NASEER AHMAD AWAN VS SUB-REGISTRAR, NISHTER TOWN, LAHORE and another, 2007 PTD-LAHORE-HIGH-COURT-LAHORE 1922 (2020)

(a) Finance Act (V of 1989)---

----S.7 [as amended by S.15 of Punjab Finance Act (III of 2006)]---Capital Value Tax---Levy---Date and time of purchase or acquisition of right from seller by purchaser provides for levy of Capital Value Tax and not the day or date of its registration under Registration Act, 1908.

(b) Transfer of Property Act (IV of l 882)---

----S.54---Sale---Scope---Sale transaction, in case it is brought in black and white, is complete when it is confirmed by parties.

(c) Registration Act (XVI of 1908)---

----Ss.71, 72, 73 & 77---Finance Act (V of 1989), S.7 [as amended by S.15 of Punjab Finance Act (III of 2006)]---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Capital Value Tax, levy of---Past and closed transaction---Deposit of sale deed for registration prior to the cut-off date---Petitioner sold his land vide sale-deed which was completed in presence of Local Commissioner and petitioner had received consideration amount---Sale-deed was presented for registration before 1-7-2006 but it was not registered on certain objections---Later on the Registration authorities asked the petitioner to pay Capital Value Tax as registration was not completed before cut-of date--Validity---Transaction was. completed when petitioner as seller put his signatures and thumb-impressions on the document in presence of witnesses as also the Local Commissioner appointed by the authorities---Seller having accepted the consideration, the purchase or acquisition of title by purchaser was complete---Since the amendment in S.7 of Finance Act, 1989, by way of S.15 of Finance Act, 2006, providing for levy on such like transactions came into effect on 1-7-2006, the transaction of sale in question was a past and closed transaction as far the levy was concerned---Transaction could not be brought to the levy, merely for the reason that the document number, book number, volume number or date of registration could not be filled in though the stamped recitals had been signed by Registrar for whatever reason---Refusal on the part of Registrar to fill in blanks or to give document number; book number, volume number or date of registration data was nothing but crude and unacceptable attempt to avoid the charge of inefficiency on his part---Petitioner having presented the document well before the enforcement of levy viz. 1-7-2006, which was signed by both the parties and it was so admitted by Registrar in the stamped recitals signed by him---Petitioner could not be held responsible for non-filling of the blanks or assignment of document number, book number, volume number and date of registration---Refusal on the part of Registrar to award such details to complete sale-deed was declared to be illegal and without lawful authority---High Court directed the authorities to award document number, book number, volume number and date of registration to the document in question as having been presented on 23-6-2006 and registration/authentication having completed in law on or before 30-6-2006---Petition was allowed in circumstances.

Amir Wakeel Butt for Petitioner.

Rafey Ahmed Khan, A.A.G. for Respondent.

Date of hearing: 28th March, 2007.

JUDGMENT

NASTM SIKANDAR, J.---By way of section 7 (Levy of tax on Capital Value of certain assets) of the Finance Act, 1989, (V of 1989), a tax on the capital value of assets to be called the Capital Value Tax was levied. It was payable by every individual who acquired by purchase an asset or a right to use thereof for more than twenty years. Subsection (2) of section 7 detailed the assets referred to in subsection (1) thereof. Through section 15 of the Finance Act, 2006 (III of 2006) subsection (1) and subsection (2) of said section 7 of Finance Act, 1989 (V of 1989) were amended in the following manner:--

"15. Amendment of Act (V of 1989).---The following further amendments shall be made in Finance Act, 1989 (V of 1989), namely : ---

In section 7.----

(1) in subsection (1),---

(a) before the word "surrender" the words and comma "power-of -attorney" shall be inserted; and

(b) the words and comma "or purchase of air ticket" shall be omitted.

(c) in the Explanation to clause (i) after paragraph (d), the following shall be added, namely:--

"(e)" "urban area" means area falling within the limits of:--

(i) the Islamabad Capital Territory;

(ii) a cantonment board; or

(iii) a municipal body;

(iv) in case of Karachi upto 40 kilometers from the outer limit of municipal or cantonment limit;

(v) in case of Lahore and Faisalabad upto 30 kilometers from the outer limit of municipal or cantonment limits.

