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Writ Petition No. 94 of 1978, decided on 20^thDecember, 1979.

-- S. 7-Words and phrases-Words Tax' and Cess'-Not distinct Word 'Cess' being defined as a tax levied for a specific object and tax in legal parlance being nothing more than money individuals compelled to pay for public purposes, hence impossible to distinguish between tax' and cess'.-[Words and phrases].

----S. 7-Tax, levy of-Interpretation of statutes- Vires of legislation Substance and not language of enactment to be taken into considera tion for determining validity of enactment-Tax, held, may be given any name whatsoever (development cess in instant case) but remains a tax, involving as it does recovery of money from subjects of state. [Interpretation of statutes].

In re: Muniyandi A I R 1954 Mad. 196 ref.

-- S. 7 read with Federal Legislative List, Item 49 read with Item 59 Vires of legislation-Levy of development cess-Levy of tax on manufacture of marble chips from marble stones-Falls under Item 49 read with Item 59 of Federal List-Provincial Legislature, held, could not transgress into' such field and levy of development cess on manufacture of marble chips accordingly ultra vires powers of Provincial Legislature.-[Vires of legislation].

Zahurul Haq, Bar-at-Law for Petitioner.

Inayat Elahi Khan, A.-G. for Respondents.

Date of hearing: 18^thDecember, 1979.

.-In this petition under Article 199 of the constitution the vires of section 7 of the North-West Frontier Province Finance (Act X of 1977) is in question. The said section with-explanation reads as follows:-

"Development cess on marble chips.-With effect from Ist day of July, 1977, there shall be levied and collected, from every marble chips manufacturing factory, a development cess at the rate of five rupees per top of marble chips produced by such factory.

Explanation.-In this section, "marble manufacturing factory" means any premises, including the precincts thereof, wherein or in any part of which the process of manufacture of marble chips or any process incidental or ancillary to the completion of marble chips, is being carried on or is ordinarily carried on and includes any warehouse or place of such factory where marble chips are kept or stored for sale."

2. The petitioners claim that they manufacture marble chips from marble stones and have installed crushing machines for that purpose. According to them the revenue authorities on the strength of the aforesaid enactment have issued notices to them to appear with complete details of the businesses so that the cess imposed under the above provisions may be assessed. The petitioner's case is that section 7 is ultra vires the Provincial Legislature and consequently the levy of 'development cess is illegal and that the petitioners are not liable to pay any cess thereunder. The petitioners further seek the issuance of a direction to the respondents not to levy the said cess on them.

3. We have heard the learned counsel appearing for the petitioners as also the learned Advocate-General on the specific issue raised in this petition. Part I of the Fourth Schedule to the Constitution enumerates the different items in the Federal Legislative List." It is not disputed that it is the Parliament, which has legislative authority to pass laws in respect of any item falling under that part of the said List. It is further not disputed that if any item falls under the said List of the said part the Provincial Legislature shall have no power to legislate on any of the items mentioned therein. Item 49 of Part-I of the said List is as follows:

"49. Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed."

The wording of Item 49 are clear enough to indicate that "taxes on the sales and purchases of goods manufactured" can be imposed only by the Parliament and the 'Provincial Legislature has no power to do so. The learned Advocate-General has, however, contended that Item 49 refers to "taxes and not to "cess" and, therefore, since the Provincial Legislature has imposed a cess on the manufacture of chips, the levy does not fall under the said item. The argument, on the face of it, is misconceived inasmuch as there is no difference between a "cess" and "tax". The word "cess" has been defined in different dictionaries as a tax levied for a specific object. Tax in legal parlance is nothing more than money, which individuals are compelled to pay for public purposes and it is, therefore, impossible to distinguish between a "tax" or "cess". It has been held in A I R 1954 Mad. 196 that a cess is the tax levied for specific purposes and is not a licence for a permission to trade subject to compliance with certain conditions. The learned Advocate-General then contended that the cess levied by the Provincial Legislature is not merely a cess but a development cess which is levied for a specific purpose of developing the industries and therefore, it is not covered under any item of the Federal List to the Constitution and falls within the residuary power of the Provincial Legislature. In this contention also find no substance. It is not the language of the enactment which has to be taken into consideration but it is the substance thereof, which determines it validity. The tax may be given any name whatsoever but it remains a tax; for it involves the recovery of money from the subjects of the State. It is pertinent to note that there: exists federal statute also namely, Sales Tax Act (III of 1951), which in section 3 provides for the levy of tax on all goods manufactured in Pakistan. No doubt the said Act provides for the levy of the tax on the sale-price of the manufactured goods whereas section 7 of the North-West Frontier Province Finance Act (Act X of 1977), levies the tax-on the quantum of the manufactured goods, but this distinction does not make any difference inasmuch as the purpose remains the same, namely, the levy of tax on the manufacture of goods.

4. In our opinion since the levy of tax on the manufacture of marble chips from marble stones falls under Item 49 read with Item 59 of the Federal List to the Constitution, the Provincial Legislature had no power to transgress in that field and the levy of development cess on the manufacture of marble chips is ultra vires the powers of the provincial legislature. We, therefore, declare the said section 7 as such and direct the respondents not to recover the so-called development cess from the petitioners. The petition is accepted but the parties, in view of the peculiar circumstances of the case, are left to bear their own costs.

M. Y. M.

Petition accepted.

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