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Writ Petition No. 2179 of 1979, decided on 22nd December 1980.

Punjab Finance Ordinance (XIII of 1978)--

S. 6 read with Constitution of Pakistan (1973), Arts. 1(2), 141, 142, 268(1) & 270(4), Province of West Pakistan (Dissolution) Order [P. O. 1 of 1970], Arts. 3(6), 6 & 20(1)(6) and Islamabad Capital Territory (Administration) Order (P. O. 12 of 1971), Arts. 2 & 3-Hotel Tax-Imposition of, in capital territory of Islamabad-Islamabad Capital Territory-Not a part of Province of Punjab-Provincial Legislature not competent to legislate about such territory-Parliament possessing exclusive power to make laws with respect to matters not enumerated in either list for areas not included in any Province and no tax being leviable except by authority of Act of Parliament, and President/Chief Martial Law Administrator not shown to have imposed any tax by any enactment on hotels in Islamabad, question of its administration or collection by Provincial Government, held, did not arise and Punjab Finance Ordinance, 1978 meant only for Punjab and not applicable to Islamabad Capital territory.-[Legislation-Interpretation of statutes].

Regular Second Appeal No. 238 of 1974 (unreported) ref.

Muhammad Zaman for Petitioner.

Sh. Muhammad Shafi for A.-G. for Respondents.

Date of hearing : 25th Novembers 1980.

This order shall also dispose of another Writ Petition No. 10583/80, between the same parties and involving the same question of law. The petitioner, who is a public limited Company, is the owner of the Hotel Holiday Inn at Islamabad. The hotel has 147 rooms on 5 floors, but the occupancy averages at 70

2. On 29th January 1979, respondent No. 2 issued a notice to the petitioner to file a return for the purpose of levy of hotel tax under section 6 of the Punjab Finance Ordinance, 1978. The petitioner objected to it vide letter dated 6th February 1979, on the ground that the provincial tax could not be imposed on the said hotel situate in the Federal area. Respon dent No. 2 gave his reasons not to accept the petitioner's contention and persisted in his demand. Further notices were, therefore, issued on 11th February and 22nd February 1979.

3. As the petitioner did not respond to the abovesaid notices, respondent No. 3 issued a demand notice in the sum of Rs. 2,46,600 as hotel tax, for the period from July 1978 to March 1979. He fixed 19th April 1979, as the last date for payment. The learned counsel has challenged the said demand and the notices through the present writ petitions.

4. It is contended that the Punjab Finance Ordinance, 1978, being a provincial law could be applied to the areas comprised only in a province but not for areas outside that. Reference is made to Article 1(2) of the Constitution wherein Islamabad Capital territory is specified as distinct and separate from the Province of Punjab. Reference is also made to Articles 141 and 137 of the Constitution to say that a Provincial Assembly may make laws for a province or any part thereof. Article 142(d) of the Constitution was also cited to say that the Parliament has the exclusive power to make laws for such areas in the Federation as are not included in any province.

5. The respondent did not controvert the above pleas but relied on President's Order 12 of 1971, read with Article 270(4) of the Constitution to justify his action. The contention of the learned counsel for the petitioner is that Article 2 of the President's Order12 of 1971, relates only to the administrative powers and functions and does not enable the Provincial Government to legislate for Islamabad Capital territory. Further, that it does not extend application of any provincial law imposing a tax to it.

6. The learned counsel for the respondents relies on paras. 4 and 5 of President's Order 1 of 1970, to show how the new provinces were created after the dissolution of West Pakistan and states that the Punjab Government could exercise all powers and functions as were exerciseable by the Government of West Pakistan. He also seeks support from a judgment of this Court in R. S. A. 238/74 decided on 16th March 1977, wherein all the points being raised on behalf of the petitioner were considered and decided. Articles 260 and 279 of the Constitution were also referred to.

7. Article 1 of the 1962 Constitution laid down that the Islamic Republic of Pakistan shall consist of-

"(i) Province of East Pakistan ;

(ii) Province of West Pakistan, and

(iii) Such States and territories as are or may become included in Pakistan whether by accession or otherwise."

Article 134(4) provided that the Central Legislature shall have power to make laws with respect to any matter for Islamabad Capital Territory. This was not an exclusive power. The result is that though the Islamabad Capital Territory was a part of the territory of West Pakistan yet the Central Government also had the power to legislate. The executive authority of the Republic also extended under Article 135(b) to administering such a law as made under Article 132(4).

