ASHFAQUR REHMAN Versus GOVT. OF PUNJAB

1. This case involves certain discussion of two types of taxes which are known as (a) Corporation or Municipal Tax levied under laws relating to Municipal Committees or Municipal Administration on buildings and lands situated within municipal area on the one hand and (6) Provincial Tax levied by the Provincial Legislature itself under the -relevant laws on properties situated in the Province, History of Corporation Tax in Lahore (or to be more precise in area known as Model Town) and the facts relevant in that respect are as follows:-

2. History of Corporation Tax (also known as House Tax) under Municipal Laws

2. Petitioner is owner of a property bearing No. 99-PP-6-B, situate within the local limits of a society known as "The Model Town Co-operative Society", Lahore, which was registered under the Co-operative Societies Act, If of year 1912. It has been established before me as discussed hereinafter that the property is also located within the local municipal limits of the Lahore Municipal Corporation. Section 61 of the Punjab Municipal Act, III of 1911 authorised a Municipal Committee to impose in the whole or in part of the Municipality a tax payable by the owners of building and lands A situated therein. In pursuance of the provisions aforesaid the Lahore Municipal Committee issued a Notification bearing Nos. 635/LG-Bds-39/5085 dated the 8th February 1939, which was published in the Punjab Gazette, Part I-A, dated 10-2-1939, page 100, which reads as follows :-

3. "No. 635-L.G-Bds-39/5085.-(a) Whereas the Administrator of the Municipality of Lahore has proposed for the previous sanction of the Punjab Government under proviso (i) to section 61(1) of the Punjab Municipal Act, 1911, the imposition within the Lahore Municipal Area of the following tax, viz., a tax-(Payable by the owner)-on buildings and lands at the rate of 121 per cent. per annum on the annual value as defined in section 3(1) of the said Act,

(b) and whereas the Governor of the Punjab under the first proviso to section 61(1) of the Act has accorded his previous sanction to the Administrator's proposal as aforesaid reducing, however, the amount of the tax from 121 per cent. per annum on the annual value to 10 per cent. subject to any further remission allowed by law,

(c) and whereas the Commissioner of the Lahore Division has under section 62(7) of the Municipal Act sanctioned the proposals of the Administrator in the form in which those proposals received the previous sanction of the Punjab Government;

4. The Governor of the Punjab, in pursuance of the provisions of section 62(10) of the Municipal Act, hereby notifies the imposition of the said tax in accordance with the order of the Commissioner of the Lahore Division, and declares that the same shall come into force with effect from the 1st July 1939."

5. On 19th May 1942 there was enforced the City of Lahore Corporation Act 1941-(Punjab Act XV of 1941). Chapter XI of Part IV of this Act which consisted of section 102 to section 141 dealt with taxation. Sub section (1) of section 102 of that Act stated that for the purposes of this Act, the Corporation shall impose a tax on lands and buildings to be called "the property tax". (For present discussion to maintain a distinction I will hereafter refer to it as a Corporation Tax or House Tax). Section 104 stated that a Property Tax of not less than ten per cent. of the annual valuation determined under this Chapter shall be imposed by the Corporation upon all lands and buildings in the City, including land and buildings belonging to the Crown but excluding property vested in His Majesty for the purposes of the. Central Government. The subject was further dealt with in sections 105, 106 and 107 of the said Act. Subsection (1) of section 2 stated, that on the commencement of this Act, the Municipality of Lahore shall save as herein after provided be deemed to have been withdrawn from the operation of the Punjab Municipal Act, 1911. Subsection (2) of section 3 inter alia provided that every--tax-imposed-under the Punjab Municipal Act, 1911, shall so far as it relates to the Municipality of Lahore and so far as it is in force at the commencement of, and is not inconsistent with this Act, be deemed to have been-imposed--kinder the provisions of this Act, and shall unless previously altered, modified, cancelled, suspended, surrendered or withdrawn, as the case may be, under this Act remain in force for the period (if any) for which it was so imposed--------. Subsection (4) of section 3 laid down that all rates, taxes and sums of money due to the Municipality of Lahore or to the Administrator when this Act comes into force shall be deemed to be due to the Corporation. Section 132 gave powers to the Provincial Government to exempt any person or class of persons or description of property from taxation. This section reads as follows:-

6. "Section 132. Powers of the Provincial Government in regard to taxes. (1) The Provincial Government may by order exempt in whole or in part from the payment of any such tax any person or class of persons or any property or description of property.

