MUHAMMAD KHALID QURESHI VS PROVINCE OF PUNJAB through Secretary, Excise and Taxation Department, Lahore, 2017 PTD-LAHORE-HIGH-COURT-LAHORE 805 (2016)

2017 P T D 805

[Lahore High Court]

Before Shahid Jamil Khan and Muhammad Sajid Mehmood Sethi, JJ

MUHAMMAD KHALID QURESHI

Versus

PROVINCE OF PUNJAB through Secretary, Excise and Taxation Department, Lahore and another

Writ Petition No.26223 of 2014, decided on 19/10/2016.

(a) Constitution of Pakistan---

----Art. 25---Equality, doctrine of---Scope---Intelligible differentia---Court, duty of---Legislature has been authorized to make classification on the basis of an intelligible differentia between distinct persons and things grouped together and from those who have been left out, provided it is not arbitrary or capricious---Court cannot demand scientific accuracy for the classification so created by the Legislature---Intelligible classification of persons, things or houses is not repugnant to the equality doctrine as long as the same is not arbitrary or capricious, is natural and reasonable and bears a fair and substantial relation to the objection of the Legislation.

Case-law referred.

(b) Punjab Finance Act (XVII of 2014)---

----S. 8(9)---Constitution of Pakistan, Art.25---Luxury House Tax---Exemption---Scope---Legislature had empowered competent authority to exempt certain individuals/area from payment of luxury tax---Such provisions of law are in consonance with the mandate of the Constitution.

Case-law referred.

(c) Punjab Finance Act (XVII of 2014)---

----S. 8---Punjab Urban Immovable Property Tax Act (V of 1958), S.3(2)---Constitution of Pakistan, Arts.142, 260 & Fourth Schedule, Federal Legislative List, Entry 50---Taxation---Provincial authority---Immovable property---Luxury House Tax, vires of---Double taxation---Petitioners were aggrieved of levy of tax under Punjab Finance Act, 2014, on Luxury Houses---Plea raised by petitioners was that levy of such tax was ultra vires the Constitution---Validity---Provincial Legislature was given exclusive powers under Art.142 of the Constitution, on the subjects not included in Federal Legislative List---Language of Entry No.50 of Federal Legislative List gave the Parliament power to levy taxes on capital value of assets and specifically excluded Parliament to levy taxes on immovable property---Provincial Assembly was vested with exclusive power to levy taxes on immovable property---Federal Legislature, under Entry 50 of the Fourth Schedule to the Constitution, read with Art.142(c) of the Constitution, could tax only capital value of assets---Provincial Legislature was made competent to tax remaining all aspects of immovable property---Interpretation of any legislative entry in Constitution itself had to be broad and liberal---Definition of "taxation" available in Art.260 of the Constitution manifested that competence of Province to tax an immovable property could not be given restricted meaning---Taxation included imposition of any tax or duty, whether general, local or special---High Court declined to interfere with Luxury House Tax levied by Provincial Government---Constitutional petition was dismissed accordingly.

Case-law referred.

(d) Punjab Finance Act (XVII of 2014)---

----S. 8---Punjab Urban Immovable Property Tax Act (V of 1958), S.3(2)---Luxury House Tax, vires of---Double taxation---Petitioners assailed show-cause notices issued by authorities for recovery of Luxury House Tax, as imposed under S.8 of Punjab Finance Act, 2014---Plea raised by petitioners was that levy of such tax was double taxation as authorities were already recovering property tax under Punjab Urban Immovable Property Tax Act, 1958---Validity---Two levies in question were charged neither for the same purpose nor on the same basis---Tax sought to be imposed by provision in question could not be termed "double taxation"---Marked distinction existed in both the levies, as tax in question was one time levy on the land and superstructure, whereas property tax under S.3(2) of Punjab Urban Immovable Property Tax Act, 1958, was levied, charged and paid on annual value of buildings and lands in rating areas---All statutory authorities or bodies derived their powers from statutes which created them and from the rules and regulations framed thereunder---Any action taken or exercise of powers by a statutory authority or body, which was in derogation of the statute/rules could be assailed and declared ultra vires---High Court declared show-cause notices issued to petitioners without lawful authority as no assessment was carried out in terms of S.8(1) of Punjab Finance Act, 2014---Constitutional petitions were allowed accordingly.

Case-law referred.

(e) Interpretation of statutes---

----Retrospective effect---Scope---Legislature is fully competent to pass legislation with retrospective effect, even to the extent of taking away a vested right.

Case-law referred.

(f) Taxation---

----Levy of tax---Vires---Power of court---Scope---Power to levy taxes is a sine qua non for the State insofar as the same is essential for the purposes of generating financial resources and utilization of those resources for welfare of people at large---Legislature enjoys plenary power to impose taxes within the framework of the Constitution and such power rests on necessity as it is an essential and inherent attribute of sovereignty belonging to a matter of right to every independent State or government---By exercising such powers, mala fide cannot be attributed to legislature.

Case-law referred.

(g) Legislature---

----Wisdom of legislature---Scope---Wisdom of legislature should not be questioned by Courts, as long as the law in question is not violative of fundamental rights guaranteed by the Constitution----As long as Legislature has competence to legislate grounds or wisdom of Legislature remains its exclusive prerogative---Legislature is not debarred from promulgating provisions of law under the Constitution.

Case-law referred.

(h) Statute, vires of---

----Two interpretations---Effect---Where validity of a statute or provision thereof is questioned and there are two interpretations, one which makes the law valid, is to be preferred over the other which renders it void---Criteria before Court, for determining vires of a provision of law is that Court must be able to hold beyond any iota of doubt that violation of Constitutional provisions was so glaring that Legislative provision under challenge could not stand---Without such violation of Constitutional provisions, law made by Parliament or a State Legislature cannot be declared bad.

Case-law referred.

Salman Mansoor, Taffazul H. Rizvi, Zahoor Ali Nasir Tagga and Noshab A. Khan, argued the case on behalf of all the Petitioners. The names of remaining lawyers representing and appearing on behalf of the petitioners are mentioned in Schedule-A.

Khawaja Haris Ahmad, Tahir Mehmood Ahmad Khokhar, Standing Counsel for Pakistan, Shan Gull Additional Advocate General assisted by Muhammad Hammad Khan Rai, Barrister Khalid Waheed Khan, Omar Farooq and Muhammad Ejaz, A.A.G's for Respondents.

Dates of hearing: 24th February, 9th, 14th March, 18th, 24th, 26th, 31st May, 1st, June, 11th, 13th, 19th, 20th and 21st July, 2016.

JUDGMENT

MUHAMMAD SAJID MEHMOOD SETHI, J.--- This consolidated judgment shall decide instant petition, as well as, connected petitions mentioned in Schedule-A, as all these cases raise common questions of law and facts.

2.Petitioners are aggrieved by levy of "Luxury House Tax" imposed by Government of Punjab through Section 8 of the Punjab Finance Act, 2014 ("PFA, 2014"). Government of Punjab has re-imposed luxury tax on residential houses measuring 02-Kanals or above and 08-Kanals or above, located on the immovable property in the limits of: (a) a notified rating area under the Punjab Urban Immovable Property Tax Act, 1958 (V of 1958) ("the Act of 1958"); (b) a cantonment under the Cantonments Act, 1924; and (c) any other area within the province as notified by the Government. Petitioners received notices along with Challan Form No.32-A, demanding assessed luxury tax on their houses. Through these petitions, petitioners call in question the legality / constitutional validity of the law as well as charging, levy, assessment and demand of luxury tax on residential houses introduced by Section 8 of the PFA, 2014, along with impugned demand notices/ Challans. Prayer of instant petition reads as follows:--

"It is, therefore, most respectfully prayed that the impugned luxury tax on residential house re-imposed by and /or under Section 8 of the Punjab Finance Act, 2014 may graciously be struck down and being discriminatory and inconsistent with the fundamental rights entrenched in the Constitution of the Islamic Republic of Pakistan, 1973,

It is further prayed that the impugned Notice may very kindly be set-aside.

It is also prayed that the operation of the Impugned Notice issued by the respondent No.2 may graciously be suspended and the respondents may kindly be restrained from adopting coercive measures for the recovery of impugned luxury tax till the final decision of instant Writ Petition. An appropriate writ/direction may kindly be granted/ issued against the respondents."

3.Mr. Salman Mansoor, Advocate for petitioners opens his arguments by challenging the vires of Section 8 of the PFA, 2014, inter alia, contending that charging of "luxury house tax" is in violation of Article 25 of the Constitution of the Islamic Republic of Pakistan, 1973 ("the Constitution"). Relying on Messrs Elahi Cotton Mills Ltd. and others v. Federation of Pakistan, through Secretary M/o Finance, Islamabad and 6 others (PLD 1997 SC 582 = 1997 PTD 1555), he contends that impugned First Schedule is ultra vires Article 25 of the Constitution, in as much as it adopts a totally irrational and unreasonable criteria of classification, having no rational nexus with the object of the statute. The basic attack is that categories in First Schedule place/treat differently placed properties in a similar and uniform manner by adopting an irrational and unreasonable criteria of area measurement only. He adds that vastly different and dissimilar properties having different value and different nature of luxury or no luxury at all have been clubbed together in only two categories of 2 Kanals and 8 Kanals or above, which violates the basic ingredient of classification that "things of equal value are to be taxed equally". This is ex-facie discrimination. He submits that in Lahore, one Kanal is equivalent to 4500 Sqft wherein one Marla is equal to 225 Sqft. Whereas, in other areas of the Province, one Kanal consists of 5440 Sqft. and one Marla is equal to 272 Sqft. Hence, even the area in Kanals is not similar and equal throughout Punjab, therefore, imposition of "Luxury House Tax" with reference to Kanal is thus arbitrary, whimsical and discriminatory. He refers different paragraphs and lines from the judgment delivered in Messrs Elahi Cotton Mills' Case (supra), wherein Hon'ble Supreme Court of Pakistan cited different judgments from Indian jurisdiction and also quoted different paras, inter alia, including The State of Kerala v. Haji K. Kutty Naha and others (AIR 1969 Supreme Court 378) and Kunnathat Thathunni Moopil Nair and others. v. State of Kerala and another (AIR 1961 Supreme Court 552).

