M/s. CHAPAL BUILDERS, KHAYABAN-E-JAMI, KAHKASHAN, CLIFTON, KARACHI vs
This matter arose from a constitutional petition challenging the imposition and realization of octroi tax by the Union Council Gujro and its successor, Town Committee Gujro. The petitioner contended that the levy was unlawful and mala fide, arguing that the upgradation of the Union Council to a Town Committee was intended to circumvent established precedent holding that schemes under the Karachi Development Authority (KDA) are urban areas where a Union Council cannot levy octroi. It was further asserted that the upgraded entity failed to comply with statutory requirements under Section 7 of the Sindh Local Government Ordinance 1979 regarding territorial compactness, contiguity, and population limits, without any waiver or recorded reasons by the Government. The Supreme Court considered whether an area already constituting part of an urban KDA area and the city of Karachi could be relegated to town status in violation of the statutory criteria. Finding that these substantive legal questions required detailed examination, the Supreme Court granted leave to appeal.
- Whether an urban area within the Karachi Development Authority scheme can be lawfully relegated to the status of a town under the Sindh Local Government Ordinance 1979?
- Whether a local authority can levy octroi in respect of lands comprised in housing societies deemed to be urban areas?
- Whether the failure to comply with population, compactness, and contiguity requirements under Section 7 of the Sindh Local Government Ordinance 1979 invalidates the declaration of a town in the absence of recorded reasons for waiver?
- Section 7, Sindh Local Government Ordinance 1979
- Section 7(1), Sindh Local Government Ordinance 1979
- Section 7(1)(b), Sindh Local Government Ordinance 1979
- Section 7(1)(d), Sindh Local Government Ordinance 1979
- Section 7(2), Sindh Local Government Ordinance 1979
- Section 7(3), Sindh Local Government Ordinance 1979
ORDER
WAJIDHUDDIN AHMED, J.-- The High Court, through the impugned order, has dismissed a number of Const, petitions where, inter a/ia, the imposition and realization of octroi firstly, by the Union Council Gujro in District Karachi East and subsequently by its successor viz. Town Committee Gujro was questioned. One such petition, C.P. No. D-2722 of 1993, was filed by the present petitioner. It is contended before us that the levy of octroi in the disputed area is unlawful and even mala fide as the upgradation of the Union Council Gujro to Town Committee Gujro has been designed to circumvent the effect of Baba Corporation (Pvt.) Ltd. Vs. Province of Sindh Karachi (PLD 1989 Karachi 136) as up-held in Union Council Vs. Baba Corporation (Pvt.) Ltd. (1993 SCM R 1996). These precedents opined that the relevant schemes of the Karachi Development Authority (KDA) were deemed to be Urban areas and because the Union Council Gujro could only be constituted in respect of a Rural area such was not competent to levy octroi in respect of the lands comprised in the housing societies and schemes of the KDA.
2. Our attention has also been drawn to section 7 of the Sindh Local Government Ordinance, 1279, which is relevant to declaration of a town as seems to have been occasioned in the instant case. Such section is as below:-- "7. (1) any area declared as union, town, municipality or city shall, as far as possible be cornpacl, and contiguous with territorial unity.
(2) the-pOpulation of a local area shall in the case of
(a) a union be such as may be specified by Government;
(b) a town be between five thousand to twenty five thousand;
(c) a municipality be between twenty five thousand to five Lacs;
(d) a city be above five lacs.
(3) Government may, for reasons to be recorded, waive any of the aforesaid characteristics while delimiting a local area."
3. A perusal of the reproduced section would show that as far as possible a town shall be compact and contiguous with territorial unity. Besides, population thereof would be between five thousand to twenty five thousand. It is urged that the areas of the up graded entity are neither compact nor contiguous and even the quantum of the population exceeds twenty five thousand. The Government also has not been shown either to have waived any of such characteristics or recorded reasons therefore.
4. Significantly, the disputed area, we note, was already a part of the Urban area of KDA and, therefore, of the city of Karachi and such perhaps could not be relegated to the status of a town in contravention of section 7(1)(b) and (d) of the 1979 statute.
5. The questions, raised as above, require examination. The. Petition, accordingly, is allowed and leave to appeal is granted.