(2) If at any time it appears to the Provincial Government, on representa tion made or otherwise that any tax imposed by or under this Act is unfair in its incidence or that the levy thereof or of any part thereof is injurious to the interests of the general public, it may require the corporation to take within a specified period measures to remove the objection; and, if within that period the requirement is not complied with to the satisfaction of the Provincial Government, the Provincial Government may by notification suspend the levy of the tax or of such part thereof until the objection has been removed."

7. Purporting to act in exercise of the powers conferred by subsection (1) of section 132, the Governor of the Punjab, issued a Notification bearing No. 3416-LG-43/57072 dated the 9th September 1943, published in the Punjab Gazette, Part I-A, dated the 17th September 1943, page 350. This Notification reads as follows:-

8. "Local Government Department

9. Boards

10. The 9th September 1943

11. Nos. 3416-LG-43/57072.-In exercise of the powers conferred by subsection (1) of section 132 of the City of Lahore Corporation Act, 1941, the Governor of the Punjab is pleased to exempt, with effect from 1st January 1940, all lands and buildings situated within the area administered by the Model Town Co-operative Society, the boundaries of which are given in the Schedule below, from the payment of the tax the imposition of which was notified with the Punjab Government Notification Nos. 635-LG-Bds: 39/5085, dated the 8th February 1939:

SCHEDULE

12. North ......................... ... Village land of Jiwanhana;

13. South ......................... ... Village lands of Pindi and Kot Lakhpat;

14. East ... Lahore Ferozepur Road,

15. West ... Village Lands of Baikhewal and Ajudhiapur."

16. So far as the history of legislation of Municipal or Corporation tax is concerned it may be noticed that the City of Lahore Corporation Act was repealed and replaced by the Municipal Administration Ordinance X of 1960-(hereinafter called the M. A. O.)-whereunder with effect from 1-7-1962 were framed the West Pakistan Municipal Committees (Buildings and Lands Tax) Rules, 1.962 framed under section 41 read with section 121 of the said Ordinance. Last of all in this respect is section 3-A which was added in the West Pakistan Immovable Property Tax Act V of 1958 by Punjab Finance Ordinance XI of 1971 and Punjab Finance Act I of 1972. This section 3-A has been reproduced in the later part of this judgment and to avoid duplication is not being reproduced here. According to this section no tax could be levied, charged, or collected by a local body (or a Municipal Committee) in an urban area in respect of which a notification has been issued under section 3(1) of the West Pakistan Urban Immovable Property Tax Act V of 1958.

17. History regarding Provincial Tax (i.e. Property Tax) as distinct from

18. Corporation Tax-(i. e. House Tax)

3. From what has been written above it will be apparent that whereas under the Punjab Municipal Act all properties situated within the Municipality of Lahore were liable to-(what may be briefly called)-a Corporation Tax/ or House Tax however, the said tax was withdrawn so far as the properties situated within the local area of the Model Town Co-operative Society are concerned by means of the Notification reproduced above with effect from 9/17th of September 1943. At this place it is significant to mention that even though the aforesaid Notification exempted the properties situated within the local limits of the Model Town Co-operative Society from Corporation/House Tax but virtually it gave no relief to the owners inasmuch as in the meantime there had come into force with effect from 1-4-1941 the Punjab Urban Immovable Property Tax Act XVII of 1940 which had independently created a separate liability for taxation-(termed by me as Provincial tax/Property Tax). See section 3 (1) of the Act which stated that there shall be charged, levied and paid an annual tax on buildings and lands situated in the rating area shows in the Schedule to this Act at such rate, not exceeding twenty per centum of the annual value of such buildings and lands, as the Provincial Government may by Notification in the official Gazette, direct in respect of each such rating area. Section 2(e) (as amended later on) defined rating area as "any area administered for the time being by a local authority which is included or which may hereinafter be included in the Schedule to this Act". Section 2(b) stated that "local authority means a Municipal Corporation, a Municipal Committee, a cantonment board, a small town committee; a notified area committee or other authority (not being a district board) legally entitled to, or entrusted by the Provincial Government with the control or management of a municipal or local fund". Lahore duly figured in the list of the "rating areas" contained in the Schedule.

