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Petitioner: RAHAT TALKIES THROUGH MANAGING PARTNER--- VS Respondent: PROVINCE OF
Court Name: Balochistan High Court Judge(s): Mir Hazar Khan Khoso, Mir Khuda Bakhsh Marri Title:RAHAT TALKIES THROUGH MANAGING PARTNER--- vs PROVINCE OF
JUDGMENT
Reported As: PLD 1979 Quetta 198 Result: K. Judgment JUDGMENT MIR HAZAR KHAN KHOSO, J.-As common questions of facts and law are involved in the Petitions Nos. 182, 183 and 184 of 1978; the petitions as such are being disposed of by this one judgment. The proprietors of (i) Regal Cinema, (it) Asmat Cinema and (iii) Rahat Talkies of Quetta City by this petition under Article 199 of the Constitution of Islamic Republic of Pakistan have assailed the enhanced rate of the entertainment duty made on 3rd September, 1973 by the Government of Baluchistan and the decision dated 31st December, 1977 of the Member, Board of Revenue, Baluchistan. According to the petitioners before 3rd July, 1969 entertainment duty was used to be paid by Cinemas on basis of "one man one Tax" under provisions of section 3 of West Pakistan Entertainment Duty Act of 1958, hereinafter referred as the Act. On enforcement of the West Pakistan Entertainment Duty, First and Second Amendment Ordinance, 1969, the entertainment duty on cinemas was levied on percentage fixed on classifica--tion of various cinemas made under section 6-A of the Act and Rules made thereunder. For classification of the Cinemas, the Government of West Pakistan within its powers under section 11 read with section 6-A of the Act framed and enforced. The West Pakistan Entertainment Duty of Cinemas Rules, 1969 on 10-9-1969. Accordingly on 6th of November, 1969 all the cinema houses of Quetta city and Cantonment areas were classified and in fact there was no dispute about it. By this classification, the Regal Cinema was kept in category VII and was to pay 35 per cent. Duty whereas
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Asmat Cinema and Rahat Talkies in category VIII and to pay 30 per cent. The duty as disclosed before us was paid by all the petitioners willingly. It was alleged however that the dispute in the present shape arose between the petitioners and the Government of Baluchistan on 3rd September. 1973 when Secretary to the Government of Baluchistan, Excise and Taxation Department issued Letter No. 1144-38 Taxation BOR whereby upgraded the Regal Cinema to VI category; Asmat and Rabat Talkies to VII category from Categories VII and VIII respectively. By this classification, Regal Cinema had to pay 40 per cent., Asmat and Rabat Talkies 35 per cent. This upgrading of Cinemas and increase of 5 per cent. In duty really annoyed the petitioners, who as such made representation and challenged the same before the Governor of Baluchistan. On their representation, Secretary, Government of Baluchistan Excise and Taxation vide his letter No. 1923-24-38 Taxation 11/70B dated 1st October,1974 asked the Director Excise and Taxation Baluchistan to arrange for reclassification of all the Cinema of the Province through respective Classification committees, which had been already con--stituted for the purpose in the Province. In the meantime, however the Secretary ordered that the duty as was levied by memorandum No. 11/14-38 Taxation BOR dated 1st September, 1973; on ad hoc basis, be allowed to continue till final decision of the Classification Committees. On basis of this letter, the Excise and Taxation Officer, Quetta Division asked the Petitioners to pay the duty. However the dispute came for decision before the Member, Board of Revenue, Baluchistan, who in the meantime stayed the enhanced recoveries till decision of Classification Committees. On 5 June, 1975 the Special Committees sent their recommendations to the Governor of Baluchistan who disagreed with their recommendations and returned it for reconsideration. On 16th of September, 1976 the Excise and Taxation Officer reminded the petitioners to pay the revised duty as it was but to no effect. Eventually on 31st of December, 1977 the Member, Board of Revenue, Baluchistan turned down the petitioners, request and ordered for implementation of the order dated 3rd September, 1973. Being aggrieved against the decisions; (e) dated 31st December, 1976 made by the Member Board of Revenue and (ii) the order dated 3rd Septem--ber, 1973 made by the Secretary Excise and Taxation; the petitioners have challenged both the orders under Article 199 of the Constitution of the Islamic Republic of Pakistan before this Court. We have heard Mr. Basha--ratullah for the petitioners and Mr. M. Zafar for respondents. Mr. Basharatullah the learned counsel for the petitioners at the very outset vehemently contended that the Secretary Excise and Taxation depart-- ment, Government of Baluchistan was not competent for having upgraded the petitioners' Cinemas and passed the impugned order. Nor the Member Board of Revenue had the jurisdiction for having confirmed the decision of the Secretary in so-called review petition. The both orders as such were ab initio, illegal, void and having been passed without lawful authority. The learned counsel further stressed that only the Special