Learned counsel also refers to the observations of Indian Supreme Court contained in Navnit Lal C. Javeri v. K.K. Sen, Appellate Assistant Commissioner of Income-tax, Bombay (AIR 1965 Supreme Court 1375), available in Messrs Elahi Cotton Mills' Case (supra) at page 653 and reads as under:--

"....This doctrine does not, however, mean that Parliament can choose to tax as income on item which in no rational sense can be regarded as a citizen's income. The item taxed should rationally be capable of being considered as the income of a citizen...."

He also relies on I.A. Sharwani and others v. Government of Pakistan through Secretary, Finance Division, Islamabad and others (1991 SCMR 1041) to contend that classification must be based on an intelligible differentia which distinguishes persons or things that are grouped together from those who have been left out. He continues to argue that differentia must have rational nexus to the object sought to be achieved by such classification.

He relies on Bhuvaneswariah and others v. State of Mysore and others (AIR 1965 Mysore 170) and Lokmanya Mills Barsi Ltd. v. Barsi Borough Municipality, Barsi (AIR 1961 Supreme Court 1358) and contends that impugned legislation does not qualify the test of judgments, reproduced above. He adds that taxation has direct nexus with the capacity to pay tax but in this case the said principle has totally been ignored by the legislature.

On facts, he submits that ante-dated notices for recovery of impugned tax, without framing any rules, were served upon the petitioners. He maintains that no jurisdiction was vested with respondent No.2 to issue notices and to charge or collect the impugned tax. He adds that the rules were promulgated through Gazette Notification dated 19.11.2014, wherein a procedure for the purpose of assessment and collection was given. He argues that impugned notices could not have been issued without prior assessment of the property. He has placed reliance on Assistant Collector Customs, Dry Port, Peshawar and others v. Messrs Khyber Electric Lamps MFG Co. Ltd., Peshawar (2001 SCMR 838).

He argues that valuation and assessment of property before taxation is fundamental right of the petitioners but no mechanism/ machinery for assessment of the property to be taxed is provided in PFA, 2014. He has also referred Government of Punjab through Secretary, Excise and Taxation, Lahore and others v. Jamshed Waheed and another (2004 SCMR 1146), whereby decision of this Court reported as Jamshed Waheed v. Government of Punjab through Secretary, Excise and Taxation, Lahore and 5 others (PLD 2001 Lahore 395) was upheld by Hon'ble Supreme Court of Pakistan and the method for evaluation, as provided under Section 5(a) of the Act of 1958, was turned down. He has also placed reliance on Messrs Metropole Cinema (Pvt.) Ltd. v. Government of Punjab and others (2007 SCMR 1937) to conclude his ground that fair and transparent method of assessment/evaluation is pre-requisite to charge/levy tax on property.

Arguing on the exceptions to general rule that legislation is made competently and Courts are to save the same to the maximum extent, learned counsel submits that a provision of law can be declared as ultra-vires, if it offends fundamental rights guaranteed under the Constitution and the same is ex-proprietary and confiscatory in nature. He has placed reliance on judgment in Messrs Elahi Cotton Mills' Case (supra). He maintains that any attempt of recovering/levying the tax in violation of fundamental rights guaranteed under Articles 23 and 24 of the Constitution shall be liable to be struck down or declared ultra-vires. He submits that any provision of law, absurd in nature and not workable despite effort to harmonize it, is liable to be struck down. He relies on Engineer Iqbal Zafar Jhagra and another v. Federation of Pakistan and others (2013 SCMR 1337). He argues that any taxing provision legislated with the purpose to give benefit or to penalize the subject instead of collecting revenue is liable to be struck down. He has placed reliance on judgment in Baz Muhammad Kakar and others v. Federation of Pakistan through Ministry of Law and Justice and others (PLD 2012 SC 923) and contends that an attempt to take away the right of being assessed for tax in question has been made through the impugned legislation, which is liable to be declared ultra-vires. He continues to argue that any legislation intending to disturb the scheme of the Constitution, including any judgment of Hon'ble Supreme Court determining rights of the citizens, can also be held ultra-vires. To substantiate this submission, he placed reliance on Ziaullah v. Najeebullah and others (PLD 2003 SC 656) and Jamat-i-Islami Pakistan through Syed Munawar Hassan, Secretary-General v. Federation of Pakistan through Secretary, Law, Justice and Parliamentary Affairs (PLD 2000 SC 111).

Learned counsel for the petitioners argued that the impugned tax does not fall within the purview of legislative competence of the Province. It falls within the first portion of Entry No.50 of the Federal Legislative List available in Fourth Schedule of the Constitution. He reiterates that Entry No.50, read in the context of above, postulates that "Taxes on the Capital Value of the Assets" fall within the ambit of the Federation, and that is why Capital Value Tax/CVT on the immovable property is being levied by the Federal Government imposed through Circular No.18 of 1992 read with the Finance Act, 1992. He submits that it is a universally accepted definition of the Capital Value (as distinguished from the actual Market Value) that "Capital Value is the Probable Price/Hypothetical Price that would have been and could be paid for the asset/property, being a price on which it is likely to be sold". He adds that it is also a principle of universal application that all taxes on the capital value of an asset are normally one-time taxes. The taxes on one-time basis are assessed on the capital value of the assets, as capacity as well as quantum of tax is determined and based upon capital value of the asset. He has relied on judgment in Bhuvaneswariah and others v. State of Mysore and others (AIR 1965 Mysore 170) and Flying Cement Company v. Federation of Pakistan and others (PLD 2016 Lahore 35).

He further contends that tax which is on immovable property and not on its capital value is normally on the basis of its annual letting value or the income being generated from such and is thus on a regular basis. In present case, the First Schedule calculates the tax on the property assuming a probable value of any 2 Kanals/8 Kanals Plot throughout the Province and then on the basis of that assumed/ probable value of the capital assets determines the burden of tax that is to be borne by the citizens. Law neither assesses the value of land nor assesses the luxury. How does it then calculate the quantum of tax? Answer is, on basis of assuming a probable value. Keeping in view this factor, it is clear that in pith and substance, it is a tax on the capital of the immovable property and such tax is not covered by the general entry of taxes on the immovable property. Property is also an asset and has been targeted as a high capital value asset and all taxes on the capital value of the property fall within domain of the Federation.

Learned counsel adds that entire assessment process cannot be completed without due process of law and without notices as ordained in Article 10-A of the Constitution.

He adds that unbridled powers of exemption have been given in the impugned legislation. He contends that mere delegation of power to exempt, without any controlling parameters, was deprecated and held insufficient to cure the defect in the legislation. He has referred to Shaukat Ali Mian and another v. The Federation of Pakistan (1999 CLC 607), Haji K. Kutty Naha 's case (supra) and Lokmanya Mills Barsi Ltd.'s case (supra).

He has placed reliance on Trustees of the Port of Karachi v. Muhammad Saleem (1994 SCMR 2213) to contend that a judgment has force of precedent only to the extent of law point decided in it and not otherwise. He adds that in Syed Aizad Hussain and others v. Motor Registration Authority and others (PLD 2010 SC 983) the ground of assessment, as well as, inter se clause of discrimination was neither raised nor was in issue at all. Further submits that in the case of tax on luxury vehicles, a tax was levied on a product whereas, in the instant case, tax was being levied on a land for which different parameters were to be looked into by the legislation. He concludes that the word "luxury" has not been explained in the entire legislation as no definition of luxury is spelled out from its provisions.

4.Mr. Taffazul H. Rizvi, Advocate for petitioners, by referring to definitions of "Luxury Tax", submits that "Luxury Tax" means "anything which is over and above the necessaries/necessities of life". He explains that a house (immovable property) measuring 02- Kanals or above is not luxury per se. By referring to judgments from Indian Jurisdiction, he submits that method of levying luxury tax has not been adhered to in the impugned law. He relied on A. B. Abdul Kadir and others v. State of Kerala (AIR 1976 SC 182) and State of Haryana and others v. Shri Ram Chander ((1976) 2 SCR 690).

Learned counsel submits that imposing luxury tax on immovable property is putting a limit of holding immovable property, which is in the exclusive legislative domain of Majlis-e-Shura/Parliament.

Learned counsel further submits that by giving definition of "owner" in Rule 2(f) of the Punjab Luxury House Tax Rules, 2014 ("Rules of 2014"), the government has travelled beyond the capacity given under Section 8(13(a)) of PFA, 2014. He explains that in subsection (3) the word "owner" or "occupant" is used for the purposes of charging tax. He further explains that by defining the word "owner" the liability is extended on the lessee. By referring to Displaced Persons (Compensation and Rehabilitation) Act, 1958, for the purpose of allotting the immovable property, learned counsel submits that the framers have ignored Displaced Persons (Land Settlement) Act, 1958. He concludes that the definition to this extent is vague and cannot be enforced.

5.Mr. Zahoor Ali Nasir Tagga, Advocate, appearing on behalf of petitioners, submits that Luxury Tax is not defined in PFA, 2014, therefore, its dictionary meanings are to be considered. As per Black's Law Dictionary, "Luxury Tax" is "Excise Tax" and under Entry No.49 of Fourth Schedule of the Constitution, it is leviable exclusively by the Federal Government. He was confronted with the definition of "Excise Tax", which is leviable on production or sale of goods; whereas the instant tax/levy, as per Section 8 of PFA, 2014, is on immovable property, whereupon he could not reply satisfactorily. He has referred to Item No.62 of State List in the Indian Constitution to contend that Luxury Tax is placed along with entertainment, betting and gambling, therefore, following the principle of ejusdem generis, it cannot be levied on mere use of immovable property. He submits that if this tax is on value of immovable property, then it falls under Item No.50 of Fourth Schedule of the Constitution, where-under capital value of any immovable property is taxable by Federal Government. He further submits that it is not specified whether the impugned tax is on value of the immovable property or not. He argues that there is difference between Bill and the Act passed by the Provincial Government. He adds that no debate was conducted before passing the Bill, therefore, the impugned legislation is ultra vires in view of Article 70 of the Constitution. He has referred to Warid Telecom (Pvt.) Ltd. and others v. Federation of Pakistan and others (2014 PTD 752) to contend that if the levy is on use of immovable property, then it is an unwarranted double taxation. He also referred to Pakistan Steel Mills Corporation v. Muhammad Azam Katper and others (2002 SCMR 1023) to contend that a tax cannot be levied retrospectively. It is also argued that use of a property is income as per judgment in Abdul Hafeez Abbasi and others v. Managing Director, Pakistan International Airlines Corporation, Karachi and others (2002 SCMR 1034), therefore, it is taxable by the Federal Legislature only.

