in which it is sought to be recovered, but if a taxing statute is plainly discriminatory or provides no procedural machinery for assessm ent and levy of the tax or that is confiscatory the Court may strike down the impugned statute as unconstitutional;

(ix) That the rule of interpretation that while interpreting an entry in a Legislative List it should be given widest possible meaning does not mean that Parliament can choose to tax as income an item which in no rational sense can be regarded as a citizen's income. The item taxed should rationally be capable of being considered as the income of a citizen;

(x) That before charging tax, an assessee must be shown to have received income or the same has arisen and accrued or deemed to be so under the statute. Any amount which cannot be treated as above is not an incomS^and, therefore, cannot be subject to tax.

(xi) That there is a marked distinction between a tax on gross revenue and a tax on income, which for taxation purposes, means gains a profits. There" may be considerable gross revenues, but no income taxable by an income-tax in the accepted sense."

In paragraph 32 of the judgment it was further observed as follows:- "We have summarised hereinabove in para 31 the ratio decidendi of the above discussed cases and certain pertinent observations made therein. A perusal of above sub-paras (i) to (xxx) of para. 31 indicates that the same do not advance the case of the appellants. 0n the contrary, they reinforce the principle of law that the legislature, particularly in economic activities, enjoys a wide latitude in the matter of selection of persons, subject-matters, events etc., for taxation, the presumption is in favour f the validity of the legislation. The burden to prove that the same is invalid is on the person who alleges it."

A review of the case-law, therefore, leads to the conclusion that legislative function consists of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the legislature. The legislature must retain in its on hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purpose and objects of the Act. The increasing complexity of moderation, administration, the difficulty of passing complicated measures through the method of parliamentary debate and discussion, and the number of details and technical matters which must of necessity be provided for in statutes, have led to an- increase in the practice of entrusting power to executive or other agencies to make subordinate or ancillary legislation. By entrusting , that power to the Government, the legislature does not delegate its essential legislative functions.

While testing the vires of a statute, no abstract standard, no general pattern and no hard and fast rule can be set down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the statute, the extent or urgency of the civil sought to be remedied thereby, the applicability, of the statute in generality to air in similar circumstances or the exercise of pick and choose by it and thereby landing on discrimination, an the prevailing [Vol.XXIlI conditions at the time, should enter into the judicial verdict, In view of the analysis of the provisions of Sections 3, 5 and 5-A, it cannot be said that there are no guidelines in the scheme and provisions of the Act; that Section 5-A confers blanket, unguided, uncanalised vague and vagarious power on the Provincial Government, It is trite law that every possible effort should be made by the Court to save the law rather than to scuttle it. Viewed in the above perspective and tested on the touchstone of principles enunciated in the foregoing decisions, particularly of the Hon'ble Supreme Court of Pakistan, it cannot be held that Section 5-A of the Act is ultra vires any provision of the Constitution, the legislative power of the Provincial Assembly, or any other provision of the Urban Immovable Property Tax Act, 1958. I am, therefore, of the considered opinion that Section 5-A of the Act is not liable to be struck down on the ground of impermissible delegation of power.

15. As a final bid to stigmatize the provisions of Section 5-A of the Act, learned counsel for the petitioners contended that since the same infringes upon the other provisions of the Act, Section 5 in particular, it is a spoke in the wheel of effective administration pf the scheme of the Act itself and is thus void to the extent it offends against and violates the existing statute, In support of this submission, reliance has been placed, amongst others, on Emirates Bank International, PJSC v.