Classification Committees constituted under rule 3 of the test Pakistan Entertainment Duty Cinema Rules, 1969 were competent or had authority to classify Cinemas or to fix the duty. And none other else was competent to do so. The learned counsel in order to fortify his contention has placed reliance on cases (i) Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore and 2 others (PLD1971SC61) where it is held :- "It is well settled that the neglect of the plain requirements of a statutory enactment, which prescribes how something is to be done, will invalidate the thing being done in some other manner if the enactment is absolute but not if it is merely directory. The real question which thus arises for consideration is when an enactment is to be considered as absolute and when as merely directory?th
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It is not possible to lay down a general rule of universal application in this behalf, but the one which is suggested by reported authorities in this connection is the affirmative or negative character of the language in which the provision is couched. If it is negative, that is to say, if the statute enacts that certain action shall be taken in a certain manner and, in no other manner, it has been held that the requirements are absolute and that neglect to attend them will invalidate the whole procedure. If on the other hand, the language is affirmative, it may be considered as a directory provision. Nonetheless, it appears that in several reported English cases, it has been held that an enactment, prescribing the formalities which are to be observed for validating an action, are not absolute, although expressed in negative or prohibitory language. One other principle which has been enunciated in this behalf is that as a general rule, statutes which enable persons to take legal proceedings under certain specified circumstances, demand that those circumstances must be accurately obeyed, notwithstanding the fact that the provisions thereof are expressed in merely affirmative language." (ii) Muhammad Yousaf Khan Khattak v. S. M. Ayub and 2 others (PLD 1972 Pesh. 151), where it is held :- "It is well-settled, that where a Statute provides for the doing of a thing in a particular manner, it impliedly prohibits doing of that thing in any other manner." and (iii) Messrs Highway Petroleum Service (Regd.), Lahore v. Islamic Republic of Pakistan and another (PLD 1977 Lab. 797) where it is held :- "The law relating to imposition of tax is to be construed strictly and if two interpretations are equally possible, the one that favours the tax--payer should be adopted. Moreover, unless it is a provision purely relating to recovery about which the principles of interpretation might be different under a taxing statute, it would not be permissible to assume any particular intention other than that clearly conveyed by the words used in the statute. And in this behalf, the tax payer has a right to rely upon the apparent construction of the words used. It is also necessary to appreciate that unless the State is able to bring the imposition within the letter of the law, it is not proper either to have resort to the process of mere inference/analogy." In his reply, on the other hand repudiating contention of the petitioners' counsel Mr. Zaffar the learned counsel for the respondents strenuously stressed that besides the Classification Committees, the Provincial Government as well under the provisions of subsection (7) of section 6- A of the Act is competent to alter classification of Cinemas, The learned counsel drew our attention to the provisions of law. The contentions as were advanced by both 'the learned counsel for the parties indeed reveals that the only crucial point involved in the matter before us is whether the Special Committees constituted under sub-rule (3) alone or the Provincial Government under subsection (7) is also competent to classify the Cinemas. Before entering upon the discussion on proposition as was laid before us we feel it not only pertinent but necessary also to look into the relevant provisions of laws dealing with the subject or having remained in vogue from time to time in the Province or the provisions of law as relied upon by the learned counsel for the parties. For purpose of analysing and convenience these laws are reproduced here-in-below :- The West Pakistan Entertainment Duty Act was promulgated on 23rd April 1958 in the Province of West Pakistan. Section 3 of Which laid down the procedure for fixation and mode of the payments of entertainment duty for having been paid at that time. It reads :- "Duty on payments for admission to entertainments.-(1) There shall be levied and paid to the Government on all payments for admission to any entertainment, a duty (hereinafter referred to as the "entertain--ments duty") at the rate of fifty per cent. Of such payment, excluding the amount of the duty:
