IMPERIAL BUILDERS through Manager VS PROVINCE OF PUNJAB through Secretary Legal Government, 2009 PTD-LAHORE-HIGH-COURT-LAHORE 744 (2008)

(a) Punjab Government (Tax on Transfer of Immovable Property) Rules, 2001---

----R.4(1)---Constitution of Pakistan (1973), Art.199---Constitutional petition---Transfer tax rate---Applicability---Dispute between parties was with regard to rate of transfer tax---Petitioner-company contended that rate on the date of registration of conveyance deed was applicable, while authorities demanded rate prevalent on the date of purchase of property--Validity---Transfer Tax had become due when sale-deed was registered within the contemplation of R.4(1) of Punjab Government (Tax on Transfer of Immovable Property) Rules, 2001---In case of transfer, it became due when mutation was sanctioned and in case transfer was not made either through registered deed or through oral transfer / mutation the same would become due when sale took place---As transfer in question took place through registered sale-deed, therefore, case of petitioner fell in first category, i.e. R.4 (1) of Punjab Government (Tax on Transfer of Immovable Property) Rules, 2001, and tax had become due on the date when sale deed was registered---Decision of authorities that transfer tax was payable at rate prevalent on date of auction and not on date when sale-deed was registered was without lawful authority having no legal effect---High Court, in exercise of Constitutional jurisdiction declared that transfer tax from petitioner was to be levied and collected under R.4 (1) of Punjab Government (Tax on Transfer of Immovable Property) Rules, 2001, at the rate which prevailed on the date on which sale deed was registered---Petition was allowed in circumstances.

Ghulam Shabbir v. Commissioner, Rawalpindi Division, Rawalpindi and 4 others 2003 YLR 2640 and Municipal Committee, Tehsil Talagang through Chairman v. Ghulam Shabbir PLD 2006 SC 302 ref.

(b) Interpretation of statutes---

----Meaning of any provision of law---Principles---Nothing can be imported to assign a different meaning to provision of law and it has to be applied and interpreted in the manner as is prescribed by law.

Muhammad Ilyas Sh. for Petitioner.

Hafiz S.A. Rehman for Respondent.

Syed Husnain Kazmi, A.A.-G.

Date of hearing: 15th October, 2008.

JUDGMENT

SYED HAMID ALI SHAH, J.---The petitioner being the highest bidder in open auction held on 5-3-1998, purchased the property (Cecil Hotel Murree) against the bid of Rs.20,10,00000. 5% rebate was allowed to the petitioner in case of payment of the bid amount in lumpsum. The petitioner availed the concession and paid total amount of Rs.19,0950,000 vide agreement to sell, dated 6-6-1998. The petitioner submitted the site-plan for sanction by Municipal Committee Murree on 10-7-1998. Respondent No.2, declined to sanction the site-plan on the plea that sale agreement has not been executed and as such the title has not been passed on to the auction-purchaser. The petitioner challenged the order through W.P.No.1041 of 1999 wherein the respondents, in their parawise comments, took the same plea. Learned Court directed that site-plan be finalized within 45 days and respondent No.2 was allowed to assess the tax and issue demand notice. The order passed in the writ petition was not complied with which gave cause to the petitioner to institute Criminal Original No.3-W/2001 and file Writ Petition No. 1514 of 2002. Respondent No.2 reiterated it's earlier stance that title has not yet been passed to the petitioner, therefore, the site-plan could not be sanctioned. Learned counsel disposed of both the petitions. Both the petitions were disposed of, resultantly, sale-deed was registered on 6-3-2002.

2. The Transfer Tax at the stage of registration of the sale-deed, was payable at the rate of 1% while at the date of auction and signing of agreement to sell, the prevailing rate of Transfer of Immovable Property Tax by the local Government, was 5% under the Punjab Local Government (Tax on Transfer of Immovable Property) Rules, 1981 framed under section 79 of the Ordinance, 1979. Thereafter Punjab Government (Tax on Transfer of Immovable Property) Rules, 2001 were enforced on 20-9-2001. The petitioner claims that the rate on which the Transfer Tax is payable, is the one which prevailed on the date when conveyance deed was registered, while respondent No.2 insists on the rate, which was prevalent at the time when the petitioner purchased the property in auction. This controversy has led to the instant proceedings.

3. Learned counsel for the petitioner has contended that site-plan was not sanctioned by respondent No.2, on the plea that the title has not passed on to the auction-purchaser. Respondent No.2 has constantly been pursuing and contesting the above mentioned cases, on the plea that building plan can be approved and sanctioned only when title passes on, to the petitioner and the same cannot be sanctioned on conclusion of the sale transaction. The Transfer Tax thus would be leviable to the transfer of the property in question, at the rate which prevails on the day when the title passed on to the petitioner. Learned counsel has further submitted that the property tax prevalent on 6-3-2002, the date on which the transfer deed was registered, will be levied according to Rule 4(1). It is contended that Rule 4 provides for three categories and the case of the petitioner falls under sub-Rule 1. The tax which is recoverable from the petitioner is under sub-Rule 1. Learned counsel in support of this contention has referred to the case of "Ghulam Shabbir v. Commissioner, Rawalpindi Division, Rawalpindi and 4 others" (2003 YLR 2640). It is further contended by learned counsel that Secretary, Government of Punjab has issued direction to respondent No.2 for collection of Transfer Tax under Rule 4(3) of Rules, 1981. The impugned levy is being collected on the direction of the Secretary, therefore, remedy of appeal is not available to the petitioner and the instant petition is the only remedy.