(vi) in other cases, upto to 10 kilometers from the outer limits' of municipal bodies or cantonment boards; and

(vii) includes area defined as such in the Urban Immovable Property Tax Act, 1958 (W.P. Act V of 1958) and such areas as the Central Board of Revenue may, for time to time, by notification in the official Gazette, specify.

(2) in subsection (2),--

(a) after paragraph (c) the following new paragraph shall be inserted, namely:--

"(CA)

(a) Immovable property (other than commercial property and residential flats), situated in urban area, measuring at least one kanal or 500 square yards whichever is less.

(b) Commercial immovable property of any size situated in urban area.

(c) Residential flats with covered areas measuring 1500 sq. feet and above.

(3) paragraph (D) shall be omitted; and

(4) in paragraph (E), for the figure "0.01", the figure "0.02" shall be substituted. "

The Finance Act, 2006 and all amendments made through it were, unless otherwise provided, to come into force on 1st day of July, 2006.

2. The petitioner being an owner in possession of land measuring 18 Kanals 12 Marlas entered into a sale agreement with Defence Housing Authority for a consideration of Rs.1,86,00,000 (Rupees (one Crore Eighty Six Lac Only). The stamp paper was purchased on 8-6-2006 and the recitals were written on 9-6-2006. It was executed before the Local Commissioner, an Advocate on 13-6-2006. The town fee at the prescribed rate of Rs.1,86,000 was paid on 22-6-2006 through the Bank of Punjab, Link Model Town Branch, Lahore. The registration fee of the sale-deed at Rs.1,86,460 was also paid on 23-6-2006 and the document was presented for registration before respondent No.1/Sub-Registrar, Nishter Town Lahore on the same day viz. 23-6-2006. Allegedly the respondent No.1 sought verification of Fard of the petitioner from the concerned Patwari who made his report on 26-6-2006. It is alleged. that respondent No. 1 instead of complying with the provisions of sections 59, 60 and 61 of the Registration Act, 1908 returned the document to the petitioner on 4-7-2006 with the objection that Capital Value Tax (CVT) having not been paid which in the meanwhile having become liable since 1-7-2006 the document/sale-deed could not be registered.

3. The respondents in their reply have admitted that the Local Commissioner re-submitted the sale-deed on 23-6-2006. However, according to them the "document number was not awarded because verification of ownership etc. of the plaintiff was not made". Further that since "the document number was not awarded to the document till 30th of June, therefore, the petitioner was asked to pay the C.V.T, as verification of stamp papers/Fard/NIC's etc. and the Registration Moharrir also signed it after 30-6-2006 on the final endorsement". Also state that since "the document was signed after 30th of June, therefore, party took the document back for payment of Capital Value Tax". In the reply it is further claimed "mere signing on one page does not guarantee registration number because in many cases before awarding registration number, same sort of legal t7aw props of like stay order from civil Court, fake Fard and stamp papers of identity cards. All these formalities are checked once again thoroughly before awarding the registration number because once registration number has been awarded then only civil Court can cancel a registered deed, but when registration number has not been awarded then due to above mentioned facts, even ~Sub-Registrar can defer or delay registration of any document". In reply to the claim of the petitioner that after re-submission of the sale-deed by the Local Commissioner the Registration Moharrir-I put his stamp on the reverse of the document giving blanks with regard to document number, book number, volume number and registration member to be filled in by the Registrar at the time of verifying the registration it is stated that "it is an irregularity of procedure and the stamp (certificate) was signed by the R.M.-1 adhering the directions of worthy Collector issued time to time to ensure the payment of proper taxes/fees paid in this behalf". It is further stated that "although the Patwari has reported on 26-6-2006 yet it was received in the office at the closing hours on 30-6-2006". In para. 10 of the reply it is also stated that "the matter of levying C.V.T, on those documents of which permission was granted or execution was made before 30th of June, 2006 had been discussed at .length with District Registrar who in consultation with Board of Revenue has decided that C.V.T. would be applicable on all those documents which would be registered after 30th of June, irrespective of the fact whether they were presented before 30th of June or not Annexure A.1. No.HRC/3361, dated 31-8-2006. Because there were same nature documents pending in big quantum with the office of Sub-Registrar Ravi Town, and the matter was discussed with the high-ups that's why the worthy Collector issued the instructions of levy of C. V. T. "

4. After hearing the learned counsel for the petitioner, learned A.A.-G. and on going through the copies of the sale-deed and other documents relied upon by the petitioner am inclined to allow the prayer made in this petition which in extenso reads as under:--

"In view of the above, it is most respectfully prayed that an appropriate writ may very graciously be issued and respondent No. 1 be directed to cure the irregularity of procedure committed by him while registering the document.