4. On 18th of March 1941 there was issued a Notification under sub section (2) of section 1 of Punjab Act XVII of 1940 which also shows that Lahore was included in the rating area. This Notification can be seen at page 37 of the Punjab Tax Manual, Vol. II, Part I printed by the Superinten dent, Government Printing Press, West Pakistan in (sic). Various Notifica tions were issued from time to time fixing the rate on which the tax was to be charged. It is borne out from taxation record with the Excise and Taxation Department that properties in Model Town were being taxed under the aforementioned Notifications.

5. This state of affairs continued till 10th of April 1958 when the West Pakistan Urban Immovable Property Tax Act V of 1958 was promulgated. Section 3(1) of the Act stated that the Government may by Notification specify urban areas where tax shall be levied under this Act. Urban area was defined under section 2(i) as an area within the boundaries of Municipal Corporation, Municipal Committee, Cantonment Board, Small Town Com mittee, 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. Rating area was defined by section 2(g) so as to mean urban area where tax is levied under the provisions of this Act. Section 24 inter alia repealed Punjab Urban Immovable Property Tax Act, 1940 and stated that notwithstanding the repeal of the acts mentioned in sub section (1), everything done, action taken, obligation, liability, penalty or punishment incurred, inquiry or proceeding commenced, officer appointed or person authorised, jurisdiction or power conferred, rule made and order or notification issued under any of the provisions of the said Act, shall, if not inconsistent with the provisions of this Act, be continued, and so far as may be, be deemed to have been respectively done, taken, incurred, commenced, appointed, authorised, conferred, made or issued under this Act. This will show that the old Notifications specifying the scales of Provincial Tax on the properties situated within the Municipal Area of Lahore were continued.

6. Another development which at this stage deserves notice is that on 30th of June 1971 was promulgated the Punjab Finance Ordinance XI of 1971 which was to come into force with effect from 1-7-1971. Section 11 of this Ordinance is relevant which reads as follows:-

19. Section 11. No levying of tax on buildings and lands by Municipal Com mittees and Town Committees.-Notwithstanding anything to the contrary contained in the Municipal Administration Ordinance, 1960, or the Basic Democracies Order, 1959, or the rules made thereunder, no tax on any building or land situated within the limits of a Municipal Committee .or a Town Committee shall be charged, levied or collected by such Municipal Committee or Town Committee, as the case may be with effect from 1st of July 1971:

20. Provided that the tax assessed by a Municipal Committee or a Town Committee before the 1st of July 1971, shall be paid to, received or recovered by such Municipal Committee or Town Committee in accordance with the provisions of the said Ordinance, Order or the rules, as the case may be.

21. Section 12 of the Ordinance is also relevant which reads as follows:-

22. "Amendment of West Pakistan Act V of 1958.-In the West Pakistan Urban Immovable Property Tax Act, 1958, in its application to the Province of the Punjab-

(a) in section 3, for subsections (2) and (3), the following subsections shall be substituted:-

(2) Subject to the provisions of subsections (3) and (4) there shall be charged, levied and paid a tax on annual value of buildings and lands in a rating area at the following scales:-

(i) In case the annual value exceeds two hundred Fifteen per cent. and sixteen rupees but does not exceed six thousand of the annual rupees. value.

(ii) In case the annual value exceeds six thousand Seventeen and rupees but does not exceed twelve thousand rupees. a half per cent. of the annual value.