Excise and Taxation Officer and Assistant Collector, 1st Class, Karachi [(PLJ 2002 Kar. 84 (DB)]. In that case according to Section 11 of the Sindh Finance Act, 1964, as originally enacted, Professional Tax was leviable on classes of persons mentioned therein at the rate not exceeding Rs.30.00. Later on, by an amendment made by Section 6 of the Sindh Finance Act, 1975, the rates of the said Tax chargeable from various categories of professions, traders callings and employment were enhanced from Rs.30.00 to Rs.50.00 in some cases, and to Rs. 100.00 in other cases. Subsequently, by section 5 the Sindh Finance Act, 1994, Tax was levied on all Limited Companies, Modarabas, Mutual Funds and any other body corporate and the rate of Tax was ad valorem on the amount of paid-up capital or paid-up share and reserve having been assessed to income-tax in the preceding years whichever was more, ranging from Rs.5,000.00 minimum to Rs.5,00,000.00 maximum. Section 6 of 1975-Act and Section 5 of 1994-Act were Challenged on the grounds (i) that the same were ultra vires the provisions to Section 2 of Profession Tax Limitation Act, 1941 which was an existing Federal Statute, and (ii) that the same offended against Article 163 of the Constitution as well, It was found that whereas Section 2 of the 1941-Act placed limitation inter alia on the power of Provincial Assembly to impose Professional Tax on categories mentioned therein exceeding Rs.50.00 per annum, Article 163 of the Constitution prohibited a Provincial Assembly to travel into the domain of the ParkSment, and since both the amendments introduced in the years 1975 and 1994 were through Provincial Statutes, the same were ultra vires Article 163 of the Constitution and the existing Federal Statutes, i.e., Profession Tax Limitation Act, 1941. In the context, it was observed that "when there is a conflict between a Statute and any provision of the Constitution, then the provision of the Constitution is to prevail as it is the supreme law of the land and all other laws whether Federal or Provincial are subservient to it" and that "if any Statute violates or infringes upon any provision of existing Statute, then such provision of the hewly-enacted Statute would be void to the effect it offends or violates any provision of any existing Statute." There can be no cavil with this legal proposition because the principle is too settled to admit of any ambiguity or even two opinions. The question here is whether Section 5-A, as introduced by the Punjab Finance Act (No. VII) of 1998; offends against any provision of the CorTstitution or the existing Federal Statute. As mentioned above, no frontal attack has been made by the learned counsel for the petitioners on the power of the Provincial Legislature to have enacted Section 5-A. However, the contention of the learned counsel is that whereas in the existing Section 5 of the 1958-Act, a Federal Statute, it was provided that the "annual value of any land or building shall be ascertained 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 with such building might reasonably be expected to be left from year to year "less allowances etc., mentioned therein, but the provisions of Section 5- A making "valuation tables" as the basis for ascertaining "annual value" was a Clear departure therefrom; hence not sustainable being violative of Section 5 of the Act. The precise submission of the. Petitioners is that the expression used in Section 5 of the Act, viz. "annual value of any land or building shall be ascertained by estimating the gross annual rent" means nothing more than the annual rent which an owner/landlord is actually receiving from the tenant and not that which a property is reasonably expected to fetch. The argument at the first blush looked to be attractive, but when examined in- depth, it loses significance. Even when a vigorous break with the past and smooth reconciliation with a radical Constitutional value-set are the object, and the art of reading down and reading wide is . Used, being permissible by jurisprudence of statutory construction as a part of interpretational engineering, I see no reason for implying a limitation in terms as is contended for, since the legislature itself has not thought it fit to impose any. The following luminous guidelines in Weems v. United States [(1909) 54, L.Ed., 793 at p. 801] set one's sight high:- "Legislation, both statutory and Constitutional is enacted, it is true, from an experience of evils, but- - its generals language should not, therefore, be necessarily confined to the form that evil had therefore, taken. Time works changes, brings into existence new conditions and purposes.

Therefore, a principle, to be vital, must be capable of wider application than the mischief which gave it birth. This is peculiarly true of constitutions. They are not ephemeral enactments, designed to meet passing occasions. They are, to use the words of Chief Justice, Marshall, "designed to approach immorality as nearly as human institutions can approach it". The future is their care and provision for events of good and bad tendencies of which no prophecy can be made, In the application of a Constitution, therefore, our contemplation cannot be only of what has been, but of what may be. Under any other rule a Constitution would indeed be as easy of application as it would be. Under any other rule a Constitution would indeed be as easy of application as it would be. Deficient in efficacy and power. Its general principles would have little value, and be converted by precedent into impotent and lifeless formulate. Rights declared in the words might be lost in reality. And this has been recognized. The meaning and vitality of the Constitution have developed against narrow and restrictive construction."

The case of the petitioners themselves is that the Urban Immovable Property Tax Rules, 1958, having been framed under Section 23 of the Act, the same have statutory force. A plain reading of clause (c) of Rule 6 of the Rules makes it indubitably clear that "gross annual rent" is not restricted only to the "earned" rent, C.C. 315 but it also includes which "could reasonably be earned" Clause (f) further clarifies that it is competent for the Assessing Authority to take into consideration "such other data as may be available" for the purposes of determining "the gross annual rent at which any property in the rating area may reasonably be expected to be let from year to year, if in its opinion the average gross annual rent of such property ascertained under clause (c) be not fair or reasonable when compared with such rent of any other property in that locality", (underlining is by me for adding emphasis). Ex facie, the object of this provision in the Rules could not be a verbal execusion, but a meaningful exercise so that clever owners of the properties, in active connivance with their tenants, should not successfully hoodwink the Assessing Authority by deliberately showing the rent ridiculously low, thereby frustrating the whole intent and purpose of the statute, In Rafia Ahmed v.

Excise and Taxation Officer (1992 SCMR 1941) the Hon'ble Supreme Court, by highlighting the distinguishing features of the case reported as Lyallpur Cotton Mills Ltd. v. The Commissioner, Sargodha Division and another (1976 SCMR 615), inter alia held as follows:- "Therefore, it may not be necessary for the Assessing Authority to entirely base its assessment on the actual rent at which the building or land has been let out. Although it may be a very firm basis for assessing the gross annual value, yet not the only basis. The authority has to base its finding on the rent which can reasonably be expected from a hypothetical tenant. To arrive at this finding, it ' should consider the nature and age of the construction, the locality in which it is situated, the nature of user, fair rent if fixed by the Controller or which may be fixed under the law relating to rent restriction, the actual rent earned or expected to be earned for the building or similar building in the locality and other relevant considerations. Rule 6(e) empowers the Assessing Authority to make such inquiry. The principles for determining fair rent by the Controller under the Ordinance and the annual rental value by the Assessing Authority are similar. Therefore for a hypothetical tenant-the reasonable rent would be the fair rent which has a sanction of law behind it.