6.Mr. Noshab A. Khan, Advocate along with other learned counsel for connected writ petitions, whose names are appearing in Schedule A, besides challenging the vires of law as well as rules and notices issued by respondents, has also addressed his arguments on the points i.e. (i) confiscatory in nature; (ii) double taxation; and (iii) retrospective effect. They have adopted the arguments advanced by the above mentioned learned counsel for petitioners.

7.Kh. Haris Ahmad, Advocate for the respondents, referring Entry No.50 of the Fourth Schedule of the Constitution submits that all the residuary items/subjects not mentioned in the Fourth Schedule fall within the competence of Provincial Legislature. He contends that Entry No.50 specifically excluded tax on immovable property from the competence of Federal Legislature. He further submits that the interpretation of any legislative entry in the Constitution itself has to be construed broadly and liberally.

He read definition of "taxation" from Article 260 of the Constitution to submit that competence of a Province to tax an immovable property cannot be given restricted meaning. It gives power to legislate all kinds of taxes including tax on luxury relating to immovable property.

Answering to Court's query, regarding argument of Mr. Salman Mansoor, Advocate for the petitioners, that by Section 8 of Act of 1997 'one time luxury tax' has already been imposed on houses/immovable property comprising of 4 Kanals and more, therefore, the same tax cannot be levied again through recent/subsequent legislation, which would amount to double taxation, learned counsel submits that the instant levy is on the houses constructed w.e.f. the year 2001.

In response to the arguments made by petitioners' side, he submits that this tax is composite and rate of tax mentioned in First Schedule is a formula for the purpose of taxing the houses and land for assessing the tax on the luxury houses, which includes land and structures. When confronted with phrase in subsection (1) of Section 8 "located on the immovable property in the limits of" with the definition of residential houses read with the formula given in the First Schedule, he has reiterated the submissions noted above and argued that, in case of challenge to vires of a legislation, if two interpretations are possible, only favouring the legislation is to be adopted. He adds that the phrase noted above is meant only for the houses located within the limits of notified areas and has reiterated that it is not only a superstructure which is being charged on an immovable property.

Learned counsel for the respondents alternatively submits that if this Court reaches the opinion that it is a tax being charged on the superstructure, even then the legislature is competent to levy such tax, as it is not on capital value of the property. He further submits that what is being taxed through this legislation is relating to luxury.

Responding to the argument that taxing the properties which are not luxurious in nature, or the owners of the properties do not have capacity to pay the tax, he submits that Clause (a) of subsection (9) of Section 8 of PFA, 2014 has also delegated powers to the Government (Provincial Government), who may exempt any area or any residential house or a person from the whole or any part of tax charged under this Section. He further contends that under clause (b) of subsection (9), even grievance committee can exempt any residential house which directly addresses the hardship cases. He adds that on the basis of one or two examples of hardship, a law cannot be set at naught or declared ultra vires.

He submits that procedure of furnishing return and assessment has been given in Rules of 2014. Under Rule 2(b) of the Rules of 2014, Senior Excise and Taxation Officer or Excise and Taxation Officer, having jurisdiction in the district, is the assessing authority. He adds that in view of Section 8(10) of the PFA, 2014 read with Rules of 2014, tax is to be paid, recovered, administered and regulated, as nearly as possible, according to procedure already given under the Act of 1958. He further contends that the Rules of 2014 are substantially in consonance with the procedure given in the Act of 1958.

He relied on Messrs Elahi Cotton Mills' Case (supra) to submit that tax can be imposed upon intelligible recognized class of persons, and that double taxation is not prohibited by the Constitution.

Learned counsel argues that capacity of Provincial Legislature to tax on luxury motor cars has already been decided by learned Division Bench of this Court in Syed Muhammad Murtaza Zaidi v. Motor Registration Authority and others (2010 CLC 494). He adds that almost all the grounds raised by petitioners vis- -vis retrospective application of a legal provision, vested right of petitioners, double taxation, competence of the Legislature, discrimination and reasonable classification, etc. have already been answered in the said case. He has read relevant portions from judgment in Syed Azad Hussain's case (supra) to submit that the decision of learned Division Bench was upheld by the august Supreme Court of Pakistan after attending to all the issues. To fortify his stance, he has emphasized on observation of Hon'ble Court to submit that the judgments from Indian Jurisdiction on the point of discrimination were not considered by Hon'ble Court because of non-availability of such parallel provisions in the Constitution of Pakistan. He has also read Section 6 of the Punjab Finance Act, 2008 ("Act of 2008"), whereby tax was imposed on vehicles, to submit that provisions of Section 8 of PFA, 2014 are pari materia.

On Court's query, that one Kanal of land is differently measured in different districts of Punjab, learned counsel has conceded this fact, however, relying on Government of Balochistan through Additional Chief Secretary v. Azizullah Memon and 16 others (PLD 1993 SC 341), submits that Courts should not expect from the Legislature to draw a scientific accuracy for the purpose of taxing a class of persons. He submits that the law has chosen to tax on the basis of Kanal irrespective of its measurement, which cannot said to be discrimination to declare it as ultra vires. On the question of ultra vires, he has referred to a latest judgment by Hon'ble Supreme Court of Pakistan in Lahore Development Authority through D.G. and others v. Ms. Imrana Tiwana and others (2015 SCMR 1739 at 1769).

He has laid emphasis on the phrase "as nearly as possible" to submit that the Rules of 2014 made under subsection (13) of Section 8 are not ultra vires of the provisions of subsection (10). He has read provisions of Sections 12, 13, 14 and 16 of the Act of 1958 to substantiate his argument that the procedure given under the Rules is "as nearly as possible" and not in conflict with the Act of 1958.

He submits that any factual dispute regarding leviability and chargeability of tax can be seen by the grievance committee under subsection (11) of Section 8 of PFA, 2014. He has placed reliance on Syed Sagheer Hussain v. Province of Sindh through Chief Secretary and 2 others (2011 PLC (C.S.) 447), Collector of Sales Tax and Central Excise, Lahore v. Zamindara Paper and Board Mills and others and Commissioner of Income Tax, Karachi v. Abdul Ghani (2007 PTD 967) to submit that applying or wrong mentioning of any provision of law is not fatal if text of the notice conveys to the taxpayer the intent of legislature and reasons for levying tax etc. In support he has referred Messrs Nishat Mills Limited v. Superintendent of Central Excise Circle II and 3 others (PLD 1989 SC 222) and Saghir Ahmed through Legal Heirs v. Province of Punjab through Secretary, Housing and Physical Planning Lahore and others (PLD 2004 SC 261).

He has also referred to Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore Division, Lahore and 2 others (PLD 1971 SC 61 at pages 70 and 71) to submit that language of the provision itself is important to determine its mandatory or directory character. He further submits that the language of subsection (10) of Section 8 ibid is not couched in negative without any consequence, therefore, it is directory in nature.

In support of the interpretation of Phrase "as far as possible" he has referred to the judgments in State of Madhya Pradesh v. Narmada Bachao Andolan and another [(2011) 7 Supreme Court Cases 639)] and Iridium India Telecom Ltd., v. Motorola Inc. (AIR 2005 Supreme Court 514 at page 523).

On phrase "as nearly as possible" he has referred to judgment in R.C. Poundyal v. Union of India and others (1994 Supp (1) Supreme Court Cases 324 at page 404), to conclude that this phrase does not require that the procedure provided under the Act of 1958 or Rules made thereunder, shall be applicable for levying luxury tax in question. In support, he has also referred to judgment in Mian Farooq Ahmed Sheikh and 8 others v. Privatization Commission through Chairman and 4 others (2006 CLD 1130 at page 1139).

8.Mr. Shan Gull, Additional Advocate General has also argued for Province of Punjab, upon notice under Section 27A of the C.P.C. At the outset, he has apprised that the law under challenge was reframed when some important issues were pointed out. At first the old inherited houses and the properties owned by widows were not exempted and the properties within cantonment areas were also not included for the purpose of taxation.

Relying on Messrs Elahi Cotton Mills' Case (supra), learned Additional Advocate General submits that power of taxation rests on necessity and it is an inherent power of every independent State or Government. He has referred Article 142(c) of the Constitution along with Entry No.50, and submits that the only clause relating to immovable property i.e., tax on capital gain has already been removed by 18th amendment, therefore, Provincial Legislature is competent and has power to tax an immovable property within the Province. By referring to Syed Muhammad Murtaza Zaidi's case (supra) and Syed Aizad Hussain's case (supra), he submits that the tax imposed on luxury motor cars on the basis of their engine capacity, has already been upheld by learned Division Bench of this Court and thereafter by Hon'ble Supreme Court of Pakistan. Relying on said decisions, he submits that under Section 8(1) of the PFA, 2014, luxurious nature of residential houses has been taxed, based upon the size and area of property.

9.On the point of discrimination, he relied on Anoud Power Generation Limited and others v. Federation of Pakistan and others (PLD 2001 SC 340 at 349) to contend that Hon'ble Supreme Court has held that in fiscal statute element of discrimination can neither be pleaded nor such statute can be struck down at the touchstone of Article 25 of the Constitution. He has also relied on judgments in I.A. Sharwani's case (supra) and Messrs Elahi Cotton Mills' Case (supra), to submit that as long as there is uniformity within each group, there is no discrimination.

10.On double taxation, he submits that State is authorized to tax additionally or doubly. He contends that previously luxury tax was imposed on houses having different sizes and specifications, therefore, the impugned tax cannot be termed as 'double taxation'. He adds that even otherwise Legislature cannot be bound by any previous legislation, not to legislate in future. He has relied on Special Reference under Article 187 of the Interim Constitution of the Islamic Republic of Pakistan by President Zulfikar Ali Bhutto (PLD 1973 SC 563 at 576) and Ms. Imrana Tiwana's Case (Supra).

Responding to an argument by learned counsel for the petitioners that in fact value of a house is being taxed, he submits that size and area of the property are the basis for taxation in question, therefore, it is not a tax on value. He submits that the tax could have been said a tax on value if it had been imposed differently on a house of two Kanals at Defence and on a house of two Kanals in another area.