(iii) In case the annual value exceeds twelve thousand Twenty per cent. rupees but does not exceed twenty thousand of the annual rupees. value.

(iv) In case the annual value exceeds twenty thousand Twenty-five per rupees. cent. of the annual value.

(3) Where a building is occupied for residential purposes by the owner himself and if such owner or any member of his family does not own any other building in that rating area, he shall be allowed a deduction from the annual value at the following rates:-

(i) In case the building is situated in a first class Four hundred

23. Municipal Committee. and eighty-six rupees.

(ii) In case the building is situated in any other Three hundred urban area. and seventy eight rupees.

(4) 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.

24. 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 a rating area.

(5) The tax shall be due from the owner of buildings and lands."; and

(b) after section 3, the following new section shall be added:-

25. "3-A. Shares of Municipal Committee and Town Committee in the tax. Out of the tax collected under the Act from within the limits of a Municipal Committee or a Town Committee the Government shall, after retaining five per cent. thereof as collection charges, pay forty per, cent. of the balance to such Municipal Committee or Town Committee, as the case may be."

26. 6..A. This was followed by Punjab Finance Act I of 1972. Sections 7 and 8 of that Act are relevant which read as follows:-

27. "Section 7. Amendment of Punjab Ordinance Xl of 1971.-In the Punjab Finance Ordinance, 1971, for section 11, the following section shall be substituted :-

28. `11. No levying of tax on buildings and lands by local bodies.-Notwithstanding anything to the contrary contained in the Municipal Administration Ordinance, 1960, the Basic Democracies Order, 1959, or the Punjab People's Local Government Ordinance, 1972 or any rule made thereunder as from 1st of July 1971, no local body shall levy, charge or collect tax on any building or land situated in any urban area in respect of which a notification has been made under subsection (1) of section 3 of the West Pakistan Urban Immovable Property Tax Act, 1958

29. Provided that the tax assessed by a local body before the Ist of July 1971, shall be paid to, received or recovered by such local body in accordance with the provisions of the said Ordinances, Orders or rules, as the case may be.

30. Explanation.-In this section, "Local Body" means a Municipal Com mittee constituted under the Municipal Administration Ordinance, 1960, a Town Committee constituted under the Basic Democracies Order, 1959, and a People's Municipal Corporation, a People's Municipal Committee and a People's Town committee constituted under the Punjab People's Local Committee Ordinance, 1972.'

31. Section 8.-In the West Pakistan Urban Immovable Property tax Act, 1958 in its appl'ica'tion to the Province of the Punjab-

(a) for section 3, the following section shall be substituted:-

3. Levy of tax.-(() Government may by notification specify urban areas where tax shall be levied under this Act

32. Provided that one urban area may be divided into two or more rating areas or several urban areas may be grouped as one rating area.

(2) Subject to the provisions of subsections (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.

(3) In case of property of the annual value not exceeding three thousand rupees, owned by a widow or by a minor whose father is dead, a deduction of five hundred rupees from the annual value shall be allowed.

(4) In case of property of the annual value not exceeding twelve thousand rupees, other than the property referred to in subsection (3), a deduction of two hundred and seventy rupees from the annual value shall be allowed.

(5) 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.

33. 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.

(6) The tax shall be due from the owner of buildings and lands."

(b) for section 3-A, the following section shall be substituted:-

34. "3-A. Share of local bodies in the tax.-Out of the tax collected under this Act from within the limits of a local body, the Government shall, after retaining five per cent. thereof as collection charges, pay forty per cent. of the balance to such local body.

35. Explanation.-In this section, "local body" means a Municipal Committee constituted under the Municipal Administration Ordinance, 1960, a Town Committee constituted under the Basic Democracies Order, 1959, and a People's Municipal Corporation, a People's Municipal Committee and a People's Town Committee constituted under the Punjab People's Local Government Ordinance, 1972 and

(c) in section 4, for clause (c), the following clause shall be substituted:

36. "(c) Buildings and lands, the annual value of which does not exceed four hundred and thirty-two rupees:

37. Provided that if such building or land is in the ownership of a person who owns any other building or land in the same rating area, the annual value of such building or land, shall, for the purposes of this clause, be deemed to be the aggregate annual value of all buildings and lands owned by him in that area."