"It may be clarified that Section 5 lay down in mandatory terms that the annual value of any building or land shall be the gross annual rent at which such building or land may be let out with fixtures and fittings. The Assessing Authority prepares the valuation list as provided by Rule 6. The gross annual rent can be determined after making enquiry about the gross annual rent earned or could reasonably be earned in respect of the property. If in such enquiry the gross annual rent earned is found to be reasonable and can be expected to be earned, it will be accepted for purposes of assessm ent. Proceedings under Rule 6 ends there. But if such determination is not fair or reasonable compared to the rent of similar property in the locality, then the Assessing Authority can under Rule 6(f) determine the gross annual rental value on the basis of the rent at which property in the rating area could reasonably be let out. The law does not require the actual rent received by the owner to be accepted in all circumstances as the gross annual rent of the property, It is one of the several grounds on which it is determined.

Thus, if we examine the impugned Section 5-A in the light of the afore-mentioned principles, it cannot be struck down on the ground of impermissible delegation of legislative power, In view of the decision of the Hon'ble Supreme Court in the earlier round of litigation rendered in Civil Petition No. 1435 of 2001, decided on the 14th of June, 2001, Section 5-A is to be read conjunctively with Sections 3 and 5 of the Act. Whereas no challenge was thrown to the Section 5-A, this Court had earlier struck down the valuation tables, since the same did not comply with the requirements of Section 5-A and other relevant provisions of the Act. While affirming the decision of this Court, the Hon'ble Supreme Court had unequivocally observed. "Event the mechanism provided for in Section 5-A has not been taken into consideration bv the petitioners in preparing the valuation table", It was further held as follows:- "Section 3 of the Act postulates that there shall be charged, levied and paid a 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 fact, 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 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 assessment is required to lay down locality-wise guidelines for the staff as to rent per room or per bedroom in respect of owner-occupied properties. This serves the purpose 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."

I am of the view that Section 5-A does not offend against any other provision of the Act, let alone Section 5 and, therefore, the same cannot be scrapped.

16. The next question that arises for consideration is whether the valuation tables notified by the Government in excise of its power derived from Section 5-A of the Act can be, or liable to be set at naught. Even when Section 5-A of the Act has been held to be a good law, that does not preclude any affected person from challenging the valuation tables on the grounds that the same are arbitrary, discriminatory and unrelated to the purposes and the guidelines available in the Act. The law may be good, but if the act performed thereunder suffers from such a vice that it does not conform to- the provision of law itself, the same cannot be saved, In other words, if the valuation tables intended ostensibly to combat an evil, are misused for a perverse, ulterior or extraneous object, Section 5-A would not serve as a shield to the valuation tables, In such an event, even though Section 5-A is upheld a valid piece of legislation, the valuation tables cannot be saved, and will be sentenced to death.

17. The validity of the valuation tables has been challenged mainly on the ground that the whole gamut of procedure laid down in Section 7 of the Act read with Rule 5 of the Rules; Section 8 read with Rules 6, 7, 8 and 10 of the Rules; Section 9 read with Rules 9 and 11 of the Rules, has not been observed before finalising the valuation tables. On the other hand, submission of the learned counsel for the Department is that, in the pjeparation of valuation tables, observance of procedure as laid down in the various provisions of the Act and the Rules, just mentioned, was not necessary, particularly when valuation tables are poles apart from valuation lists, and that based on valuation tables, while preparing valuation lists, the entire procedure has been adhered to by the concerned Assessing Authorities. A perusal of the valuation tables shows that both residential and commercial properties have been divided into seven classes, i.e. 'A' to 'G'. Then, each category of properties has been further subdivided into two categories, those which are located on main roads, and those which are off the roads. Of each property, covered area and land area have been separately assessed. Not only that, small chunks of land and building have been treated separately than those covering larger areas. Self-occupied buildings and lands have been treated differently than the rented buildings and lands. Above all, according to the status of the buildings and lands, rates of tax have been determined. A perusal of the valuation tables would reveal that whereas tax of 'A' class self-occupied buildings located on main roads has been determined at the rate of forty paisas per sq. Foot for the first 3000 sq. Ft. Covered area, and at the rate of thirty paisas per sq. Foot for the covered area exceeding 3000 sq. Ft., the rate of tax of a building located off main roads has been determined at paisas thirty and twenty-five, respectively.

