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Present: Muhammad Haleem, C.J., Nasim Hasan Shah, Shafiur Rahman and Zaffar Hussain Mirza, JJ

Civil Appeals Nos. K‑44, K‑45, K‑46, K‑47, K‑48 and K‑49 of 1983, decided on 9th January, 1986.

(On appeal from the judgment dated 12‑7‑1982 of the Sind High Court at Karachi in Constitutional Petitions Nos. D‑892/81, D‑1655/79, D‑1287/79, D‑893/81, D‑1680/79 and D‑2187/81).

(a) Constitution of Pakistan (1973)‑‑

‑‑‑Art. 185(3)‑‑West Pakistan Urban Immovable Property Tax Act (V of 1958), S. 8‑A,‑‑Immovable property tax‑‑Valuation of property made on basis of new formula‑‑Petitioners claiming that they were not liable to pay tax according to new valuation‑‑Leave to appeal granted to consider inter alia whether valuation lists validated by Sind Finance Act, 1977, were applicable to case of petitioners' Mills situated in Landhi area.

(b) West Pakistan Urban Immovable Property Tax Act (V of 1958)‑‑

‑‑‑S. 3(i) & 8‑A‑‑Immovable property tax‑‑Revised valuation of property made on basis of new formula‑‑Validating amendment being applicable only within Karachi rating area‑‑Appellants claiming that their properties being outside prescribed area, they were not liable to pay tax according to new valuation‑‑Respondent having admitted that properties of appellants were all situate at Landhi or in Sind Industrial Trading Estate, they were liable to be assessed according to old valuation‑ Appeals allowed with costs.

Khalid M. Ishaque, Advocate Supreme Court with Nizam Ahmad, Advocate‑on‑Record for the Appellants (in all Appeals).

Sayeed A. Shaikh, Advocate‑General Sind with Muzaffar Hassan, Advocate‑on‑Record for Respondents (in all Appeals).

Date of hearing: 9th January, 1986.

‑This judgment will dispose of the above‑mentioned six appeals which have been heard together and arise out of a common judgment delivered by a Division Bench of the High Court of Sind.

2. The following statement of facts will suffice for the order we propose to make in these cases. The appellant‑Companies are situate either at Landhi or in the Sind Industrial Trading/Estate (Site). They, along with some other Companies, situate in Karachi Rating Area, were assessed at property tax under the provisions of the Urban Immovable Property Tax Act, 1958 (hereinafter referred to as the Act) and the Rules framed under the Act (hereinafter referred to as the 'Rules' sometimes in 1976. It may be mentioned that urban properties for the purposes of the Act were valued in accordance with Section 5 which reads as under:‑

"The annual value of any land or building shall be ascertained by estimating the gross annual rent at which such land or building together with its appurtenances and any furniture that may be let for use or enjoyment with such building might reasonably be expected to be let from year to year, less‑‑

(a) any allowance not exceeding twenty per centum of the gross annual rent as the assessing authority in each particular case may consider reasonable rent for the furniture let with any such building;

(b) an allowance of ten per centum for the cost of repairs and for all other expenses necessary to maintain such building in a state to command such gross rent. Such deduction shall be calculated, on the balance of the gross annual rent after the deduction, if any under clause (a); and

(c) any land revenue actually paid in respect of such building or land;

Provided that in calculating the annual value of any building or land under this section the value of any machinery in such building or on such land shall be excluded."

3. On 26‑10‑1976 a public notice was caused to be issued by the Director Excise and Taxation Department, Karachi (Respondent No.3 herein) in the Daily 'Dawn' requiring the Industrial Property owners, occupants and lessees to file the Declaration Forms as a survey was being carried out by the Excise and T2xation Department, Government of Sind to assess all the industrial or industrial‑cum‑commercial‑cum residential properties situated in the rating areas of Karachi under the Sind Urban Immovable Property Tax Act, 1958. Consequently, the appellants filed the requisite declarations, as desired in the Declaration Forms mentioned in the said notice.

4. On or about 1‑12‑1976, respondent No.2 prepared a draft valuation list and invited objections from the property owners with respect to the valuation of their property which was made on the basis of a "new" formula. The appellants filed objections under section 8 (ii) of the Act read with Rules 8 of the Rules before the Assessing Authority. No personal hearing was granted to the appellants and instead a cyclostyled letter was addressed by the respondent

No.2 to them informing them that the objections filed by the Chamber of Commerce and Industries were treated as objections filed on their behalf and that the respondent had, after considering the said objections, assessed the value of the properties as follows:‑

Serial Appellant Original value Enhanced value

No.

(a) Adamjee Industires Limited. Rs.8,35,308 Rs.15,52,784

(2) Gul Ahmad Textile Mills Limited. Rs.2,75,400 Rs.10,74,101

(3) Globe Textile Mils Limited. Rs.2,01,609 Rs. 8,37,506

(4) Hussain Industries Limited. Rs.4,07,890 Rs.11,31,452

(5) Star Textile Mills Limited. Rs.3,24,990 Rs. 9,43,760

(6) Dawood Cotton Mills Limited. Rs.7,38,589 Rs.21,41,951

5. The appellants filed appeals against the orders, whereby the value of their properties was so drastically enhanced, before respondent No.2 but these appeals were not heard for a considerable period of time. In the meantime, section 8‑A was added to the Sind Urban Immoveable Property Act vide Sind Finance Act, 1977. This provision was in the following terms:‑.