38. Section 10 has also relevancy which reads as follows:-

39. "Section 10. Application of existing laws.-Where any tax, duty or surcharge imposed or any fee levied by this Act is by way of an addition to, or a surcharge on any existing tax or duty imposed or fee levied by or under any enactment and rules in force in the Punjab, the procedure provided in such enactment and rules framed thereunder for the assessment, collection and recovery of such tax, duty or fee shall, so far as applicable, apply to the assessment, collection and recovery of the additional tax, duty surcharge or fee, as the case may be."

7. Arguments of the counsel for the petitioner.-In the face of the aforesaid history of the legislation on the subject, the first point argued by the learned counsel for the petitioner was that if once the area administered by the Model Town Co-operative Society has been exempted from the Corporation Tax/House Tax (which was being charged under the Punjab Municipal Act of 1911-(or its successor Municipal Laws)-the exemption was to enure for ever and thereafter no further tax could be imposed in that area. This point was raised with reference to the exemption Notification dated the 9th of September 1943 which stated that with effect from the 1st of January 1940, all lands and buildings situated within the area administered by the Model Town Co-operative Society were exempted from the payment of tax, imposition of which was notified in the Punjab Govern ment Notification Nos. 635-L. G.-Bds -39/5065 dated the 8th February 1939. The contention has no merit. What was exempted under the aforesaid notification of -1943 was the liability to be taxed under the Notification dated 8th of February 1939, and had no reference to any further liability which might be created-by any subsequent legislation on the subject. In other words earlier exemption was confined to Corporation Tax/ House Tax as this term has been explained earlier. As hereinbefore mentioned even though the liability to pay the Corporation Tax/House Tax under the Punjab Municipal Act, 1911 was exempted vis-a-vis the lands ands buildings situated to be more precise within Model Town Society area but after this exemption there was promulgated the Punjab Act XVII of 1940, the West Pakistan Urban Immovable Property Tax Act V of 1958, the Punjab Finance Ordinance XI of 1971 and Punjab Finance Act I of 1972 under which an altogether different liability to pay the tax was created. This liability was fixed with reference to all buildings and lands situated within the area administered by the Municipal Committee of Lahore. The exemption given in 1943 with regard to Corporation Tax obviously cannot be considered as an exemption under the aforesaid subsequent laws and the authorities concerned were well within their right to demand the same from the owners of the buildings and lands within the Municipal area notwithstanding the fact that earlier a part of such area-(which was included in the Model 'town Society area)-had been exempted to pay the tax under the Punjab Municipal Act III of 1911 and its successor Municipal Laws.

8. The next point argued by the learned counsel for the petitioner was that Model Town area was not within the rating area i.e., Municipal Area of Lahore Municipality and as such West Pakistan Immovable Property Tax Act, 1958 was not applicable to the buildings and lands situated therein. The contention has no force. The very Notification dated the 9th September 1943 whereunder Model Town was exempted from Corpora tion Tax/House Tax itself indicates that it was within the Municipal area and it was-on that basis that properties situated therein were exempted. I need not enter further into the details of this point inasmuch as it is already covered by the case-law on the subject. See M. Y. Siddiqi v. Muhammad Abdul Majeed 1970 Law Notes 720 and Sardarilal and others v. Smt. Shakuntla Devi A I R 1961 Pb. 378, wherein it was held that Model Town area was within the Municipal area: of Lahore.

9. It was then argued that even though the Model Town area may bed within the Municipal Limits of the Lahore Municipal Committee but as it was not being administered by that Committee, therefore, it was not a rating area wherein Provincial Tax/i.e. Properly Tax could be imposed under the, West Pakistan Urban Immovable Property Tax Act, 1958. This contention also has no substance, because, requirement that it should be actually administered by a Municipal Committee is not necessary for an area being a rating area-cum-Urban area under the aforesaid Act. This is clear from the definition of the words "rating area" "urban area" as given in the said statute, where all that is prescribed is that the area should be within they municipal area. Even otherwise the point is also covered by M. Y. Siddiqi v. Muhammad Abdul Majeed, and need not be probed further.