The rate of tax gradually decreases with the decrease in the status of the building and the rate of tax of a building of 'G' class located off the main roads has been fixed at seven paisas and four paisas, respectively. Those who are owners of buildings beyond their on personal requirements and are enjoying rent, thereof had to be treated differently, and are required to pay more tax. Detailed exercise had been undertaken with regard to each category of properties in order to determine monthly rental according to the size of landed property and buildings, their assumed rentability, as per slabs, and the tax which may reasonably be levied taking into consideration all the necessary factors. Be that as it may these are only standard valuation tables. The respondent-Department has brought on record evidence to show that subsequent to the notification of these standard valuation tables, the Assessing Authorities had undertaken the exercise and, after observing the entire procedure laid down in different provisions of the Act and the Rules as discussed above, each property located in the Province has been so categorized as to be covered by either of the fourteen categories (each of seven categories 'A' to 'G' having been further divided into two categories, i.e. Located on main roads and off the roads), and valuation lists have been prepared by not only taking into consideration entire pros and cons meticulously, but by giving due publicity to the draft valuation lists and after hearing objections. According to the details provided by the Department, there are 24,45,665 property units in the urban areas of the Province of Punjab, out of which only 11,69,207 property units are taxable, whereas 12,76,458 are non- taxable. Again, out of taxable property units, 7,10,524 are residential and 4,67,683 commercial. Besides, out of residential property units, 4,91,067 are self-occupied and 2,10,457 are rented whereas out of commercial property units, 2,80,610 are selfLoccupied and 1,87,073 are let out. Cumbersome exercise was taken by the Assessing Authorities to collect relevant data for determination of class aod category of each individual property. Information has also been provided with regard to the objections filed. For instance, 3785 owners of properties falling in Lahore Region 'A' whereas 480 owners of properties located within Lahore Region 'B' had filed objections to the draft valuation lists notified by the concerned Assessing Authorities which were reportedly duly considered .And disposed of. Relevant extracts , from Register of Objections (Form P.T.7) have also been brought on record. Similar information about some of the other rating areas has also been brought on record to demonstrate that draft valuation lists were duly published, objections invited, received, heard and disposed of before finalising the valuation lists, whereafter process of appeals had started. According to the record made available by the Department, 12,974 appeals had been filed upto October, 2002 against the final valuation lists. According to the departmental representative, as on 31st of December, 2001, valuation lists of seventy-three (73) out of total of one-hundred and seventeen

(117) rating areas had been finalised; valuation lists of thirty (30) rating areas had been finalised by 30th of June, 2003; valuation lists of thirteen (13) rating areas would be finalised on 30th of June, 2004 and of the remaining one (1) rating area would be finalised on the 30th of June, 2005.

Whereas demand pertaining to 117 rating areas has already been created for the period commencing 1st of January, 2002 and w.e.f. 1st of July, 2003, about the remaining 14 would be created upon finalisation of valuation lists as mentioned above.

18. Furthermore, besides providing guidelines to the Assessing Authorities with regard to determination and levy of tax on different classes and categories of properties, detailed guidelines have been given for determination of rentability of properties which for any reason peculiar to a particular building or land, may be found not covered by any of the fourteen general categories of.

Buildings and lands. For instance, about plazas and rented multi-storeyed buildings, the Assessing Authorities have been advised that while determining rentability of such buildings, 10% reduction for each floor above and below ground floor/inter-floor, subject to a maximum 50% of the rate Specified in the valuation table h as to be given. Rentability of 20'years old properties is to be determined by giving allowance of 10% less because of their old age. Rentability of seasonal used properties, cotton ginning factories, rice husking mills, oil mills, Ice factories, etc., is to be reduced by 50%. On the other hand, addition of 5Q% in the residential rates (self or rented, as the case may be) as specified in the valuable tables has to be made if the buildings and lands are used as offices or educational institutions. Guidelines for determining; rentability of Hotels, Hospitals, Marriage Halls, Cinemas, Petrol Pumps, Industrial Units and agricultural land located with urban areas have also been provided for assistance of the Assessing Authorities. Not only that, during the pendency of some of these writ petitions, the Department issued instructions on the 19th of March, , 2003 that even in cases of localities which have been assigned a particular class/category, the "pocket areas which due to their peculiar conditions may have lesser rentability than the one determined on the basis of the category of that locality, the Assessing Authority/Appellate Authority may assign a different category to such pocket areas depending on their rentability. By yet another Notification of the same date, reproduced in the beginning of this judgment, the Government has constituted a Committee comprising

(1) Additional Director-General, Excise and Taxation, (2) Deputy Secretary (Technical) Excise and Taxation Department and (3) concerned District Officer, Excise and Taxation to function as "Appellate Authority" "in respect of exceptional cases where the annual value of a particular property determined on the basis of the category of the locality in which it falls as per valuation tables, appears to be excessive in view of any peculiar disability.Affecting the rentability of that property". By the same Notification, the Government has appointed "Director-General Excise and Taxation, Punjab" to exercise the powers of "Revisional Authority" in respect of the decisions of the "Appellate Authority" mentioned immediately hereinbefore. The appointment of the said Appellate and Revisional Authorities is in addition to the appellate and revisional authorities, i.e., Collectors and Commissioners concerned,'as envisaged by Section 10 of the Act. Thus, an attempt has been made to provide a foolproof system even for individual grievances. I would, therefore, hold that the procedure laid down for observance by the Assessing Authorities while preparing valuation lists, was not sine qua non for preparation of valuation tables, and that since the procedure had been complied within letter, and spirit by the Assessing Authorities before finalising the valuation lists, neither there has been violation of any provision of law nor the assessee (petitioners herein in particular) hve suffered any prejudice. Be that as it may, I am clearly of the view that upon proper construction of Section 5 of the Act read with Rule 6 of the Rules, the "annual value" of any land or building is not necessarily the actual rent received by the owner of the land or building, and if rent is fixed bona fide by the owner and represents actual rentability of. The land or building that would be an important factor for the Assessing Authority to consider, but the rent received by the owner cannot, in all circumstances, be a conclusive proof of previous annual value as contemplated by the Act read with the Rules, In the view of the matter I take, the contention of the learned counsel for the petitioners is not sustainable and neither Section 5-A no'r the impugned valuation tables, prepared thereunder can be struck down on thus ground.