Replying to Court's query, whether law in question is confiscatory/ex-proprietary, learned Additional Advocate General submits that it is not confiscatory because law permits payment of the tax in installments. He refers subsection (4) of Section 8. By referring to Section 8 (9), he submits that a safety wall against the rigor of law has also been provided by bestowing power of exemption on the Government and the grievance committee in hardship cases, in addition to the exemptions given in the Second Schedule, which will be subjected to judicial scrutiny before different fora. By referring Messrs Elahi Cotton Mills' Case (supra) (page 676), Call Tell and another v. Federation of Pakistan and others (2005 PTD 833 at page 845), State of M. P. v. Rakesh Kohli and another (2013 SCMR 34 at page 48) and Sohail Jute Mills Ltd. and others v. Federation of Pakistan through Secretary, Ministry of Finance and others (PLD 1991 SC 329 at page 341), he submits that harshness of the law cannot be made basis for striking it down on the altar of vires.

Further submits that the policy focused in any legislation cannot be challenged on the ground of competence. He has referred to Raja Jagannath Baksh Singh v. The State of Uttar Pradesh and another [1963 (1) SCR 220] and R.K. Garg v. Union of India and others (AIR 1981 SC 2138) in this regard.

11.We have given anxious consideration to the arguments of learned representatives of both the sides and have gone through the record with their able assistance.

12.The imposition of "Luxury House Tax" in the Province of Punjab is not a recent development. Legislative history shows that it was introduced by Section 8 of the Act of 1997 and remained on statute book till the year 2000, when by Section 12 of the Finance Act, 2000, it was repealed. The repealed Section 8 of the Act of 1997 envisaged 'one time levy' on an area measuring 4 Kanals and above. Subsequently, this tax was again introduced by Section 10 of the Act of 2013. However, the same was also challenged and, during proceedings, it was repealed through Section 7 of PFA, 2014.

The impugned "Luxury House Tax" was re-introduced through Section 8 of PFA, 2014, which was published in the Gazette on 26.06.2014, and brought into force on 01.07.2014. The charging provisions of Section 8 of the PFA, 2014, are reproduced hereunder:-

"8.Luxury house tax.---(1) Subject to the provisions of this section, there shall be charged, levied, assessed and paid a tax, known as luxury house tax, on categories of residential house and at such rate as specified in the First Schedule, located on the immoveable property in the limits of: (a) a notified rating area under the Punjab Urban Immoveable Property Tax Act, 1958 (V of 1958); (b) a cantonment under the Cantonments Act, 1924 (II of 1924); and (c) any other area within the Province as notified by the Government at the rate specified for the remaining rating areas and cantonments under the First Schedule.

(2)The tax shall be charged, levied, assessed and paid in addition to any other tax charged and collected under any other law for the time being in force and shall be the first charge upon the residential house.

(3)The liability to pay the tax shall be of the owner or occupant, jointly and severally.

(4)The tax shall be paid once either in lump sum on or before September 30, 2014 or in four equal quarterly instalments with first instalment payable on or before September 30, 2014 and the subsequent three equal instalments being payable on or before the last day of each concerned quarter.

(5)In the event a residential house is constructed after the commencement of this Act, the tax shall be charged, levied, assessed and paid in the above manner and, in such a case, the tax shall be payable in lump sum on or before the last day of the first quarter falling after the completion of construction and, in case of payment in instalments, first instalment being payable on or before last day of the first quarter falling after the completion of construction and the subsequent three equal instalments being payable on or before the last day of each concerned quarter thereafter."

13.Subsection (1) of Section 8, reproduced above, shows that a tax known as "Luxury House Tax" is levied on residential houses. The categories of residential houses and rates of the tax payable have been given in the First Schedule. The residential houses located in the rating areas as specified in the First Schedule are subjected to tax. The First Schedule, when read with subsection (1), shows that the tax is charged on an area and superstructure constructed thereon. The legal position is, however, clarified by the definition of "residential houses" as given in Section 8(14)(d).

14.To examine the categories of residential houses and rates of tax thereon, examination of First Schedule is necessary, therefore, the same is reproduced hereunder:-

FIRST SCHEDULE

[See section 8(1)]

Location	Category of Residential House	Rate of Tax
In Lahore District including Lahore Cantonment and Walton Cantonment	Two Kanals or above with covered area more than six thousand square feet. ----------------- Eight Kanals or above with covered area More than twelve thousand square feet.	Rs.250,000/- per Kanal subject to a Maximum of Rs.2000,000/- ---------------- Rs.300,000/- per Kanal subject to a maximum of Rs.3,600,000/-
In rating areas of Divisional Headquarters District and all the Cantonments in the District of Divisional Headquarters	Two Kanals or above with covered area more than six thousand square feet. ----------------- Eight Kanals or above with covered area more than twelve thousand square feet.	Rs.200,000/- per Kanal subject to a maximum of Rs.1,600,000/- ----------------- Rs.250,000/-per Kanal subject to a Maximum of Rs.3,000,000/-
In remaining rating areas and Cantonments	Two Kanals or above with covered area more than six thousand square feet. ----------------- Eight Kanals or above with covered area more than twelve thousand square feet.	(1) Rs.150,000/- per Kanal subject to a maximum of Rs.1,200,000/- ----------------- (2) Rs.200,000/- per kanal subject to maximum of Rs.2,400,000/-
*Provided that for calculating tax for an additional area less than one Kanal, pro rata rates for each full marla shall be applied and area less than one marla shall be excluded.

Column 1 of the Schedule is showing the rating area and Column 2 is stipulating the categories of residential houses to be charged to tax and in Column 3, rate of tax is given. In Lahore district, for instance a land of two Kanal or above with covered area of more than six thousand square feet and a land measuring eight Kanals or above with covered area of more than twelve thousand square feet are subject to tax. Rates of tax on both the categories are different.

15.Now, we advert to answer the argument regarding classification of residential houses, which is assailed on the grounds: first, one Kanal land is differently measured in different districts of Punjab, and, second, value of one Kanal land is also not same in the locations mentioned in the first column of the Schedule. It has been strongly argued that said classification is not based on intelligible differentia, rather it is discriminatory and violative to Article 25 of the Constitution, as it infringes fundamental rights of the petitioners.

We have examined this submission in the light of judgments by superior courts and the same is not found convincing for the reasons hereunder:

Legislature has been authorized to make a classification on the basis of an intelligible differentia between distinct persons and things grouped together and from those who have been left out, provided it is not arbitrary or capricious. Courts cannot demand scientific accuracy for the classification so created by the Legislature.

Examination of the assailed provision, discussed supra, does not show that classification/category mentioned in Column 1 and 2 of First Schedule are arbitrary or capricious. Legislature has, in its wisdom, intended to tax the houses, with the name "Luxury House Tax", measurement of which is of more than the specified area. Different measurement of a Marla in different rating areas (districts) is also not found arbitrary or capricious. To answer this plea, reference can be made to Aziz Ullah Memon's case (supra) whereby it is held that scientific accuracy cannot be demanded from the Legislature. Even otherwise, difference in measurement of lands in different rating areas/districts is itself a class and does not discriminate between similarly situated residential houses.

16. It would not be out of context to cite here the case of luxury tax on motor cars. Luxury tax on motor cars, classified in two categories on the basis of engine capacity, was challenged and the provision of law was declared as valid. In terms of Section 6 of the Act of 2008, the then Provincial Assembly had imposed a tax on imported luxury motor cars of "specified categories" registered in the Punjab after 30th June, 2005. These categories were specified in the Schedule so as to impose a tax of Rs.200,000/- on imported cars with engine capacity from 2000cc to 3000cc, and Rs.300,000/- on imported cars with engine capacity exceeding 3000cc. As such, Section 6 of the Act of 2008 classified cars on the basis of engine capacity. The afore-noted provision was held to be valid and constitutional in the first instance by learned Division Bench of this Court in Syed Muhammad Murtaza Zaidi's case (supra). It was held that the impugned provision was not discriminatory, with the following observation:

"All the vehicles of the given engine power, from a particular date have been subjected to tax and this is across the board, and the capacity criterion in this behalf constitutes a class itself which is not shown to be based on any irrational criteria, rather the use and enjoyment of the vehicles having a bigger engine force are the subject/object of the tax, which is rationally founded" (at p.505).

This judgment was upheld by the Hon'ble Supreme Court in Syed Aizad Hussain's case (supra). The use of engine capacity as criterion for classification was recognized and was held to have not offended the mandate of Article 25 of the Constitution. The said legislative provision upheld in the above referred cases is in pari materia with Section 8 of the PFA, 2014.

Similar argument, as put forth before us to assail the levy of luxury tax on residential houses, has already been addressed by learned Division Bench of this Court and Hon'ble Supreme Court. Plea of discrimination was discarded by holding that vehicle of a specified engine capacity, termed as "Luxury", could be taxed as a class. In instant case as well, a residential house in a specified area having a specified superstructure built thereon has been taxed by creating a class itself. In our opinion, the classification is rational and intelligible. To fortify this opinion, it is re-emphasized that intelligible classification of persons, things or houses is not repugnant to the equality doctrine as long as the same is not arbitrary or capricious, is natural and reasonable and bears a fair and substantial relation to the object of the legislation. It is not for the Courts in such cases to demand from the Legislature a scientific accuracy in the adopted classification. Reference is made to case law cited as Jibendra Kishore Achharyya Chowdhury and 58 others v. The Province of East Pakistan and Secretary, Finance and Revenue (Revenue) Department, Government of East Pakistan (PLD 1957 SC (Pak.) 9).

17.In taxation matters, a fundamental right of being treated equally was brought before the Hon'ble Supreme Court in the case of Messrs Elahi Cotton Mills (supra). Law as enshrined by the Hon'ble Supreme Court in the judgment is reproduced hereunder:-

"46 . It may be observed that reasonable classification does not imply that every person should be taxed equally. It may be pointed out that reasonable classification is permissible provided it is based on an intelligible differentia which distinct persons or things that are grouped together from those who have been left out and that the differentia must have rational nexus to the object to be achieved by such classification. It may further be pointed out that different laws can be validly enacted for different sexes, persons in different age-groups, persons having different financial standings and that no standard of universal application to test reasonableness of a classification can be laid down as what may be reasonable classification in a particular set of circumstances, may be unreasonable in the other set of circumstances. The requirement of reasonable classification is fulfilled if in a taxing statute the Legislature has classified persons or properties into different categories which are subject to different rates of taxation with reference to income or property and such classification would not be open to attack on the ground of inequality or for the reason that the total burden resulting from such a classification is unequal. The question, as to whether a particular classification is valid or not cannot be decided on the basis of advantages and disadvantages to individual asessees which are accidental and inevitable and are inherent in every taxing statute as it has to draw a line somewhere and some cases necessarily may fall on the other side of the line ..