10. The further point argued by the learned counsel for the petitioner was that there was an apparent conflict between section 11 of the Punjab Finance Ordinance, 1971-(which corresponds to section 11 of the Punjab Finance Act I of 1972)-(both reproduced above)-on the one hand and section 3-A of the West Pakistan Urban Immovable Property to the Act V of 1958 which has been inserted by the aforesaid two enactments of 1971 and 1972 on the other hand. According to section 11 ibid notwithstanding anything to the contrary contained in the Municipal Administration Ordinance, 1960, or the Basic Democracies Order, 1959, or the Punjab People's Local Government Ordinance, 1972 or any rule made thereunder as from 1st of July 1971, no local body shall levy charge or collect tax on any building or land situated in any urban area in respect of which a Notification has been made under subsection (1) of section 3 of the West Pakistan Urban Immovable Property Tax Act, 1958. Learned counsel submitted that what had been prohibited by the aforesaid provision of law has been allowed by section 3-A wherein it is provided that out of the tax collected under the Act within the limits of a Municipal Committee or a Town Committee, the Government shall, after retaining 5 per cent. thereof as collection charges, pay 40 per cent. of the balance to such Municipal Committee or Town Committee as the case may be. Learned counsel argued that there is an apparent inconsistency between the aforesaid two provisions which come into being by one and the same law, namely, Punjab Finance Ordinance and Act and as such were void for unworkability. The plea raised has no substance. What has been prohibited by section 11 of the Punjab Finance Ordinance or Act is that no local body-(i.e. a Municipal Committee) shall itself levy charge or collect any Corporation Tax/i e. House Tax. This is an exemption of the same kind which for example was contained vis-a-vis Model Town area in Notification of 1943. Formerly it was only an exemption by Notification within the jurisdiction of an executive fiat but now it was an exemption given by the Legislature itself. Be that as it may, the broad fact in any case remains that it is an exemption from Corporation Tax/i,e., House Tax which a Municipal Committee could have otherwise itself levied, charged or collected under the Municipal Administration Ordinance etc. The tax under the West Pakistan Urban Immovable Property Tax Act is, however, a Provincial Tax. If out of the proceeds of any Provincial Tax, any fraction is paid to any local authority that does not mean that the imposition or realisation of any such tax becomes illegal especially when both i.e. local bodies as well as lands and buildings in a Province are such items on which Provincial Legislature could legislate under the relevant Constitution. The charging section in West Pakistan Urban Immovably Property Tax Act, 1958 is section 12(3) whereas section 3-A is only a machinery section as per principles laid down in Commissioner of Income-tax, Bengal v. Messrs Mahaliram Ramjidas AIR 1940 P C 124. So long as the charging section is quite in order, the Provisions in the machinery section cannot detract anything from the validity of the charging section. Learned counsel for the petitioner referred to Articles 118, 119, 120 and 121 of 1973 Constitution which reads as follows :-

40. "Article 118. Provincial Consolidated Fund and Public Account.-(1) All revenues received by the Provincial Government, all loans raised by that Government, and all moneys received by it in repayment of any loan, shall form part of a consolidated fund, to be known as the Provincial Consolidated Fund.

(2) All other moneys

(3) received by or on behalf of the Provincial Government; or

(b) received by or deposited with the High Court or any other Court established under the authority of the Province; shall be credited to the Public Account of the Province.

41. Article 119. Custody, etc. of Provincial Consolidated Fund and Public Account.-The custody of the Provincial Consolidated Fund, the payment of moneys into that Fund, the withdrawal of moneys therefrom, the custody of other moneys received by or on behalf of the Provincial Government, their payment into, and withdrawal from, the Public Account of the Province and all matters connected with or ancillary to the matters aforesaid, shall be regulated by Act of the Provincial Assembly or, until provision in that behalf is so made, by rules made by the Governor.