It is further prayed that both the respondents be restrained from illegally demanding the C.V.T. as it is not applicable in the case of the petitioner".

5. Following are my reasons:

First; the document admittedly having been re-submitted on 23-6-2006 the transaction was complete both in fact as well as in law. The alleged deferring of registration of document under rule 137 of the Registration Rules, 1929 was both factually as well as legally unjustified. In the first place the Registration Act does not empower the respondent No.1 to probe into the ownership of the property which is subject-matter of a sale transaction. Even if for arguments sake it was so, the alleged probing or verification of ownership was to be made before asking the seller to put his signatures to authenticate the transaction both directly or through a Local Commissioner.

Second; the sale-deed in this case already stands registered. It needs to be noted that on the reverse of the last page of the sale-deed the respondent No.1 has signed the stamped recitals which read as under:

"Local Commission, Mr. Mian Safdar Ali, Advocate has got this document executed iii his presence. Both the parties have signed and put their thumb-impression in his presence as per instructions. As the Local Commission has returned the document after his satisfaction therefore it is registered."

Having signed and registered the document the respondent No.1 was not left with any choice to withhold the registration/ document number. The novel argument that mere signature of the respondent/Sub-Registrar did not amount to registration of document appears all greek to me. The Registration Act contemplates registration of the document on the signing of the certificate of registration by the concerned authority and there is no legal requirement that such kind of certificate should be made in respect of every page of the deed/document with as many signatures of the Sub-Registrar. The registration in this case was completed when the respondent/Sub-Registrar put his signatures to the above stamped recitals. The issuance or assigning of document number, volume number or book number thereafter was a mere ministerial act. The petitioner could not be held responsible if the office failed Co record such details in respect of the sale-deed, before the said cut-off date of 30th of June, 2006.

Third; the interpretation of the respondents as regards levy of C.V.T. even though alleged to have been made in consultation with Central Board of Revenue is too pedantic to be accepted. Their view that the C.V.T, was applicable on all documents endorsed/ registered on or after 1-7-2006 is only partly correct section 7 of the Finance Act, 1989 by which the levy was originally made expressly states that it shall be payable"....by every individual who acquires by purchase an asset or a right to the use thereof for more than twenty years...." This provision does not speak of the dale of registration but the acquisition of an asset by purchase or a right to use thereof for more than twenty years. In other words it is the date and time of purchase or acquisition of the said right from the seller by the purchaser which provides for the falling of levy and not the day or date of its registration under the Registration Act. A sale transaction in case it is brought into in black and white is complete when it is confirmed by the parties. In this case the transaction was completed when the petitioner as seller put his signatures and thump-impressions on the document in the presence of witnesses as also the Local Commissioner appointed by respondent No.1. The seller having accepted the receipt of consideration the purchase or acquisition of title by the purchaser was complete as rightly observed by the respondent No. 1 in the stamped recitals signed by him. Since the Amendment in section 7 of the Finance Act, 1989 by way of section 15 of the Finance Act, 2006 providing for levy on such-like transactions came into effect on 1-7-2006, the transaction of sale in the case in hand was a past and closed transaction as far the levy was concerned. It could not be brought to the levy merely for the reason that document number, book number, volume number or date of registration could not be filled in though the stamped recitals had been signed by the respondent No.1 for whatever reason. The refusal on the part of the respondent No.1 to fill in the blanks or to .give the document number, volume number, book number or dale of registration is .nothing but a crude and unacceptable attempt to avoid the charge of inefficiency on its part. And,

Lastly; All said and done, the petitioner. having presented the document well before the enforcement of levy viz., 1-7-2006 which was signed by both the parties and it was so admitted by respondent No. 1 in the stamped recitals signed by him the petitioner could not be held responsible for non-filling of the blanks or assignment of document number, book number, volume number and date of registration. The refusal on the part of the respondent No. 1 to award these details to the completed sale-deed is declared to be illegal and without lawful authority. The document in question shall be awarded number, book number, volume number and date of registration as having been presented on 23-6-2006 and .the registration/authentication having completed in law on or before 30th June, 2006.

6. Petition allowed.

M.H./N-50/LPetition allowed.