"We may observe that once the Court finds that, a fiscal statute does not suffer from any Constitutional infirmity, it is not supposed to entangle itself with the technical questions as to the scope and modality of its working etc. The above questions pre-eminently deserve to be decided by the Government which possesses of experts' services and the relevant information which necessitated imposition of the tax involved unless the same suffers from any legal infirmity which may warrant interference by the Court.

Additionally, while examining a Fiscal statute the Court should not be carried away with the fact that the same may be disadvantageous to some of the tax-payers. If such a fiscal statute is beneficial to the country on the whole, the individuals' interest should yield to the nationals' interest .."

We are also fortified from the principles deduced in paragraph 31 of the judgment delivered in Messrs Elahi Cotton Mills' case (supra), some of which read as under:-

(iv)That the Legislature is competent to classify persons or properties into different categories subject to different rates of tax. But if the same taxation, which results in inequality amongst holders of the same kind of property, it is liable to be struck down on account of infringement of the fundamental right relating to equality.

(vi)That the tests of the vice of discrimination in a taxing law are less rigorous. If there is equality and uniformity within each group founded on intelligible differentia having a rational nexus with the object sought to be achieved by the law, the Constitutional mandate that a law should not be discriminatory is fulfilled.

(vii) That the policy of a tax, in its operation, may result in hardships or advantages or disadvantages to individual assesses which are accidental and inevitable. Simpliciter this fact will not constitute violation of any of the fundamental rights.

The august Court has laid down that intelligible differentia should spell out from class of persons subject to tax, to achieve the object of Legislature. In the instant case, properties having specified area of land and superstructure thereon in different rating areas have been grouped to achieve the purpose of Legislature to tax bigger residential houses. The Courts while interpreting the taxing statutes are restrained from looking into the harshness of a taxing provision.

Steering thoughts can also be gathered from I.A. Sharwani's case (supra), where in paragraph 26(iv) following principle has been laid down:-

"that no standard of universal application to test reasonableness of a classification can be laid down as what may be reasonable classification in a particular set of circumstances, may be unreasonable in the other set of circumstances."

Paragraph 27(g) reads:-

"A classification need not be scientifically perfect or logically complete."

Court should keep in mind the social setting of the country, growing requirements of the society/nation, burning problems of the day and the complex issues being faced by the people, which the Legislature in its wisdom through legislation seeks to solve. Law should be saved rather than be destroyed. Policy of a tax in its effectuation may result in hardships in individual cases, but this is inevitable as held in Federation of Hotel and Restaurant v. Union of India and others (AIR 1990 SC 1637).

Section 8 of the PFA 2014, read with the First Schedule thereto, contemplates that the classification in the instant case, was made on the basis of size of a house, its age of construction, its location, etc. and we find that it is based on a reasonable distinction and on an intelligible differentia. The judgment of the Hon'ble Supreme Court of Pakistan in Messrs Elahi Cotton Mills' case (supra), relied upon by petitioners, holds that the requirement of Article 25 of the Constitution stands fulfilled as long as there is equality/uniformity within each group founded on intelligible differentia, and endorses the view that the State has the power to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably. We are of the view that all these conditions are duly catered for by the Provincial legislature while forming different categories of residential houses for the purpose of taxation. The judgment passed by this Hon'ble Court in Syed Muhammad Murtaza Zaidi's case (supra), is re-emphasized, wherein the vires of the Act of 2008 charging luxury tax on imported vehicles was questioned. The classification in respect of imported vehicles under the Act of 2008 was based on engine capacity and was held not to be violative of Article 25 of the Constitution, and the constitutionality of the provision was upheld, whilst the Hon'ble Supreme Court refused to grant leave to appeal vide its judgment Syed Aizad Hussain's Case (supra).

In State of M.P. v. Rakesh Kohli and another (2013 SCMR 34), Supreme Court of India has enunciated different principles to be taken into consideration while dealing with cases where constitutional validity of a taxation law is challenged. Relevant portion of the judgment is reproduced hereunder:-

"29.While dealing with constitutional validity of a taxation law, Court must consider following principles:

(i)there is always a presumption in favour of constitutionality of a law made by Parliament or a State Legislature;

(ii)no enactment can be struck down by just saying that it is arbitrary or unreasonable or irrational but some constitutional infirmity has to be found;

(iii)court is not concerned with the wisdom or unwisdom, the justice or injustice of the law as the Parliament and State Legislatures are supposed to be alive to the needs of the people whom they represent and they are the best judge of the community by whose suffrage they come into existence;

(iv)hardship is not relevant in pronouncing on the constitutional validity of a fiscal statute;

(v)in the field of taxation, the Legislature enjoys greater latitude for classification."

18.The next argument of the learned counsel for the petitioners is that the power under subsection (9) to exempt any person from the tax by the government and the grievance committee amounts to excessive delegation of power. It is unguided and unstructured, which, in absence of any guidelines and principles, is ex-facie discriminatory and unreasonable. Petitioners placed strong reliance on Shaukat Ali Mian's cases (supra).

We are not impressed by this argument from petitioners' side. In our opinion, Legislature has empowered the competent authority to exempt certain individuals/area from payment of luxury tax. The said provisions of law are in consonance with the mandate of the Constitution, 1973. The case law, relied upon by learned counsel for petitioners, is quite distinguishable in view of facts and circumstances of these cases.

The legislature under Section 8(9) of the PFA, 2014 delegated powers to the Provincial Government, who may exempt any area or any residential house or a person from the whole or any part of the tax charged under this Section. Under clause (b) of subsection (9), even grievance committee can exempt any residential house from payment of the whole or any part of the tax charged, in a case of hardship. A safety valve against the rigors of law has been provided by bestowing powers of exemption to the Government as well as the grievance committee under subsection (9), in addition to the exemptions given in the Second Schedule, and that would be subject to judicial scrutiny before different fora. The provisions relating to exemption powers available in subsections (8) and (9) are reproduced as under:-

"(8)Notwithstanding the provisions of subsection (1), an area, residential house or a person specified in any of the categories mentioned in the Second Schedule shall be exempt from the levy and payment of the tax.

(9) Notwithstanding the provisions of subsections (1) and (8):

(a)the Government may, by notification in the official Gazette, exempt any area within the limits specified in subsection (1), or any residential house or person, from the whole or any part of the tax chargeable under this section, subject to the conditions and limitations specified in the notification; and

(b)the grievance committee may in an individual case of hardship, by special order in each case stating the reasons, exempt any residential house as may be specified from payment of the whole or any part of the tax charged under subsection (1) or from the payment of default surcharge under subsection (7)."

It has been apprised by respondents' side that in pursuance of subsections (11) and (12) of Section 8 of the PFA, 2014 about 300 cases had already been decided in favour of the taxpayers. The relevant provisions read as under:-

"(11) In case of any dispute relating to tax or exemption from the payment of the tax, a person may file an application before the grievance committee and subject to subsection (12), decision of the grievance committee on such dispute shall be final.

(12)Any person or an officer aggrieved by the decision of a grievance committee may, within fifteen days from the date of communication of the decision, prefer an appeal to the Government."

19.The next contention of the petitioners is that "Luxury House Tax" imposed through the impugned legislation i.e. Section 8 of PFA, 2014 does not come within the competence of the Provincial legislature. It is contended that tax in question falls within first portion of Entry No.50 of the Fourth Schedule of the Constitution and thus said enactment was to be passed in terms of procedure contained in Article 70 of the Constitution by the Federal Legislature.

This stance of the petitioners is based on misconception of law. Chapter 1 of Part V of the Constitution deals with distribution of legislative powers between the Federation and the Provinces. For this purpose, Federal Legislative List is available in the Fourth Schedule of the Constitution. It consists of two parts. There are 59 entries in Part I and 18 in Part II. After 18th amendment, in terms of Article 142 of the Constitution, Parliament has exclusive power to make laws with respect to any matter in the Federal Legislative List and also have power to make laws pertaining to such areas in the Federation which are not included in any Province. Whereas, Provincial Assembly has power to make laws in respect to any matter not enumerated in the Federal Legislative List. Entry No. 50 specifically excluded tax on immovable property from the competence of Federal Legislature. The provisions of Article 142 and Entry No.50 of the Federal Legislative List are reproduced below for ready reference.

Article 142 of the Constitution:

"142. Subject-matter of Federal and Provincial laws. Subject to the Constitution-

(a)Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to any matter in the Federal Legislative List;

(b)Majlis-e-Shoora (Parliament) and a Provincial Assembly shall have power to make laws with respect to criminal law, criminal procedure and evidence.

(c)Subject to paragraph (b), a Provincial Assembly shall, and Majlis-e-Shoora (Parliament) shall not, have power to make laws with respect to any matter not enumerated in the Federal Legislative List.

(d)Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to all matters pertaining to such areas in the Federation as are not included in any Province."

Entry No.50 of the Federal Legislative List:

"50.Taxes on the capital value of the assets, not including taxes on immovable property."

20.Article 142 gives Provincial Legislature exclusive powers of legislation on the subjects which are not included in the Federal Legislative List. The language of Entry No.50 of the List gives the Parliament power to levy taxes on the capital value of the assets, and specifically excludes the Parliament to levy taxes on immovable property. It means Provincial Assembly is vested with exclusive power to levy taxes on immovable property. A combined study of Entry No.50 with clause (c) of Article 142 shows that Federal Legislature can tax only capital value of assets. However, a Provincial Legislature is made competent to tax remaining all aspects of immovable property as discussed supra. The tax in question is on residential houses comprising land and superstructure thereon as specified in the First Schedule. Language of Section 8 read with First Schedule of PFA, 2014 does not suggest that capital value of residential houses is being taxed. The argument of learned counsel in this regard is self-contradictory when compared with their argument that properties of different value are being taxed similarly. Later part of Entry No.50 excludes taxation from immovable property from the ambit of Federal Legislature. The use of phrase in clause (c) of Article 142 i.e. "and Majlis-e-Shura/Parliament shall not" puts a clog on Federal legislative power to tax the matters, not enumerated in Federal Legislative List, including immovable property. The clause (c) of Article 142, read with latter portion of Entry No. 50 would show an emphasis regarding exclusion of Parliament's power to tax immoveable property i.e., "not including taxes on immovable property". Since the tax in question is not being charged on value of residential houses, therefore, we have no doubt in our mind that only Provincial Legislature is competent, particularly after the 18th Amendment, to tax the residential houses consisting of more than specified land and superstructure thereon. It is emphasised that subsection (1) of the impugned Section 8 is levying tax on land and superstructure thereon and not the value thereof.