42. Article 120. Annual Budget Statement.-(1) The Provincial Government shall, in respect of every financial year, cause to be laid before the Provincial Assembly a statement of the estimated receipts and expenditure of the Provincial Government for that year, in this Chapter referred to as the Annual Budget Statement.

(2) The Annual Budget Statement shall show separately-

(a) the sums required to meet expenditure described by the Constitution as expenditure charged upon the Provincial Government Fund; and

(b) the sums required to meet other expenditure proposed to be made from the Provincial Consolidated Fund; and shall distinguish expenditure on revenue account from other expenditure.

43. Article 121. Expenditure charged upon Provincial Consolidated Fund. The following expenditure shall be expenditure charged upon the Provincial Consolidated Fund:-

(a) the remuneration payable to the Governor and other expenditure relating to his office, and the remuneration payable to-

(i) the Judges of the High Court; and

(ii) the Speaker and the Deputy Speaker of the Provincial Assembly ;

(b) the administrative expenses, including the remuneration payable to officers and servants, of the High Court and the Secretariat of the Provincial Assembly;

(c) all debt charges for which the Provincial Government is liable, including interest, sinking fund charges, the repayment or amortisation of capital, and other expenditure in connection with the raising of loans, and the service and redemption of debt on the security of the Provincial Consolidated Fund;

(d) any sums required to satisfy any judgment, decree or award against the Province by any Court or tribunal; and

(e) any other sums declared by the Constitution or by Act of the Provincial Assembly to be so charged."

44. Learned counsel then referred to similar corresponding provisions, namely, Articles 123 to 130 of the Interim Constitution. which was in force at the time the Punjab Finance Act I of 1972 was promulgated. He submitted that the tax realised under the West Pakistan Immovable Property Tax Act went into what is known as "the Provincial Consolidated Fund or Account" and no withdrawal therefrom could be made for a Municipal Com mittee. if such withdrawals are, however, all,)wed for a Municipal Committee which is thus made to share any fraction thereof the same is an unauthorised withdrawal and would in reality show that the tax realised to the extent any share from it is to be paid to a Municipal Committee is in reality a Municipal or Corporation Tax/i.e. House Tax which was in violation of section 11 of the Punjab Finance Act I of 1972. The plea cannot be accepted. Even the constitutional provisions regarding consolidated fund or account to which reference is being made show that the withdrawals of such money from such fund or account and all matters connected with or F ancillary to the aforesaid matters shall be regulated by or under an Act of the Provincial Legislature. This will show that if a Provincial Act authorised that certain amount from the aforesaid fund or account be given to a Municipal Committee the same cannot be termed as illegal. According to Item No. 12 of the Provincial List-(i.e. List II) of the Fourth Schedule to the Interim Constitution, Provincial Legislature could make jaws regarding "Local Government that is to say, the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self-govern ment or village administration". The particular sections i.e. section 11 and section 3-A hereinbefore mentioned can well be covered by the aforesaid item. At this stage it may be mentioned that Municipal Committees or Corporations are nothing but a charter to a corporate body for local self- Government in a local area; on the pattern and design mentioned in the relevant Act. Halsbury in his "Laws of England", Third Edition, Volume 9 at pages 4 to 7 in Paragraphs 3, 5, 6 and 7 writes as follows:-

45. "Para. 3. Definition of Corporation aggregate.-A corporation aggregate has been defined as a collection of individuals united into one body under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law with the capacity of acting in several respects as an individual, particularly of taking and granting property, of contracting obligations and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation or at any subsequent period of its existence.

46. Para. 5. Trading and non-trading corporations.-The following may be trading corporations ; (1) chartered companies; (2) companies incorporated by special Acts of Parliament, such as water companies, cemetery companies and the like including joint stock companies incorporated under special Acts, to which the Companies Clauses Consolidation Act, 1845 applies; (3) companies registered under the Companies, Act, 1948, or an earlier Companies Act; and (4) societies registered under the Industrial and Provident Societies Acts, 1893 to 1952; (5) national corporations, such as the British Transport Com mission:.

