PEARL CONTINENTAL HOTEL and another vs GOVERNMENT OF N.W.F.P. and others
This petition for leave to appeal arises from a judgment of the Peshawar High Court dismissing a constitutional petition challenging the levy of hotel tax and the vires of the N.-W.F.P. Hotel Tax Rules, 2003. The core legal questions involve whether the rules and the amending ordinance were framed and protected in accordance with the Constitution of Islamic Republic of Pakistan, whether Rule 4 of the said rules is ultra vires section 4 of the N.-W.F.P. Finance Ordinance (Ordinance No. XXIII) 2002, and the correct interpretation of the charging provision. The Supreme Court granted leave to appeal to examine these questions, while granting interim relief subject to the petitioner paying the hotel tax under section 4 of the amending ordinance and furnishing an undertaking to reimburse any balance found due upon final adjudication.
- Whether the N.-W.F.P. Hotel Tax Rules, 2003 have been framed by the Provincial Government with competent authority when the enabling section incorporated in the Ordinance was not laid before the Provincial Assembly within the period prescribed under Article 128 of the Constitution of Islamic Republic of Pakistan?
- Whether the N.-W.F.P. Finance (Amendment) Ordinance, 2003 has been protected under the 17th Amendment to the Constitution?
- Whether Rule 4 of the N.-W.F.P. Hotel Tax Rules, 2003 has been promulgated beyond the scope of section 4 of the N.-W.F.P. Finance Ordinance (Ordinance No,XXIII) 2002 and is thus ultra vires?
- Whether the High Court has correctly incorporated the expression used in section 4 of the Finance Ordinance relating to lodging units and room rent?
- Section 4, N.-W.F.P. Finance Ordinance (Ordinance No,XXIII) 2002
- Section 5, N.-W.F.P. Finance Ordinance (Ordinance No,XXIII) 2002
- Article 128, Constitution of Islamic Republic of Pakistan
ORDER
' IFTIKHAR MUHAMMAD CHAUDHRY, J.---This petition has been filed for leave to appeal against the judgment of Peshawar High Court, Pe.Shawar dated 3rd November, 2004.
2. Petitioner-Pearl Continental Hotel (hereinafter referred to as "petitioner-hotel") received a notice dated 5th August, 2002 from Excise and Taxation Officer, calling upon it to produce all relevant record for the purpose of levying Hotel Tax under section 4 of the N.-W.F.P. Finance Ordinance (Ordinance No,XXIII) 2002 [hereinafter referred to as "the Ordinance"]. 'But without considering the record, the Excise Department passed an order on 5th March, 2003 in pursuance whereof an amount of Rs,15.449 millions, being tax was levied upon it for the years 2002-2003. Petitioner-hotel preferred appeal before the Director-General Excise and Taxation, Government of N.-W.F.P. But no relief was given despite arguing the case through duly authorized representative. Inasmuch as, a copy of the appellate order was not made available and in the meantime, coercive measures were adopted to recover the said tax. Under these circumstances, a writ petition was filed before the Peshawar High Court. Meanwhile, the Government of N.-W.F.P. Vide Ordinance No,VII, amended the earlier Ordinance wherein section 5 was added, authorizing the Government to make rules - to carry out the purposes of section 4 of the Ordinance. Consequently, in exercise of such powers, on 12th December, 2003, the Government of N.-W.F.P. Notified the N.-W.F.P. Hotel Tax Rules, 2003 [hereinafter referred to as "the Rules"], is such petitioners challenged the vires of the same.
According to Rule 4 of the Rules, relating to "maximum charges for lodging unit in a Hotel" a new concept has been introduced, contrary to section 4 of the Ordinance, namely "the lodging units in a hotel on which the tax worked out for the year shall be maximum number of lodging units or the maximum charges made for a lodging' unit on any day, during the year for which the tax is assessed." Learned Peshawar High Court vide impugned judgment dismissed the writ petition, as such instant petition for leave to appeal has been filed.
3. We have heard learned counsel for petitioners, respondents as well as Additional Advocate- General (N.-W.F.P.). In our considered opinion, following questions emerge for examination:-
(1) As to whether the N.-W.F.P. Hotel Tax Rules, 2003 have been framed by the Provincial Government with competent authority because section 5 incorporated in the Ordinance, conferring powers upon Government of N.-W.F.P., was not laid before the Provincial Assembly, for making it as Act of the Provincial Assembly, within the period of three months from its promulgation as per Article 128 of the Constitution of Islamic Republic of Pakistan?
(2) Whether the N.-W.F.P. Finance (Amendment) Ordinance, 2003 has been protected under 17th Amendment, 2003 of the Constitution, if so, to what effect?
(3) Whether the Rule 4 of the Rules has been promulgated beyond the scope of section 4 of the Ordinance; if, so, being ultra vires to the Ordinance, deserves to be struck down?
(4) Whether the High Court has correctly incorporated the expression used in section 4 of the Finance Ordinance, 2003 namely "lodging units available at the rate of 5% of the room rent per lodging unit per day"?
4. Thus leave to appeal is granted, inter alia, to examine the above questions.
5. C. Misc. A. No,3720 of 2004. Petitioner shall pay hotel tax according to section 4 of the N.-W.F.P.
Finance (Amendment) Ordinance, 2003, for the past and future assessment years, pending decision of appeal, arising out of this petition. Petitioner is also directed to furnish an undertaking to reimburse the balance of the amount, if ultimately found due at the final decision of appeal.
' As short points are involved in the matter, therefore, office is directed to prepare the appeal on the same record, with liberty to the parties to file additional documents in support of their respective contentions, if need be, whereafter appeal be fixed for hearing within a period of three months.