In the case of Ms. Imrana Tiwana (supra), the Hon'ble Supreme Court of Pakistan laid down guidelines/principles, while dealing with cases where constitutional validity of an enactment is challenged, as under:-

(i)There is a presumption in favour of constitutionality and a law must not be declared unconstitutional unless the statute is placed next to the Constitution and no way can be found in reconciling the two;

(ii)Where more than one interpretation is possible, one of which would make the law valid and the other void, the Court must prefer the interpretation which favours validity;

(iii)A statute must never be declared unconstitutional unless its invalidity is beyond reasonable doubt. A reasonable doubt must be resolved in favour of the statute being valid;

(iv)If a case can be decided on other or narrower grounds, the Court will abstain from deciding the constitutional question;

(v)The Court will not decide a larger constitutional question than is necessary for the determination of the case;

(vi)The Court will not declare a statute unconstitutional on the ground that it violates the spirit of the Constitution unless it also violates the letter of the Constitution;

(vii)The Court is not concerned with the wisdom or prudence of the legislation but only with its constitutionality;

(viii) The Court will not strike down statutes on principles of republication or democratic government unless those principles are placed beyond legislative encroachment by the Constitution;

(ix) Mala fide will not be attributed to the Legislature.

It is worth to mention here that the interpretation of any legislative entry in the Constitution itself has to be broad and liberal. A careful appraisal of the definition of "taxation" available in Article 260 of the Constitution manifests that the competence of the Province to tax an immovable property cannot be given restricted meaning. Taxation includes the imposition of any tax or duty, whether general, local or special, which definitely includes the tax in question.

21.It is also the stance of the petitioners that impugned provision of law is confiscatory in nature. We have carefully gone through provision of Section 8 of the PFA, 2014, and are of the view that this argument is also not sustainable. The said provision of law does not contain any confiscatory element. In this respect, it is worth noting, in the first instance, that subsection (4) of Section 8 of the PFA allows for the tax to be paid in instalments. More significantly, the legislature has shown acute awareness of the fact that there may be individual cases of hardship where some persons are unable to pay the tax in lump sum, in which case clause (b) of subsection (9) of Section 8 of the PFA, 2014 empowers the grievance committee to, by special order and with recording of reasons, inter alia, exempt a person from the tax in part or altogether, provided that the case of such person is one of hardship. Be that as it may, the mere fact that a tax or a law imposing a tax leads to inevitable hardships or disadvantages does not in itself constitute a violation of fundamental rights, and cannot, therefore, be struck down on this ground. Reference can be made to Messrs Elahi Cotton Mills' Case (supra), Call Tell and another, (supra), State of M. P. v. Rakesh Kohli and another (2013 SCMR 34) and Sohail Jute Mills' case (supra).

22.The petitioners maintain that the impugned tax under the PFA, 2014, and the property tax charged under the Act of 1958 collectively amount to double taxation. This view is erroneous because the two levies are charged neither for the same purpose nor on the same basis, therefore, tax sought to be imposed by the impugned provision cannot be termed "double taxation". There is marked distinction in both the levies; as observed ibid, the impugned tax is a one-time levy on the land and superstructure, whereas property tax under subsection (2) of Section 3 of the Act of 1958 is levied, charged and paid on annual value of buildings and lands in the rating areas. Reference can be made to Pakistan Industrial Development Corporation v. Pakistan through the Secretary, Ministry of Finance (1992 SCMR 891 at p. 910), Habib Jute Mills Ltd. v. Province of Sindh through Secretary, Finance Department Sindh Secretariat, Karachi and another (2012 PTD 901 at pp. 910-911) and Allied Bank Ltd. v. District Officer (Revenue) and others (PLD 2011 Lahore 402 at pp.410- 411).

Without prejudice to the above legal position, as enunciated by the Hon'ble Supreme Court, double taxation can indeed be imposed "by clear and specific language to that effect" as held in Pakistan Industrial Development Corporation's case (supra) followed in Federation of Pakistan through Secretary M/o Petroleum and Natural Resources and another v. Durrani Ceramics and others (2014 SCMR 1630), and that there is, therefore, no room for arguing that a law can be struck down if it imposes "double taxation". Language of subsection (2) of the impugned Section 8 of the PFA, 2014, clearly shows the intention of Legislature that the tax in question "shall be charged, levied, assessed and paid in addition to any other tax charged and collected under any other law for the time being in force and shall be the first charge upon the residential house" (emphasis added).

On double taxation, the case law cited as Zulfikar Ali Bhutto's case (supra) and Ms. Imrana Tiwana 's case (supra) reflect that previous legislation does not bind or restrict/estop from future legislation. Paragraph No.42 from judgment in Ms. Imrana Tiwana's case (supra) is reproduced hereunder:-

"42.It is well settled that the legislature of today cannot enact a law or pass a resolution, which binds a successor legislature. Such a commitment made either through a resolution or legislation, whereby the powers of a future legislature to amend a law are abridged will not bind a successor Legislature or even the same Legislature. This is black letter constitutional law. If any authority is required for this it can be found in Re: Special Reference under Article 187 of the Interim Constitution of the Islamic Republic of Pakistan by President Zulfikar Ali Bhutto; PLD 1973 SC 563 at 576 J.)"

23.The petitioners have also challenged application of the impugned provision with retrospective effect. It is well-settled that Legislature is fully competent to pass legislation with retrospective effect, even to the extent of taking away a vested right. Reference is made to Messrs Haider Automobile Ltd. v. Pakistan (PLD 1969 SC 623 at p. 641), Molasses Trading and Export (Pvt.) Limited v. Federation of Pakistan and others (1993 SCMR 1905 at p.1923), Lt. Gen. (Retd.) Jamshaid Gulzar and another v. Federation of Pakistan and others (2014 SCMR 1504 at pp.1523-1524) and Irshad Ahmed Sheikh v. National Accountability Bureau and others (2015 SCMR 588 at p.595). The only condition for the retrospective application of legislation is that the language used by the legislature must show such application to have been intended. Such language is quite evident in Section 8 of the PFA, 2014 as a whole, as well as Second Schedule thereto, which excludes residential houses constructed before January, 2001 from levy of said tax. In the case of Amanat Khan (supra) identical submissions were made to challenge the validity of section 7 of the Act of 1997, and this Court repelled the same with the observation that the legislature had the power to legislate retrospectively even to take away a vested right.

24.The questions regarding retrospectivity, double taxation, reasonable classification and legislative competence were discussed and answered in detail by this Court in Muhammad Murtaza Zaidi's case (supra) and upheld by Hon'ble Supreme Court of Pakistan in Aizad Hussain's case (supra). Both the High Court and august Supreme Court did not find substance in any of the grounds vis- -vis (i) Retrospectivity: This was held not to be a valid ground since the legislature had used express language to show that it intended to impose the tax retrospectively, which it was competent to do; (ii) Double Taxation: This ground was also remained unsuccessful because petitioners' side failed to cite any law which prohibited a subject/object from being made liable to pay tax more than once; (iii) Reasonable Classification: It was held that capacity criterion in this behalf constitutes a class itself, which was not shown to be based on any irrational criteria, rather enjoyment of the vehicles having a bigger engine force were the subject/object of the tax, which was rationally founded; (iv) Legislative Competence: It was the argument that the tax in question was in the nature of "capacity tax", and thus the imposition was within the exclusive competence of the Parliament. This argument was not appreciated. It was held that said tax could neither be termed as tax on production, appearing in Entry No.52, nor it was an excise duty, therefore, no question of legislative competence of the Provincial legislature was made out.

25.There is no cavil with the proposition of law as propounded by learned counsel for respondents that Courts are to save the law to the maximum extent, however, there are certain exceptions:

(i)A provision of law can be declared as ultra-vires, if it offends fundamental rights guaranteed under the Constitution.

(ii)If a taxation provision is ex-proprietary and confiscatory in nature.

(iii)The observation of Hon'ble apex Court in case Engineer Iqbal Zafar Jhagra's Case (supra), whereby levy of sales tax was struck down for having been made in violation of Articles 70 and 77 of the Constitution i.e., it was not passed by the Parliament.

(iv)If provision of law is absurd in nature and cannot work despite effort to harmonize the same. Reference is made to Engineer Iqbal Zafar Jhagra's Case (supra). Relevant paragraph is reproduced hereunder:-

"41.Learned Attorney General for Pakistan on having argued the case at some length advanced two propositions, firstly, that it would be appropriate to read down the provisions of sections 3, 4 and 5 in exercise of the jurisdiction conferred by Article 268(6) of the Constitution, according to which, any court, tribunal or authority required or empowered to enforce an existing law shall, notwithstanding that no adaptations have been made in such law by an Order made under clause (3) or clause (4), construe the law with all such adaptations as are necessary to bring it into accord with the provisions of the Constitution. We ourselves are of the opinion that while examining constitutionality of a statute, a Court must exercise restraint and efforts should be made to save the statute instead of destroying it. Reference may be made to Baz Muhammad Kakar's case, but on having concluded hereinabove that sections 3 and 4 being ultra vires the Constitution and in derogation to Articles 9, 24 and 77 of the Constitution, it is not possible to allow such a law to remain on the statute book. Similarly, section 5 of the Act, 1931 on account of its absurdity and ambiguity, even if it is allowed to remain on the statute book, it would be of no use and purpose for the Government or the executive, therefore, while holding sections 3 and 4 to be ultra vires the Constitution, section 5 too is held to be redundant and the same would also serve no purpose if it is allowed to continue on the statute book. Reference in this behalf too is placed on Baz Muhammad Kakar's case."

(v)A taxing provision legislated with the purpose to give benefit or to penalize the subject instead of collecting revenue is liable to be struck down. Reliance can be placed on Baz Muhammad Kakar 's Case (supra).

(vi)Any legislation which intends to disturb the scheme of the Constitution, including any judgment of Supreme Court determining rights of the citizens, can also be held ultra-vires. Reference can be made to Ziaullah 's Case (supra) and Jamat-i- Islami Pakistan's Case (supra).