19. Learned Advocate-General contended that even if it be assumed, for the sake of argument, that Section 5-A was departure from Section 5, then too the same cannot be annulled, because of the fact that Section 5-A opens with a non obstante clause. He referred to Articles 48(2), 58(2) and 91 (2A) of the Constitution, where similar non obstante clauses have beep used. The decisions reported as Federation of Pakistan v. Muhammad SaifuJIah Khan (PLD 1989 S.C. 166 at page 1 88) and Mst. Rafia Ahmad v. Excise and Taxation Officer and others (1992 SCMR 1941 at page 1959) and fully support the submission of the learned Advocate-General. Reference may, with advantage, be made to a Division Bench decision of High Court the of Sindh at Karachi reported as Golden Industries Ltd. v. Province of Sindh (PLD 1983 Kar. 76) wherein vires of Section 8-A, added to the Urban Immovable Property Tax Act, 1958, by the Sindh Finance Act (No. VII) of 1977, opening with a similar non obstante clause, viz. "Notwithstanding anything contained in this Act" came under challenge. Besides holding that the provision was .Intra vires of Constitution and the legislative power of the Provincial Assembly of Sindh, it was found that it did not offend against Article 25 of the Constitution which guarantees equality of citizen before law, although Section 8-A provided a basis for assessm ent of the property tax only in respect of industrial properties located within Karachi Rating Areas and its validity was attacked on the ground that it was discriminatory. I am, therefore, of the view that Section 5-A is a valid piece of Legislation, and so are the valuation tables prepared pursuant thereto.

20. Learned counsel for the petitioners attempted to make mountain out of a mole. Reliance was placed on the following averments in the Parawise Comments submitted by respondent No. 4 (The District Excise and Taxation Assessing Authority, Zone-11, 2-Faridkot, Lahore):- "It is not respondent No. 4 who is authorized to prepare the valuation tables of fair market rents of immovable properties in a Renting Area. Respondent No. 4 as a subordinate authority is supposed to abide bv the dictates and decisions of respondent No. 1." (Emphasis added).

It was contended that by preparing and notifying the valuation tables, the Government has virtually robbed the Assessing Authorities of their statutory powers and functions under the Act and the Rules, as was apparent from the miserable table divulged by respondent No. 4. The contention proceeds on total legal and factual misconception, In the first instance, it may be mentioned that the Parawise Comments of respondent No. 4 have to be read as a whole. Only one sentence thereof, detached from other parts, cannot be read. The same respondent, and in the same reply, had pleaded inter alia as follows:- "The valuation tables of fair market rents have been prepared keeping in view the situation and statutes of the immovable properties in a locality which has been categorized in accordance with the civic amenities and prevailing reasonable rentability of both commerCiaTand residential units in the area." "The valuation tables have been prepared in line with para. 7 of the judgment dated 26.4.2001 passed by this honourable Court in Writ Petition No. 4799/2001. Draft valuation lists and final valuation lists have been prepared by respondent No. 4 after observing all codal formalities including public notice, survey, publication of proposed assessment, calling for arid disposal of objection petitions under Sections 6, 7 and 9 of the Punjab Urban Immovable Property Tax Act, 1958 and Rules made thereunder".

To say that he being a subordinate authority was supposed to abide by the dictates and decision of the Government, respondent No. 4 was referring to the direction of the Government contained in the Notification, dated the 13th of October, 2001 wherein it was mentioned "that the D.Os./D.D.Os. Will not be authorised to change the figures recorded in the valuation tables, since it will remain the same throughout Punjab." It was further mentioned in the said Notification that "the format for the re-assessm ent of urban immovable properties throughout the Punjab" was a "uniformed formula".

Whereas the Assessing Authorities had the power of determine on the basis of ground realities, after proper survey, as to which class or category of the valuation tables, each property within their rating1 area' fell, no furtfier discretion was left with the Assessing Authorities in the matter of determination of tax, which had to be calculated according to the formula laid down in the valuation tables. The valuation tables contain a menu of yardsticks depicting the range of reasonable rentals in. The Province. The Assessing Authorities have been authorized to select the appropriate yardstick out of this menu and apply it to a particular locality. The Assessing Authorities rely upon multiple sources of information for determining reasonable rentability of localities, i.e. Selection of yardstick; (i) old valuation list as benchmark date; (ii) current survey after public notice; (iii) current sample data, and (iv) market intelligence and empirical observations. Thus, it is wrong to say that by the introduction of valuation tables, the Assessing Authorities had been relegated to a position of a showpiece. Because of the absolute discretion earlier enjoyed by the Assessing Authorities, they had imperialist overtones which ' had caused severe dents on the credibility of the Excise andjtTaxation Department as a whole, and it was in a bad light, as argued by the learned Advocate-General and by Mr. Sahgal who represented the Department. According to them, corruption had gained ground so much that it ceased to be a news in the Department, and barring rare exceptions, everybody there had his fingers in the till, It used to be said that corruption was one of those things which the said Department could live with, but.Knew no way to live without. t

21. The matter can be looked at from another angle. Section 3-A added by the Punjab Finance Act (No. XL) of 1975 reads as follows:- "3-A. Share of local bodies in the tax.- Out of tax collected under this Act from within the limits of a Metropolitan^ Corporation, a Municipal Corporation, a Municipal Committee, a Town Committee, a Cantonment Board or any other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund, the Government shall, after retaining five per cent thereof as collection charges, pay eighty- five per cent of the balance to such Metropolitan Corporation, Municipal Corporation, Municipal Committee, Town Committee, Cantonment Board or any other authority, as the case may be."