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Provided that where the proprietor of an entertainment admits any person to any place of entertainment without any payment or on payment of an amount less than the amount normally charged for admission thereto, the entertainments duty shall nevertheless be levied and paid on the amount which would have been normally charged for admission to that place. Explanation I--, Explanation II.-.- (2) -------------." On 3rd July of 1969 an amendment in the Act was brought by West Pakistan Entertainments Duty (Amendment) Ordinance IX of 1969. The section 6-A of this Amendment prescribes the procedure and mode for the fixation and recovery of entertainment duty. It reads; "6-A. Mode of levying entertainments duty on cinemas.-(1) Notwith--standing anything contained in section 3 or in any other provision of this Act, the entertainments duty shall be levied on cinemas and paid by the proprietors thereof in accordance with the provisions of this section at the following scale :- (a) to (g).---------- (2) to (6).----------- (7) Government, or any authority empowered by Government in this behalf, may at any time, after holding such enquiry as it deems fit. Alter the classification of any cinemas: Provided that the classification of a cinema shall not be upgraded without giving an opportunity to the proprietor of the cinema to show cause against the proposed upgrading. (8) --------------------." Again on 28th August, 1969 a second amendment in West Pakistan Entertainment Duty Act of 1958 was brought by West Pakistan Entertainment Duty (Second Amendment) Ordinance, 1969. Section 6-A was further amended in the words as under :- "Amendment of section 6-A of West Pakistan Act X of 1958.-In the West Pakistan Entertainments Duty Act, 1958, hereinafter referred to as the said Act, in section 6-A...(a) for subsections (1) and (2), the following subsections shall be substituted, namely :- (1) Notwithstanding anything contained in section 3 or, in any other provision of section 8 of the West Pakistan Finance Ordinance, 1969- . (a) all cinemas, other than rural or touring cinemas, shall, for the purposes of payment of entertainment of duty under this Act and the Welfare Cess under the West Pakistan Finance Ordinance, 1969, be classified into the various classes specified in column 1 of Part A of the Schedule; (b), (c).------------- (2).---------------- 3. Addition of Schedule to West Pakistan Act X of 1958. -In the said Act, the following Schedule shall be added at the end:- SCHEDULE (PART A) (Cinemas other than rural or touring cinemas) Class ofEntertainments duty and WelfareCess payable Cinemaper cinematograph exhibition (show) Class I60 % of the optimum tax capacity of the cinema. Class II55 % of the optimum tax capacity of the cinema. Class III50 % of the optimum tax capacity of the cinema. Class IV45 % of the optimum tax capacity of the cinema. Class V40 % of the optimum tax capacity of the cinema. Class VI35 % of the optimum tax capacity of the cinema.
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Class VII30 % of the optimum tax capacity of the cinema. Class VIII25 % of the optimum tax capacity of the cinema. Parts B and C--------------------------' On 10th of September, 1969, the Government of West Pakistan framed Rules and notified it as the West Pakistan Entertainment Duty on Cinema Rules, 1969. Rule 3 of which deals with classifications of Cinemas as to be made under subsection (1) of section 6-A of the Act. Rule 6 deals with the reviewing powers of the Commissioner as well of the Member, Board of Revenue. The both Rules are reproduced for ready reference :-- "3.-(1) For the purposes of classifiying cinemas under subsection (!) of section 6-A of the Act, there shall be- (a) a Special Classification Committee for each of the. Following towns:- Karachi, Hyderabad, Sukkur, Quetta, Multan, Sahiwal, Lahore, Lyallpur, Sialkot, Sargodha, Gujranwala, Rawalpindi and Peshawar, and (b) a District Classification Committee for each District in the Province. (2) The Special Classification Committee shall be responsible for classification of cinemas situated within the Corporation, Municipal or Cantonment limits of the town concerned and its composition shall be as follows :- (i) The Commissioner of the Divisions . . . . . Chairman. (ii) The District Magistrate . . . . . Member. (iii) The Director of Excise and Taxation . . . . Member. (iv) The Director of Information . . . . Member. (3) The District Classification Committeeshall be responsible for classification of cinemas within its District other than the cinemas within the purview of the Special Classification Committee, and its composition shall be as follows ; (i) The District Magistrate . . . . . Chairman. (ii) An Officer of the Excise and Taxation Department not below the rank of District Excise and Taxation Officer. . . Member. (iii) An Officer of the Information Department and below the rank of an Assistant Director of Information . . . . . Member. 4.---------------- 5.---------------- 6. Review.