26.It is well established that the power to levy taxes is a sine qua non for a State insofar as the same is essential for purposes of generating financial resources, and the utilisation of those resources for welfare of the people at large. The legislature enjoys plenary power to impose taxes within the framework of the Constitution, and this power rests on necessity as it is an essential and inherent attribute of sovereignty belonging as a matter of right to every independent State or Government (reliance is placed on Messrs Elahi Cotton Mills' case (supra) at pp.621-622) and by exercising such powers, mala fide cannot be attributed to the legislature as held in Fauji Foundation and another v. Shamimur Rehman (PLD 1983 SC 457 at pp. 585, 691). Once it has exercised such power within the framework of the Constitution, it cannot be contended by the petitioners that, by levying such tax and exercising such powers, the legislature intends to retain money or benefits which in justice, equity and good conscience belong to the petitioners, in order to bring their case within the parameters of principles of unjust enrichment as held in Sui Northern Gas Pipelines v. Deputy Commissioner Inland Revenue and others (2014 PTD 1939 at pp. 1948-1950). It would be relevant to quote an extract from "Principles of Political Economy" by John Stuart Mill, read out by the learned Additional Advocate General in support of his arguments:

"But a great portion of expenses of the higher and middle classes in most countries.... Is not incurred for the sake of the pleasure afforded by the things on which the money is spent, but from regard to opinion, and an idea that certain expenses are expected from them, as an appendage of station; and I can't but think that expenditure of this sort is a most desirable subject of taxation. If taxation discourages it, some good is done, and if not, no harm; for insofar as taxes are levied on things which are desired and possessed from motives of this description, no body is the worse for them."

27.It is a principle of considerably long standing that the wisdom of the legislature ought not to be questioned by courts, (as held in Fauji Foundation's Case (supra) at p. 686), as long as the impugned law is not violative of the fundamental rights guaranteed by the Constitution. As already submitted above, none of the petitioners' rights in terms of Chapter 1 of Part II of the Constitution are violated by the impugned provision. In such circumstances there can be no force in the argument that the impugned provision is not proportional or that it is irrational, for questions of rationality and proportionality have been legislatively decided in the instant case.

28.In a nut shell, it is now well settled that where validity of a statute or provision thereof, is questioned and there are two interpretations, one which makes the law valid, is to be preferred over the other, which will render it void. The criteria before the Court, for determining the vires of a provision of law, is that the Court must be able to hold beyond any iota of doubt that violation of the Constitutional provisions was so glaring that the legislative provision under challenge could not stand. Without such violation of Constitutional provisions, the law made by the Parliament or a State legislature, cannot be declared bad. Reference, in this regard, is made to State of M.P. v. Rakesh Kohli and another (2013 SCMR 34) and Badshah Gul Wazir v. Government of Khyber Pakhtunkhwa and others (PLD 2014 Peshawar 210).

Motive of the Legislature, in passing a statute or its provision thereof, is beyond any scrutiny of Courts nor can the Courts examine whether the legislature had applied its mind to the provisions of a statute before passing it. Propriety, expediency and necessity of a law are to be determined by the legislative authority and not by the Courts.

Presumption is always in favour of the constitutionality of law, and a law would not be declared unconstitutional, unless the case was so clear as to be free from doubt and that too on the basis of the said two grounds. No enactment or provision thereof can be struck down simply by saying that it is arbitrary and illegal or that the Court thinks that it is unjustified.

29.Needless to observe here that while examining a law, enacted through legislative process provided under the Constitution, power of the Court was limited to examine whether the provision of law was repugnant, inconsistent or in conflict with the provisions of the Constitution, whether legislature had legislative competence as envisaged in the Constitution, and whether the legislation violated or abridged fundamental rights guaranteed by the Constitution.

The provisions of Section 8 of the PFA, 2014 are found intra vires. While interpreting the provision of a statute, the Courts presume that legislation was intended to be intra vires and reasonable as well. The rule followed is that the enactment is interpreted consistent with the presumption, which imputes to the legislature an intention of limiting the direct operation of its enactment to the extent that is permissible. A statute must be interpreted to advance the cause of statute and not to defeat it. Courts cannot sit in judgment over the wisdom of the legislature, except on two grounds on which the law laid down by the legislature can be struck down by the Courts, namely, lack of legislative competence and violation of any of the fundamental rights guaranteed in the Constitution or of any other Constitutional provision.

30.Petitioners, in the present case, have failed to raise any ground which could persuade this Court to exercise its jurisdiction, so as to go into the question of vires of Section 8 of PFA, 2014.

Narrative of petitioners raised questions which essentially relate to wisdom of legislature in enacting the law, which is outside the scope of judicial review. As long as legislature has competence to legislate, grounds or wisdom of legislation remains its exclusive prerogative. Legislature is not debarred from promulgating said provisions of law under the Constitution. Reference can be made to Zaman Cement Company (Pvt.) Ltd. v. Central Board of Revenue and others (2002 SCMR 312), Ardeshir Cowasjee and 11 others v. Sindh Province and others (2004 CLC 1353) and Syed Muhammad Murtaza Zaidi's Case (supra).

31.So far as the argument of learned counsel for petitioners that impugned notices have been issued calling upon petitioners to pay the amount without making any assessment as required in Section 8(1), is concerned, the mandate of Section 8, as is evident from the provision reproduced above, is that the "Luxury House Tax" not only to be charged, levied and paid but also to be assessed.

Admittedly impugned notices are in the form of demand notices, without issuance of Show Cause Notice ("SCN") and passing of assessment orders. It is also not denied that in some of the cases the notices for payment of the tax in question were issued even before promulgation of the Rules of 2014. Explanation offered by learned counsel for the respondents that notices were issued by following procedure under the Act of 1958, in view of subsection (10) of impugned Section 8, is not convincing. Under proviso to Section 9 of the Act of 1958, while making any amendment in Valuation List, a notice, for calling objection, is to be issued in Form P.T.13.

Under Rule 4(b) of the Rules of 2014, assessing authority is required to "determine the tax". Under Rule 3 owner or occupier of the residential house is required to file return in Form LT-1. If in the opinion of assessing authority the filed return is incorrect, incomplete or there is reason to believe that the amount of tax shown is suppressed or evaded etc., he may proceed to determine the tax, after giving an opportunity of being heard.

32.The procedure noted above is admittedly not followed in the cases under our consideration, therefore, the impugned notices are in violation of the Rules of 2014 as well as the provisions of subsection (1) of Section 8 of the PFA, 2014, wherein word "assessed" has specifically been used.

Needless to say that after insertion of Article 10-A in the Constitution, fair trial has become constitutional right of every citizen, besides the settled principle that no one can be condemned unheard. The respondent authorities had violated the fundamental right of due process of law like notice, opportunity of hearing and confronting of evidence collected. In determination of rights, the order passed in respect of a person falling short of due process and fairness of facts, is illegal and unconstitutional. Without fulfilling all the requisite formalities for assessing the liability of petitioners, the impugned notices are not sustainable in the eye of law. Even otherwise, it is well settled proposition of law that taxation authorities cannot demand amount without issuing a SCN, providing an opportunity of hearing and fixing/assessing liability in terms of the relevant provisions of law. Reliance in this regard is placed on Executive Engineer, Qadirabad Barrage Division, Qadirabad and others v. Ejaz Ahmad (2007 SCMR 1860), Habib Bank Limited v. Ghulam Mustafa Khairati (2008 SCMR 1516), Dr. Ashfaq Ahmad Khan v. Deputy Commissioner of Income Tax, Peshawar and others (2012 PTD 1329) and Messrs Bissma Textile Mills v. Federation of Pakistan and others (2002 PTD 2780).

33.In the case of Messrs Bissma Textile Mills supra, it was held that a person cannot be burdened with liability merely on the basis of material with which he has not been confronted. Issuance of SCN is provided for in the Rules itself, therefore, failure to give such notice is fatal and cannot be cured. Since the respondents themselves have failed to comply with the mandatory provisions of relevant law, the impugned notices are liable to be declared illegal and without lawful authority, since the same have been issued in total oblivion of Section 8(1) read with Rule 3 and Article 10-A of the Constitution. Respondent authorities are under legal obligation to provide opportunity of being heard to the assessees before demanding the tax as is evident from provision of Section 8(1) of PFA, 2014. The aforementioned provisions clearly mandate that no order shall be made or decision shall be taken unless the person confronted has been given an opportunity of being heard. The impugned notices issued by respondents are merely demand notices calling the petitioners to make payment. The requirements of law regarding assessment have not been fulfilled. As observed above, it is well settled principle of law that where law required an act to be done in a particular manner, it had to be done in that manner alone and said dictate of law cannot be termed as a technicality. Reliance in this regard can be placed on Muhammad Anwar and others v. Mst. Ilyas Begum and others (PLD 2013 Supreme Court 255).

34.The Hon'ble Supreme Court while discussing the principle of natural justice in Hazara (Hill Tract) Improvement Trust and others v. Mst. Qaisera Elahi and others (2005 SCMR 678) has given the following esteemed findings which highlight the importance of hearing within the contemplation of Islamic System of Justice:-

"This principle originates from Islamic System of Justice as evident from historical episode when "Iblees was scolded for having misled Hazrat Adam (P.B.U.H.) into disobedience or Allah's command. Almighty Allah called upon Iblees to explain his conduct and after having an explanation from him which was found untenable, he was condemned and punished for all times to come". Thus, it is held that the principle of natural justice has to be applied in all kinds of proceedings strictly and departure there form would render subsequent actions illegal in the eye of law."

35.Even if impugned demand notices are treated as orders which are adverse in nature, the same cannot be passed at the back of the petitioners/affected persons without affording an opportunity of hearing. Such an order is to be treated as void order having no recognition in the eye of law. Court is also under legal duty to wipe out effects of such void order and relegate the parties to a position which they occupied before it was passed. Reference in this regard can be made to Nazir Ahmad Panhwar v. Government of Sindh through Chief Secretary, Sindh (2005 SCMR 1814), Evacuee Trust Property Board v. Sheikh Abdul Sattar and another (2009 SCMR 1223), Muhammad Maqsood v. Kausar Nisar (2000 YLR 1698), and Muhammad Irfan v. Tariq Mehmood (2011 CLC 1610).

36.It is well settled that all statutory authorities or bodies derive their powers from statutes which created them and from the rules and regulations framed thereunder. Any action taken or exercise of powers by a statutory authority or body, which is in derogation of the statute/ rules, can be assailed and declared as ultra vires. In the instant case, no assessment has been carried out in terms of Section 8(1) of the PFA, 2014, reproduced above. Thus, the impugned notices are declared to have been issued without lawful authority.