Thus, out of the property tax collected from the taxpayers, only a negligible percentage is retained by the Government which can hardly be sufficient to meet the expenditure spent by the Government itself . In connection with the collection thereof. The major chunk of the tax collected is diverted to the local bodies for utilisation bn development programmes undertaken by (such local bodies for the well-being of the common man. It is thus a beneficial legislation. While construing such a legislation, the Court has to show a complete consciousness and deep awareness of the growing requirements of the society, the increasing needs of the nation, the burning problems of the day, arid the complex issues facing the people which the legislature, in its wisdom, through beneficial legislation, seeks to solve. The judicial approach has to be dynamic rather than static, pragmatic and not pedantic, and elastic rather than rigid. The Court should take into consideration the changing trends of economic thought, the temper of the times, the living 'aspirations and feelings of the people. While acting as a sentinM*rf the qui vive to protect fundamental rights guarantg^fcl by the Constitution to the citizens of the country, the Court has to strike a just balance between the fundamental rights and the larger and broader interests of society, so that when such a right clashes with, the larger interest of the society, it must yield to the latter. Moreover, where the legislature, in its wisdom, considers necessary to solve human problems, even the text of reasonableness has to be viewed in the context of the issues faced by the legislature. Every attempt has to be made to further the social interest which the legislature proposes to promote, In such circumstances, the Court does not function in vacuo, but as a part of the society trying to achieve a social concord, and to further material progress of the community as a whole. None but those who live in Ivory Towers can refuse to look at the realities of life as well as the ground realities dealing with such a case, regressivenn nature. The law may be blind, but the Judges are not. Of Judges, no one should expect that they shall sit as mute spectators. Let a message go to all those who have inculcated a fixed habit of evasion of taxes, that in their wealth, weak and poor have a share. They must contribute ungrudgingly towards,the welfare of downtrodden classes needy, poor, deserving and common man in the society. Of late an irretrievable trend has been seen that rich have gone the richer, and the poor driven to below poverty level, It is a misnomer that only Courts administer social justice, whereas every citizen, if he is in affluent circumstances, must ensure that within his on sphere he must divert his resources towards cnannalising social justice.

Even if false sections of bigwigs may not permit their conscience to see the common man on an even keei, at least respectable place in the society can be ensured for them. Let us not make them a symbol of contempt in the society, It is no denying the fact that the legislature is in the best position to understand and appreciate the needs of the people to bring about social reforms for the upliftment of the backward and the weaker sections of the society and for the improvement of the lot of poor people. The Court may interfere with the process only when the enactment is found to be beyond the legislative competence, because there is always a presumption in favour of Constitutionality of a statute and the burden is on him who attacks it, to show that there has been a clear violation of the Constitutional principles, In Maxwell on the Interpretation of Statutes, Twelfth Edition, it is stated as follows:- "If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose of bringing about an effective result." (page 45)

"Nevertheless, even where the usual meaning of the words falls short of the object of the legislature, a more extended meaning may be attributed to them, if they are fairly susceptible of it. Previous editions of this work have referred to this relaxation of strictly literal principles of interpretation as beneficial construction: and the modern cases provide many instances of the Judges' reluctance to stand upon the letter of a statute. They will not, of course, supply omissions, but where they are faced with a choice between a wide meaning which carries out what appears to have been the object of the legislature more fully, and a narrow meaning which carries it out less fully or not at all, they will often choose the former. Beneficial construction is a tendency, rather than a rule."

"It is said to be the duty of the Judge to make such construction of a statute as shall suppress the mischief and advance the remedy. To this end, a certain extension of the letter is not unknown, even in criminal statutes." x For what has gone above, I am of the considered view that if we read Sections 3-A and 5-A together, the main, rather the only object sought to be achieved is the well-being of the common man for whose larger benefit, valuation tables have been prepared, without unreasonable classification; persons in .Similar circumstances and properties situated alike having been taxed alike.

22. There is another equally important aspect of the matter which may be referred to at this stage.

(Vol.XXIlI Muhammad Fiaz V. Govt, of Punjab C.C. 331 (Muhammad Ghani, J.j According to the information supplied by the Department, there are 11,69,207 taxable property units in the Province of the Punjab, which consists of thirty- four (34) Districts. The following table would reveal the number of Writ Petitions filed from each District:- S.No. District No. Of W.P.