-(1) The authority competent to Review the classification of a cinema under subsection (3) of section 6-A of the Act shall be- . (a) where the classification has been made by Special Classification Committee, the member of the Board of Revenue, incharge of Excise and Taxation; and (b) where the classification has been made by the District Classification Committee, Commissioner of the Division concerned. (2) An application for review of the classification of a cinema shall be preferred by means of a memorandum which shall be stamped as laid down in Article 11 (a) of Schedule 1 of the Court Fees Act, 1878, and shall be accompanied by a certified copy of the order sought to be reviewed. (3) The application for review may be presented in person or through a duly authorised agent or be sent to the reviewing authority by registered post. (4) Before deciding the review application the competent authority shall given to the applicant an opportunity of a hearing before it, and may make itself or cause to be made by an officer subordinate to it, such enquiry as it may deem necessary." Having gone through the relevant provisions of law, we now return to the facts as were discussed before us by Mr. Zaff'ar in reply. In unequivocal words, Mr. Zaffar the learned counsel for the
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respondents neither disputed the constitution nor the authority of the Special Classification Committee for classification having classified the cinemas in Quetta Town. He frankly conceded that Rule 3 finds its place in the Rules of 1969 for the same purpose. On this proposition as is enunciated in the Act and its rules or as has been unanimously agreed, by both the counsel, there would indeed be no cavil in saying that a Special Classification Committee with having the Commissioner of Quetta as its Chairman, the District Magistrate Quetta, the Director of Excise and Taxation and the Director of Information as its members has the authority to clasaify the Cinemas in Quetta Town and the authority competent to review such classification made under subsection (1), of section 6-A of the Act is the Member, Board of Revenue incharge of Excise and Taxation. Indeed there was no quarrel on the proposition as have already been said above between the parties. The quarrel as is was indeed in respect of the powers of the Secretary and the Member, Board of Revenue as has already been discussed somewhere above. However, in that respect, it was reiterated before us by Mr. Zuffar the learned counsel, for the respondents as we have already mentioned in the preceding paragraphs that subsection (7) of section 6-A of the Act empowers the Provincial Government to alter the classification of Cinemas as was done in 'the instant cases. This aspect of the case indeed was not touched by Mr. Basharatullah. Apparently as we find that he had no substance to meet with the contention raised by Mr. Zaffar. In such difficult situation, however Mr. Basharatullah tenuously argued that as no review petition was filed by the petitioners before the Member, Board of Revenue, besides the decision of the Government was not reviewable by the M. B. R., the order of the M. B. R. Dated 31-12-1977, as such was illegal and made without lawful authority. It appears to be fallacious contention. However we would deal with it at proper stage and time hereinafter at some other place as before dealing with it, it would be in the fitness of things to deal with the first impugned order dated 3rd Septem--ber, 1973 which was indeed also the subject-matter before the M. B. R. Earlier in the preceding paragraph, we have observed that Special Classifica--tion Committee constituted under rule 3 has the power to classify the Cinemas in Quetta Town as is envisaged in subsection (1) of section 6-A of the Act. Such classification is indeed done under subsection (1) of section 6-A. This classification is reviewable under the provision of rule 6. We have already said so somewhere else hereinabove, we do not want to retouch it at this stage. Indeed that is not all, or as was thought or argued by Mr. Basharatullah. Besides subsection (1) subsection (7) of section 6-A also finds its place in the Act. In unequivocal words subsection (7) say that "the Government or any authority empowered by the Government in this behalf may at any time after holding such enquiry as it deems fit alter the classification of Cinemas: provided that the classification of Cinema shall not be upgraded without giving an opportunity to the proprietor of the Cinema to show-cause against the proposed upgrading. "The subsection supports contention of Mr. Zaffar. In such situation without any hesitation, we agree in toto with the contention raised by Mr. Zaff'ar that the Government has the powers or authority to alter such classification of Cinemas. It automatically answers the contention of Mr. Basharatullah. In case of upgrading; however a show-cause notice against the proposed upgrading was to be given to the petitioners. We have now to see whether the petitioners' were given such show-cause notice or an opportunity of being heard before the impugned upgrading. The impugned order of 3rd September 1973 is self-explanatory in that respect, saying that it was made after several meetings between the Quetta Cinema owner3, the representatives of the Excise and Taxation Department in consultation with the Finance Secretary with consent of the Cinema ownersfor reference is reproduced : - GOVERNMENT OF BALUCHISTAN EXCISE AND TAXATION DEPARTMENT No. 1144-38 Taxation/B. O. R. Dated Quetta the 3rd September, 1973. The Director, Excise and Taxation, Balachistan.