However, the respondents are at liberty to issue fresh notices in conformity with the provisions of Section 8 read with Rules, 2014 and Article 10-A of the Constitution and determine the Luxury House Tax liability of the petitioner after providing an opportunity of hearing to all concerned strictly in accordance with law.

37.Lastly, challenge to the Rules of 2014 also needs consideration. Learned Counsel for respondents was confronted to reconcile the provisions of subsection (13) and subsection (10) of Section 8, which appear to be in conflict. Both the subsections are reproduced here-under:--

"(10) Subject to the provisions of this section, the tax including surcharge payable under subsection (7) shall, as nearly as possible, be paid, recovered, administered and regulated as if it is a tax under the Punjab Urban Immoveable Property Tax Act, 1958 (V of 1958)."

"(13) The Government may make rules for carrying out the purposes and giving effect to the provisions of this section."

Subsection (10) says that tax payable under Section 8 shall be paid, recovered, administered and regulated as if it is a tax under the Act of 1958. However, this authority has been qualified with the phrase "as nearly as possible". On the other hand, subsection (13) gives power to the Government to make rules for carrying out the purposes and giving effect to Section 8. The Rules of 2014, framed under subsection (13), have given a mechanism of charging and collecting the tax.

We found ourselves in agreement with the argument by learned counsel for the respondents that the use of phrase "as nearly as possible" has rendered the provisions of subsection (10) as directory, which shall come into operation when machinery provisions under the section 8 or the Rules made thereunder do not cater for a situation or eventuality. For instance, 'assessing authority' has not been defined in the Section 8 or the Rules of 2014, however, it is defined in Rule 3 of the Rules of 1958 read with section 6 of the Act of 1958. Under the circumstances, subsection (10) comes to rescue the apparent lacuna, wherein word "administered" has been used for collection of the payable tax. Conversely, where explicit procedure has been provided under Section 8 or the Rules of 2014, the procedure given under the Act of 1958 and Rules of 1958 shall remain silent.

Furthermore, nothing has been stipulated as consequence or penalty for non-compliance with the provision. In case law cited as Niaz Muhammad v. Mian Fazal Raqib (PLD 1974 SC 134), Hon'ble Supreme Court of Pakistan held as under:--

"It is the duty of the Courts to try to get at the real intention of the Legislature, by carefully attending to the whole scope of the statute to be construed. As a general rule, however, a statute is understood to be directory when it contains matter merely of direction, but not when those directions are followed up by an express provision that, in default of following them, the acts shall be null and void. To put it differently, if the Act is directory, its disobedience does not entail any invalidity; if the Act is mandatory disobedience entails serious legal consequences amounting to the invalidity of the act done in disobedience to the provision."

In another case Suo Motu Action taken on news clippings regarding Fast Food outlet in F-9 Park Islamabad (PLD 2010 SC 759), Hon'ble Supreme Court observed as under:

"On the other hand, where the prescriptions of a statute relate to the performance of a public duty and where the invalidation of acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty without promoting the essential aims of the legislature, such prescriptions seem to be generally understood as mere instructions for the guidance and Government of those on whom the duty is imposed, or, in other words, as directory only. The neglect of them may be penal, indeed but it does not affect the validity of the act done in disregard of them. It has often been held, for instance when an Act ordered a thing to be done by a public body or public officers and pointed out the specific time when it was to be done, that the Act was directory only and might be complied with after the prescribed time."

Phrases such as "as nearly as possible", as well as its variants, e.g. "as far as possible", have been interpreted as not being prohibitory in nature, rather they connote discretion. The phrase "as nearly as possible" was interpreted by a learned Division Bench of this Court in case of Mian Farooq Ahmed Sheikh (supra), wherein whilst interpreting Section 29 of the Privatization Commission Ordinance, 2000, which required the High Court to follow the procedure "as nearly as possible" as provided in the Code of Civil Procedure, 1908 ("C.P.C."), it was observed that the said phrase did not make the C.P.C. itself applicable.

In case of Iridium India Telecom Ltd. (supra), it was held that the proviso to clause 37 of the Letters Patent, the purport of which was that the rules framed under that clause should "as far as possible" be in conformity with the provisions of the C.P.C., was merely a directory provision. On phrase "as far as possible" used in Section 8(10) reference has also been made to the following paragraph of the said judgment, which is reproduced hereunder:--

"41.Learned counsel for the appellant next contends that even clause 37 of the Letters Patent establishing the High Court of Bombay, which empowers the High Court to make rules and orders on its Original Side, is subject to the proviso "that the said High Court shall be guided in making such rules and orders as far as possible by the provisions of the Code of Civil Procedure..." He contends that the words "as far as possible" are words of limitation and must be interpreted to mean that the rules made should be consistent with the provisions of the C.P.C. as amended from time to time."

Likewise, in case of High Court of Judicature for Rajasthan v. Veena Verma (AIR 2009 SC 2938), it was held that the use of the phrase "as far as possible" in Rule 9(2) of the Rajasthan Higher Judicial Service Rules, conferred discretion on authorities and that the same was, therefore, not a hard and fast rule.

Reference has been made to Atta Muhammad Qureshi's case (supra) with assertion that language of the provision itself is important to determine its mandatory or directory character. The language of subsection (10) of section 8 of PFA, 2014 is not couched in negative without any consequence, therefore, it is directory in nature.

In support of the interpretation of Phrase "as far as possible", the relevant portion of the judgment in Narmada Bachao Andolan's case (supra) is reproduced hereunder:-

"38.The aforesaid phrase provides for flexibility, clothing the authority concerned with powers to meet special situations where the normal process of resolution cannot flow smoothly. The aforesaid phrase can be interpreted as not being prohibitory in nature. The said words rather connote a discretion vested in the prescribed authority. It is thus discretion and not compulsion. There is no hard-and-fast rule in this regard as these words give a discretion to the authority concerned. Once the authority exercises its discretion, the court should not interfere with the said discretion/decision unless it is found to be palpably arbitrary. (Vide Iridium India Telecom Ltd. v. Motorola Inc. and High Court of Judicature for Rajasthan v. Veena Verma.) Thus, it is evident that this phrase simply means that the principles are to be observed unless it is not possible to follow the same in the particular circumstances of a case."

On phrase "as nearly as possible" the judgment in R.C. Poundyal's Case (supra) has been relied upon, which is reproduced hereunder:--

"187. In clause (3) of Article 332, the words "as nearly as may be" have been used. These words indicate that even in the matter of reservation of seats for Scheduled Castes and Scheduled Tribes it would be permissible to have deviation to some extent from the requirement that number of seats reserved for Scheduled Castes or the Scheduled Tribes in the Legislative Assembly of any State shall bear the same proportion to the total number of seats as the population of the Scheduled Castes or the Scheduled Tribes in the state in respect of which seats are so reserved, bears to the total population of the State. The non-obstante clause in Article 371-F read with clause (f) of the said Article enlarges the field of deviation in the matter of reservation of seats from the proportion laid down in Article 332(3). The only limitation on such deviation is that it must not be to such an extent as to result in tilting the balance in favour of the Scheduled Castes or the Scheduled Tribes for whom the seats are reserved and thereby convert a minority into majority. This would adversely affect the democratic functioning of the legislature in the State which is the core of representative Democracy. Clause (a) of sub-section (1-A) of Section 7 of the 1950 Act provides for reservation of twelve seats in an Assembly having thirty two seats, i.e., to the extent of about 38 per cent seats for Sikkimese of Bhutia-Lepcha origin. The said provision does not, therefore, transgress the limits of the power conferred on Parliament under Article 371-F(f) and it cannot be said that it suffers from the vice of unconstitutionality."

The Phrase "as nearly as possible" does not require that the procedure provided under the Act of 1958 or Rules made thereunder, shall be applicable for levying Luxury Tax in question. In support, reference has been made to Mian Farooq Ahmed Sheikh's Case (supra), which is reproduced hereunder:-

"24.At this point we would like to say a few words about the procedure which we have adopted in deciding this appeal. Section 29 of the Privatization Commission Ordinance, 2000 requires the High Court to "follow the procedure, as nearly as possible as provided in the Code of Civil Procedure". It is important to bear in mind that the C.P.C itself is not made applicable to suits filed under the Privatization Commission Ordinance. Where the relevant facts are not in dispute, as in the present case, the Court merely has to apply the law to such facts and renders its decision. There is no need, in such case, to call for evidence and to embark on a regular trial. Even the C.P.C. envisages decision of cases on preliminary issues without a full trial. The departure from the C.P.C. to the extent that no issues (whether preliminary or otherwise) were framed by the learned Single Bench in this case, is of no consequence because the point in contention between the parties stood crystallized before us and has been encapsulated in the questions framed above. Had we come to the conclusion that the Supreme Court judgment permitted an adjustment in the Calicon bid of Rs.127 per share, it might have been possible to consider the argument advanced on behalf of the appellants that a regular trial in the case was necessary to determine the extent of the adjustment. We may add thought, that even on the question of adjustment of the bid price, we cannot find fault with the reasoning of the learned Single Bench."

38.Needless to observe here that Rules of 2014 made in pursuance of delegated authority have not been shown to be inconsistent with the statute under which they were made, therefore, the same cannot be regarded as ultra vires the statute as argued by learned counsel for petitioners. Impugned Rules are consistent with the statute under which they are made. The Rules do not contradict the express provision of the statute in any manner whatsoever from which they derive their authority. In view of the above reasoning, the objection as to vires of Rules of 2014 is repelled being devoid of force.

39.For the reasons noted above, this and connected petitions to the extent of vires of Section 8 of the Punjab Finance Act, 2014, Punjab Luxury House Tax Rules, 2014 and competence of the Provincial Legislature are dismissed.

However, the petitions are allowed to the extent of impugned notices, which are declared to have been issued in violation of the provisions of Section 8 and Rules made thereunder.

The respondents may issue fresh notices keeping in view the observations/directions given in this judgment and in accordance with the Section 8 and Rules made under it. Petitioners shall also be at liberty to re-agitate the grounds not attended in this judgment, if felt necessary, after issuance of fresh notices.

Schedule - A

("Number of Writ Petitions and name of counsel" (pp.1 - 13) not reported)

MH/M-206/L Order accordingly