1. Attock. - ,

2. Bahawalpur. -

3. Bahawalnagar . ..

4. Bhakkar. -

5. Chakwal. -

6. D.G. Khan.

7. Faisalabad. 62

8. Gujranwala. 57

9. Gujrat. 2

10. Hafizabad -

11. Jhang. 1

12. Jhelum -

13. ' Kasur. 2

14. Khushab. 1

15. Khanewal. 2

16. Lahore. 343

17. Layyah.

18. Lodhran. -

19. Mandi Bahauddin. 2

20. Multan. -

21. Muzaffargarh. -

22. Mianwali -

23. Narowal. -

24. Okara. 3

25. Pakpattan. -

26. Rajanpur 332 C.C. Key Law Reports 27. Rahim Yar Khan.

28. Rawalpindi. 1

29. Sialkot. 1

30. Sheikhupura. 3

31. Sargodha. 7

32. Sahiwal. 4

33. Toba Tek Singh. 4

34. Vehari. -- From aDOve information, it is clear that no writ petition has been filed from eighteen (18) Districts out of total of thirty-four (34) Districts of the Province. Only negligible number of writ petitions have been filed from Kasur, Sargodha, Jhang, Rawalpindi, Sheikhpura, Okara, Toba Tek Singh, Khushab, Mandi Babauddin, Gujrat and Sialkot. Excluding Lahore, Faisalabad and Gujranwala, oniy 33 writ petitions hve been filed from the remaining Districts of the Punjab. So far as writ petitions filed from Gujranwala and Faisalabad are concerned, they pertain mainly to commercial properties, barring a few exceptions pertaining to house properties. A little more than 300 writ petitions filed from Lahore District, pertain mainly to City areas. Hardly there is a petitioner who belongs to a common class. Most of them are owners of Cinemas, Factories, Multi-storyed buildings, Composite buildings and Houses in posh localities etc. About eighty (80) writ petitions pertain only to Fruit and Vegetable Markets, located at Link Badami Bagh Road, Lahore. The petitioners of such petitions are owners of composite buildings, consisting of godowns, shops, offices, residential portions, and of cold stores etc. For instance, the petitioner of the case (Writ Petition No. 5700/2002) in which this judgment is being delivered, feels aggrieved of the demand of property tax amounting to Rs.1 6,939.00 for the period 1 st of July to 31st December, 2002 as against the previous demand of Rs.1,553.00 for the period 1st of July to 31st of July, 2001. In paragraph 2 of the petition, it is stated that the petitioner "is owner of Building No. 2, Fruit Market, Link Badami Bagh Road, Lahore which comprises of godown in the basement, office at the ground-floor and accommodation for the growers etc. At the first and second floors. This is a composite building owned by the present petitioner". The petitioner has not mentioned the area upon which the building has been constructed. Surely,-it is not a bed by night and a chest of drawers by day. Those who have had the occasion to visit the Vegetable and Fruit Markets know that almost all buildings have basements used as godowns; at least about a dozen of shops on the ground-floor; rooms; with necessary amenities on the first floor (if it is only a double-s'toryed building) for residential purposes, whereas the last storey is used partly for offices and partly for entertaining visitors. The entire locality is commercial.. Daily business carried at site runs into lacs of rupees. The petitioner is a "wholesale" dealer, It is not a mini-shop of a little man. It is not a place where little men ply little crafts, where poor tradesmen like candle-stick makers and tanduri-bakers trade and live in. The amount of property-tax now claimed from the owners of this locality looks to them to be exorbitant because they have developed the habit of paying only a negligible amount. The life-style of the people shapes the profile of the law and not vice versa. Law, not being an abstraction but a pragmatic exercise, the legal inference is to be drawn from prevailing circumstances. Our country, as a sovereign borrower, had been penalised by the International Monetary Fund, World Bank and other International Lending Institutions primarily for the reason that instead of depending on self- generated resources we have been meeting our needs on borrowings and a stage came when our country was at the brink of being declared a "defaulter". We never thought that every rupee spent on external debt servicing left the country. If that rupee was spent at home, common man would have benefited. Since we had never thought of minimizing contact between tax-payers and tax- collection, improvement in the quality of tax administration and relief against excesses of tax- collectors, could not be achieved. If we want to help the poor and the middle class segments of the population more tax-payers will have to be brought under the net, and wide-spread evasion of tax will have to be reduced, In the past poor had suffered the most, and elites had driven most of the benefits through connections and influence peddling. Reorientation of our institutions, therefore, calls for tough actions. We should no more be contingent on the financial assistance of the International Lending Institutions. Let us traverse the road ahead without their assistance, rather there should be an exit to their programme.

23. Learned counsel for the respondent- Department further submitted that a similar provision i. e. Section 5-A had also been inserted in the Urban Immovable Property Tax Act, 1958, by the Sindh Finance Ordinance, 2000 which is to be the following effect:- "5-A. Valuation Tables to ascertain annual value:- Notwithstanding the provisions of Section 5 the annual value may be determined on the basis of the valuation tables as may be notified by or under the authority of Government of various locations".