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Subject: COLECTION OF ENTERTAINMENT DUTY AND WELFARE TAX SYSTEM OF Reference your Memorandum No. 1446 Tax dated the 7th June, 1973. 2. Several meetings between the Quetta Cinema Owners and the repre--sentative of the Excise and Taxation Department was held and finally it was agreed in consultation with the Finance Secretary that--- (1) the present classification scale of each cinema should be raised by at least 3 to 5 %. (2) the cinema owners have offered to pay a guaranteed capacity tax of around Rs. 8,80,000 on account of entertainment duty and welfare cess to Government irrespective of the fact they run any show or not, and have undertaken not to claim any rebate previously enjoyed by them, and voluntarily offered to make weekly payments in advance to solve the question of arrears for the future, and in the end they have prayed for deferring any change in the present system of taxation. (3) If the cinema owners fail to comply with the above proposals, Government might like to bring back the old system by notifying the date of endorsement of Ordinance No. VI of 1973 under which the Government income would be entirely based on actuals. 3. The case was submitted to Governor, Baluchistan and as per his approval the classification scale of each cinema of Baluchistan Province has been fixed as shown in the attached statement. It has also been decided that the welfare Cess from paisa 10 to paisa 20 should be raised. Please take further necessary action accordingly. (Sd.) Secretary to Government of Baluchistan, Excise and Taxation Department" "STATEMENT SHOWING THE INFORMATION WITH REGARD TO CINEMAS SITUATED IN URBAN, AND RURAL AREAS ClassPercentage S. No.' Name of CinemaLocalityFixedFixedRemarks 1.Regal Theatre.Circular Road,VI40% Quetta. 2.Ismat Cinema. Prince, Road, Quetta.VII35% 3.Rabat Talkies.Prince, Road, Quetta.VII35 % 4.To 16------------------------------------------------------------------------------------ ----. (Sd.) Secretary to Government of Baluchistan. Excise and Taxation Department." The order shows that the percentage in case of the petitioners was raised to the maximum of 5 % while in case of other cinemas in the same Town was raised to 3 % only. Not in our view, but obviously this difference of 2% has been given cause to the petitioners to impugn it: Either at the outset through representations before the Governor; or then before us in this extraordinary constitutional jurisdiction. At the initial stage, the representation was presented by the petitioners on 15th October, 1973 to the Governor of Batuchistan. It is reproduced :- "We, the proprietors of Rabat, Regal and Ismat Cinemas, beg to submit as under :-- (1) That the Secretary to Government of Baluchistan Excise arid Taxation Department vide his letter No. 1144-38 Taxation B. O. R. Date the 3rd September, 1973, informed us that the class of Rabat Talkies and Ismat Cinema has been upgraded from VIII to VII and that of Regal Theatre from VII to VI since 3-9-1973 without assigning any reason/ground which is arbitrarily and contrary to the provisions of law.
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(2) That the categories of the cinemas which have now been upgraded by the Secretary to the Government of Baluchistan, Excise and Taxation Department vide his letter under reference were determin--ed by the `Special Classification Committee' headed by the Commis--sioner, Quetta Division as its Chairman, the Deputy Commissioner Quetta-Pishin, Director of Information and Director, Excise and Taxa--tion Quetta, acted as its members. The `Special Classification Com-- mittee' keeping in dew the manners and procedures of classification of cinemas as laid down under rule 4 of the West Pakistan Entertainment Duty on Cinemas Rules, 1969 assigned the following classes as shown against each cinema,- Regal TheatreClass VI .i e. 35 Rabat Talkies Class VII i.e. 30% Other CinemasClass VIIIi.e. 25% (3) That it has been stated in the said letter that the cinema owners have offered to pay a guaranteed capacity tax around Rs. 8,80,000. In this regard it may be respectfully submitted that the cinema owners are already paying Entertainment Duty approximately amounting to Rs. 7,31,000 during a year and welfare Cess amounting to Rs. 1,15,000. Now with the increase in the rate of welfare Cess from paisa Ten to paisa Twenty per ticket since 3-9-1973, there would be another…
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