4. Learned counsel for the respondents, on the other hand, has submitted that at the time of auction, Rules of 1981 were applicable while at the time of registration of the sale-deed, Rules, 2001 were enforced. Learned counsel has further submitted that sanctioning of the plan has no nexus with the levy of the tax. The petitioner has paid full auction price in the year, 1998 and the possession of the property was delivered to him in the same year. Learned counsel has referred to clause (7) of the agreement to sell and submitted that vacant possession of the property, free and clear from all the sellers' rights, was transferred at the time of the execution of agreement to sell, dated 6-6-1998. Reference to the legal notice issued by the petitioner was made wherein the petitioner himself admitted that ownership has been transferred and non-registration of the conveyance deed is mere a formality. It is further submitted that the petitioner has signed and delivered an undertaking for payment of the tax at a rate of 5% if the authority decides so. Learned counsel has contended that the authority (Secretary to Government of Punjab) has decided the matter and the petitioner as per his undertaking is bound to make the payment. Learned counsel has then submitted that Rule 4(3) is applicable to the case of the petitioner and the tax from the petitioner is required under the law to be recovered on the date when the sale took place.

5. Learned Law Officer has raised serious objection as to the maintainability of this writ petition in view of Rule 8 of Rules, 2001. He, however, has submitted that identical question was raised and answered by the Courts in the cases of "Ghulam Shabbir v. Commissioner, Rawalpindi Division, Rawalpindi and 4 others" (2003 YLR 2640) and "Municipal Committee, Tehsil Talagang through Chairman v. Ghulam Shabbir" (PLD 2006 SC 302).

6. Heard learned counsel for the parties, learned Law Officer and record perused.

7. Rule 5 of the Punjab Local Government (Tax on Transfer of Immovable Property) Rules, 2001 is applicable to the case in hand which reads as under:--

"Assessment and Collection of tax.---(1) Where an immovable property is transferred through a registered deed, the tax shall become due as soon as the sale-deed is registered and may be assessed and collected by the Taxation Office either directly or through the Registrar or Sub-Registrar concerned, if so authorized the board of Revenue either by a general or special order.

(2) Where an immovable property is transferred orally and such transfer is followed by a mutation in the revenue office, the tax shall become due as soon as the mutation is sanctioned and may be assessed and collected by the Taxation Officer either directly or through the Revenue Officer concerned, if so authorized by the Board of Revenue either by a general or a special order.

(3) Where a transfer is not covered by sub-rule (1) or sub-rule (2), the tax shall become due as soon as the sale takes place and may be assessed and collected by the Taxation Officer at the office of Tehsil/Town Municipal Administration."

8. Rule 1 provides that tax shall become due as soon as sale-deed is registered. The respondents have been denying the claim of the petitioner that title of the property has not been passed on to him when he made the payment, got possession of the property and signed the agreement to sell. It was persistent stance of respondent No.2 that his building plan will be approved and sanctioned when the conveyance deed is signed and registered. Respondent No.2 cannot be permitted to change it's stance with the changing situation, as the principle of approbate and reprobate will apply with it's vigour.

9. Tax becomes due when the sale deed is registered within the contemplation of subsection (1). In case of oral transfer, it becomes due when mutation is sanctioned .and in case the transfer is not made either through registered deed or through oral transfer/mutation the same becomes due when sale takes place. Transfer, in the case in hand was through a registered sale-deed, therefore, the case of the petitioner falls in the first category, i.e. under Rule 4(1). Tax within the contemplation of Rule 4(1) became due on the date when the sale-deed is registered. The provision of law is to be interpreted in its plain meanings. Nothing can be imported to assign a different meaning to the provision of law. It has to be applied and interpreted in the manner as is prescribed by law. Since the case of the petitioner falls under sub-Rule (1), therefore, no other meanings can be assigned to the provision of law to bring the levy under sub-Rule (3) rather it has to be levied in the same manner as has been prescribed by law. There is no necessity of further dilating upon the same issue as the matter has earlier been dealt with, by a Division Bench of this Court in the case of Ghulam Shabbir (supra) and by Hon'ble Supreme Court in the case of Municipal Committee, Tehsil Talagang through Chairman (supra). The Hon'ble Supreme Court has held that transfer tax would become payable in favour of the auction purchaser when sale-deed is registered. Transfer Tax is charged from the auction-purchaser, in view of the provisions of Rule 4(1) and not under residuary sub-Rule (3).

10. For the foregoing, this petition is accepted, the impugned decision of the respondents that transfer tax is payable on the rate prevalent on the date of auction and not on the date when the sale-deed was registered is declared to have been taken/passed without lawful authority and with no legal effect. It is declared that transfer tax from the 'petitioner is to be levied and collected under Rule 4(1) at the rate which prevailed on the date on which the sale-deed was registered.

M.H./I-12/LPetition allowed.