8. Article 143 further provided that the President may entrust, with the consent of the Provincial Government to any officer or authority functions in relation to any matter to which the executive authority of the Republic extends. The same thing could also be done under an Act of the Central Legislation without the consent of the Provincial Government.

9. The Province of West Pakistan (Dissolution) Order, 1970 (P. O. 1 of 1970) had been promulgated on 30th March 19711, by the President and the Chief Martial Law Administrator in pursuance to the proclamation of 25th March 1969, and all other powers enjoyed by him. Article 2 provided that it overrided all other laws in force. Article 3(b) defined Islamabad Capital Territory' as the Centrally Administered Area which is shown in the Schedule as the Islamabad Capital Territory. Article 4 shows that the Province of West Pakistan was split into four provinces and the following centrally administered territories :-

(a) Islamabad Capital Territory ;

(b) Centrally Administered Tribal Areas.

Article 5 provided for the administration of the Provinces and the Centrally Administered Areas. In Article 6, the President was given exclusive power to make laws with respect to all matters concerning Pakistan Western Railway and the Islamabad Capital Territory. It reads as follows :-

"6.-(1) The President shall have exclusive power-

(a)

(b) In relation to the Islamabad Capital Territory, to make laws with respect to all matters."

Article 20(1)(6) further provided that :-_

"20.-(l) The President may, by order, make such provisions as may appear to him to be necessary or expedient for-

(a)

(b) The government and administration of the Islamabad Capital Territory, including extension thereto of the jurisdiction of any Court in. a new Province ;

(C),. . . . . . . . . . . .

10. On 22nd October 1971, the President in exercise of his power under Article 20 of the President's Order No. 1 of 1970, mentioned above, enforced Islamabad Capital Territory (Administration) Order, 1971 (P. O. 12 of 1971). Its Article 2, which is relevant, reads as under :-

"2.-(1) Until other provision is made in this behalf, the Government of the Punjab, shall on behalf of the President, exercise and perform in relation to the Islamabad Capital Territory the same powers and functions as were exerciseable in relation to that territory by the Government of West Pakistan immediately before the first day of July 1970.

(2) . ..

Article 3 of P. O. 12 of 1971, also validated with retrospective effect any power and function referred to in Article 2 above, exercised by the Govern ment of Punjab in relation to the Islamabad Capital Territory before the promulgation of that Order.

11. A comparison of Article 6 with Article 20, both reproduced above, would show that whereas the former concerns the legislative power, which is conferred on the Parliament, the latter vests executive power, governmental and administrative, on the President. It is that power which the President by Order conferred under Article 2 of P. O. 12 of 1971, on the Government of Punjab.

12. Thus since 30th March 1970, the President of Pakistan had the exclusive power to legislate in relation to all matters concerning Islamabad Capital Territory (Article 6 of P. O. 1 of 1970). On 22nd October 1971, the President by a legislative Act (P. O. 12 of 1971) conferred on the Government of Punjab the same powers which were being exercised by the erstwhile Government of West Pakistan. The fact that it was conferment of an administrative and not legislative power is proved from the very source of power (Article 20 of P. O. 12 of 1970), as well as the mention of Government of Punjab as against the Governor. It will have to be noted that the country was still under Martial Law. The fact, however, is that no law imposing any tax on hotels in the Islamabad Capital Territory was made at any time by any of the two Legislatures till 1978. The scope of this power may further be seen in the light of the subsequent constitutional developments.

13. In this factual, legal and constitutional situation Article 280 of the Interim Constitution of 1972 and Article 268(1) of 1973 Constitution continu ing in force all existing laws including Article 2 of the President's Order 12 of 1971, would have made no difference whatever. What is here being sought for is the existance of any legislation imposing hotel tax in the Federal Area. The conferment of the executive power on Provincial Government under Article 2 of P. O. 12 of 1971, could have been useful only if there was a legislation or a legislative power vesting in the authority in Provincial Legislature itself to oblige the petitioner to pay the tax in question. The short question thus arising for determination is, could the Provincial Government by virtue of section 6 of the Punjab Finance Ordinance, 1978, require of the petitioner to pay hotel tax for an hotel situate in Islamabad Capital Territory

14. According to the 1973 Constitution, the Islamabad Capital Territory is not a part of the Province of Punjab. The Provincial Legislature, therefore, cannot legislate about it in view of Article 141. The Parliament, on the other hand, has the exclusive power under Article 142(d to make laws with respect to matters not enumerated in either lists for such areas in the Federation as are not included in any Province. Article 77 lays down that no tax shall be levied except by or under the authority of Act of Parliament.