"8‑A. Valuation.‑‑Notwithstanding anything contained in this Act the valuation list which has been prepared in respect of the properties used wholly or partly for industrial purposes and situated within the limits of Karachi Rating Area and has been enforced from the Ist day of January, 1977 shall be deemed to have been validly prepared and enforced."

6. It is manifest that the validation conferred by the terms of the above provision was confined to the properties situate within the limits of Karachi Rating Area and since five of the appellants, namely (i) Adamjee Industries Limited (2) Gul Ahmad Textile Mills Limited (3) Globe Textile Mills Limited (4) Hussain Industries Limited and (5) Dawood Cotton Mills Limited was situated at Landhi and the 6th appellant, namely, Star Textile Mills Limited was situated in the Sind Industrial Trading Estate (Site) it did not apply to any one of them.

7. However, the respondents claimed the property tax on the basis of the new valuation even from them, constraining some of them to challenge the new valuations in the High Court of Sind at Karachi through the constitution petitions (C.P.No.434 to C.P. No. 436 of 1977).

8. The above petitions came up for hearing on 23‑4‑1981 before a Division Bench of the High Court, consisting of Mr. Justice Zafar Hussain Mirza and Mr. Justice Saleem Akhtar. On that date, the learned Additional Advocate General, Sind, appearing on behalf of the respondents made a statement that the assessment order made in respect of the appellants property had been cancelled by the Director General Excise and Taxation vide order dated 2‑2‑1978 and that fresh assessments would be made in accordance with law in their case after hearing them. Whereupon the learned Division Bench disposed of the constitution petitions as having become infructuous. The petitioners therein were, however, permitted to file fresh petitions if they felt aggrieved by the fresh orders made in their case. However, the Excise and Taxation Officer (Respondent No.4 herein), in the fresh orders made by him, merely confirmed the earlier valuation made in respect to their properties which was previously made and had been challenged in the constitution petitions already referred to.

9. Dissatisfied with the impugned assessments, some of the appellants came directly to the High Court through writ petitions without availing the remedy of appeal before the Departmental authorities. While others moved the High Court directly. Subsequently, even in the case wherein the assessments were challenged in appeal or revision, the parties therein also chose to invoke the writ jurisdiction of this Court, without waiting for the out‑come of their appeals/ revisions on the plea that the appellate authority having remained associated throughout with the process of preparation of the new valuation list and being a party to it could not decide the appeal/revision and take a decision different from that taken by the assessing authority.

10. The aforesaid writ petitions/filed were heard together by a Division Bench of the High Court but were, by a detailed order passed on 1‑7‑1982, all dismissed. Hence these appeals, by leave of this Court.

11. This Court, while granting leave to appeal observed:‑

"Amongst other points the question for consideration is whether the valuation lists validated by the Sind Finance Act, 1977, are applicable to the case of petitioners' Mills situated in Landhi) area."

On this aspect of the case, the High Court in its impugned judgment had observed as follows:‑

"The next contention is that the amendment in question being applicable only within the Karachi rating area, it does not cover the properties involved in some of the petitions, as they lie outside that area. Accordingly, the impugned assessment made in accordance with the new valuation list in these cases is illegal and liable to be set aside. As provided in subsection (i) of section 3 of the 1958 Act, (reproduced above) the Provincial Government has power to notify the urban area where the property tux is to be levied and for this purpose one urban area may be divided into two or more rating areas or several urban areas be grouped together as one rating area. Reference is invited to the four notifications mentioned at section No. (ii), (iii), (iv) and (v) on page 23 above. These notifications by which Karachi rating area have been shown separately from Sind Industrial Trading Estate Rating Area, Landhi Colony Town Committee Rating Area, Federal 'B' Area Rating Area, and Model Town Rating Area, are issued under section 7 of the 1985 Act, extending the life of the valuation list. We have however, not been shown the notification issued under subsection (i) of section 3 of the said Act indicating which of the Urban Areas of Karachi Division are included in the Karachi rating area. In absence of such notification it cannot be held authoritatively if the areas where the industrial units of the petitioners situate are not part of Karachi rating area. Even otherwise, it is a question of fact whether the properties involved in these petitions fall within the Karachi rating area or outside it. Such question cannot be answered by this Court by exercising its constitutional jurisdiction. But we would like to make it clear that section 8‑A by which the new valuation list has been enforced and validated applies only to the industrial properties within Karachi rating area. Bearing this in mind, we would wish the authorities concerned to have a fresh look at the petitioners' cases and if any of their properties is found to be situating outside the limits of the Karachi rating area, they are bound to be re‑assessed in accordance with the old valuation list if they are already assessed according to the new valuation list."

12. Notwithstanding the above observation the Department took no steps to alter its position and ask the appellants to pay the tax in accordance with the old valuation. Hence they also filed appeals before this Court.

13. The learned Advocate‑General, Sind has, however, now informed us that the respondents admit that the appellants are all situate either at Landhi or in the Sind Industrial Trading Estate and, therefore, the validating clause would not be applicable in their case and they are liable to be assessed in accordance with the old valuation and not in accordance with the new valuation. The stand taken up by the appellants that they are not liable to pay tax in accordance with the new valuation has, accordingly, been vindicated. The result is that these appeals succeed and, accordingly, are allowed with costs.

M.I. Appeals allowed.

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