47. Non-trading corporations include : (1) Corporations having statutory powers of local Government, such as county councils, municipal corporations, urban district councils, rural district councils and parish councils, or joint boards of local authorities; improvement commissioners or trustees or similar bodies; river conservancy commissioners and dock and harbour commissioners or trustees; (2) eleemosynary corporations (comprising charitable institutions benevolent institutions, university, colleges, and some schools) and also civil corporations, such as the universities, institutions for the advancement of the arts and sciences (as, for instance, the Royal Society), and incorporated members' clubs ; (3) national corporations, such as the British Broadcasting Corporation (which is incorporated by charter) or the Agricultural Land Commission.

48. Para. 6. National Corporations.-In recent years a new class of cor porations, in this title called national corporations, has come into prominence. Corporations of this class are corporations aggregate, are created by Act of Parliament or by charter for the benefit or service of the community and are not, or are not now owned by private individuals. These corporations are here described as national corporations so as to limit the class to those corporations whose activities are not less than nation-wide, but so as to include corporations which are part of a group having such activities, and so as to exclude, for example, development corporations for new towns whose purposes are local but which in many respects are similar corporations.

49. National corporations are public service corporations and carry on their undertaking as responsible independent organisations, not as part of any department of State. They may, however, be concerned with the execution of policy of the Government within the field of their activities, as for example, in the case of monetary policy, is the Bank of England; but in matters of routine, in the ordinary running of their undertakings and in the decisions necessary for that purpose, they act independently of the Government. They are usually subject, nevertheless, in some measure to the control of a department of State for which a Minister or other member of the Cabinet is responsible to Parliament who commonly appoints the members of the national corporation and has the power to give it directions.

50. Para. 7. Examples of National Corporations.-Examples of National Corporations are the Bank of England, the British Broadcasting Corporation, the Agricultural Land Commission, the Colonial Develop ment Corporation, and the Commonwealth Telecommunications Board. The position of regional hospital boards, which are bodies corporate by state is usual in that they exercise their functions on behalf of the Minister of Health and, though their activities are limited to a region of the country, they are not linked to a central corporation aggregate. In addition there are national corporations which have industrial or transport or trading undertakings, although the object of the corporation itself may be to provide a service rather than to make a profit. Examples of these are the British Overseas Airways Corporation and British European Airways Corporation, the British Transport Commission, the British Electricity Authority and the Electricity Area Boards, the Gas Council and the Gas Area Boards and the National Coal Board. Cables and wireless, limited, whose shares were acquired by the Treasury, affords a further example of an operating company owned for the nation. Allied with this category, but different in that its activities are supervisory and it has no undertaking, is the Iron and Steel Board."

51. This will show that Municipal Committees are included in the affairs of a Province. To give money from a Provincial Consolidated Fund or Public Account to a Municipal Committee is, therefore, quite in consonance with those affairs. We should not as such unnecessarily deter if the Provincial Government from the aforesaid fund or account gives a fraction to a Municipal Committee or Municipal Committees under the provisions of an express provision of law. Such a grant does not reflect on the nature of the source from which that fund or account is constituted.

11. In the instant case, Model Town Co-operative Society had not been impleaded as a party, but considering that it was fair and just that it should be present in Court I, by means of my order dated 3-4-1974 impleaded it as a party. Later on the said Society itself filed an independent writ petition being Writ Petition No. 720 of 1974 which was admitted to a regular hearing. Ch. Khalil-ur-Rehman learned Advocate for the Society appeared and raised the same pleas and points which have already been attended to earlier. This judgment will cover the aforesaid writ petition as well.

12. The result is that seeing no force in these writ petitions i.e. W. P. No. 1206/1973 and W. P. No. 720/1974 I hereby dismiss the same with no order as to costs.

52. S. A. H. Petition dismissed.