Submission of the learned counsel for the respondent- Department is that the property tax is being claimed in the Province of Sindh on the basis of valuation tables prepared and notified by the Sindh Government, and that no exception has been taken to the same. Learned counsel for the petitioners, however, entered caveat to this submission, and contended that petitions challenging the levy of tax have been filed in the High Court of Sjndh at Karachi, and the same are pending. The contentions raised by the parties, being divergent, and there being no material available on record of these writ petitions in proof or disproof of their pleas, I would make no comment.

24. The decision of Mr. Justice Iftikhar Hussain Chaudhary (as his lordship then was, now the Hon'ble Chief Justice of this Court) rendered in Writ Petition No. 1225/1994 and other similar Writ Petitions on he 19th of June, 1995, which pertained to the levy of property tax by the Capital Development Authority has also been relied upon by the learned counsel for the Department. In that case, S.R.O.

No. 806(l)/91, dated the 20th of August, 1999 was issued by the Federal Government in exercise of powers conferred on it by Rule 6(1) of the Capital Development Authority (Imposition of Taxes)

Rules, .1981, sanctioned levy of property tax in Islamabad at the rates and on the conditions mentioned in the said S.R.O. The vires of the S.R.O, were challenged in this Court through Constitutional petitions wherein it was held that "property tax was levied and collected by the CDA under proper authority of law, and valid Notification in this regard was issued. "Consequently, the writ petitions were dismissed. The aggrieved persons approached the apex Court. The decision of the Hon'ble Supreme Court is reported as Mrs. Bilqees Anwar Khan ,v. Pakistan (2001 PSC (Pak) 387).

The appeals were dismissed by observing inter alia as follows:-

13. "The property tax imposed hereinabove is very nominal in comparison to the rates of property charged by the authorities under the provisions of Urban immovable Property Tax Act in all over the country. Moreover Part B of the S.R.O, prov'des exemption, which appears to be reasonable, rational and wise. The tax levied by the respondent is within the legal parameters of Section 15-A read with Sections 33, 34 alongwith Schedule III referred to above. The tax in question has been imposed after observing all proper and legal formalities required under the law and with the sanction of the Government. The CDA is also providing necessary civic amenities to the people which are normally provided by the Locai Councils, with the result that Islamabad is very neat and clean area of the country. So far as the contention of Mr. Ahmad Raza Khan Kasuri, Advocate, that under Article 77, of the " Constitution tax is not to be paid for the purpose of Federation, is concerned, in any case, the tax has not been charged for the Federation and further, as mentioned above, the amendment made in the CDA Ordinance, by insertion of Section 1 5-A is quite legal and within the established principles of law.

14. We have also gone through the impugned judgment, whereby each and every objection and contentions raised by the appellants have duly be considered, analyzed and examined by the learned Judge of the High Court in Chambers with sound, cogent and plausible reasons. \

15. In view of what has been stated above, we are of the considered opinion, that these appeals are without merit and substance, which must fail and the same are hereby dismissed alongwith the listed applications."

[Vol.XXIlI Zulaikha Mahmood V. P.O., Khalida Yaseen C.C. 345 (Sabihuddin Ahmed, J.)

ORDER

SABIHUDDIN AHMED, J.- The petitioner has called in question an order of the learned Banking Court directing re-auction of property proposed to be sold in execution of a decree, It appears that after publication of a sale proclamation offers were invited for purchase of an apartment owned by the judgment-debtor. Three offers were received on the initial date of offer i.e. 28.8.2001 and the petitioner's offer of Rs. 3,80,000/- seems to be the highest. However, the learned Judge apparently considering, prima facie, that the offer was low directed that the market value of the property be ascertained. Thereafter, the respondent No. 5 submitted an application offering to purchase the property for Rs. 4,05,000/-. The learned Banking Court recorded an order to the effect that the offer of respondent No. 5 could not be accepted but if the aforesaid respondent agreed to pay the cost of auction, re-auction could be ordered. The respondent No. 5 agreed to do so whereupon the Court passed the impugned order.

Mr. Muhammad Arshad Iqbal, learned counsel for the petitioner, has argued that after the petitioner's bid was found to be highest and he had deposited the entire sale consideration in terms of Order 21 Rule 85, CPC his bid had to be accepted and a sale was required to be made on the basis of such bid unless it could be set aside on the limited grounds laid down in Rules 89, 90 and 91 of Order 21, CPC. Learned counsel further contended that the respondent No. 5 did not have any prior interest in the property and, therefore, his application could not be treated as one under Order 21 Rule 89. CPC.

The arguments which, prima facie, seem to carry force tails to notice that Rules 89, 90 and 91 of Order 21, CPC come into play only when an offer of sale of property has been accepted by the Court. The expression "may apply to have the sale set aside" occurring in Rule 89, CPC clearly shows that there must first be an order of the Court which is required to be set 'aside on certain grounds. The documents placed before us clearly show that no such order was made by the Court.

The only two orders which have been placed on recorded show that in the first one the Court had directed that market price of the property be ascertained and in the second one had directed that the property be re-auctioned. Moreover, the sale notice itself indicates that the tentative price of the property was considered to be Rs. 4,50,000/- by the Court. We are, therefore, of the view that in the absence of an order accepting the petitioner's bid no right can be deemed to have arisen and the petition is liable to be dismissed alongwith the listed application. There shall be no order as to costs. .