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Petitioner: AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR VS Respondent: MIR MUHAMMAD NASEER
1999 P L C (C
1999 P L C (C.S.) 1173
[Supreme Court (AJ&K)]
Present: Sardar Said Muhammad Khan, C. J. and Basharat Ahmad Shaikh, J
AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR through Chief Secretary, Azad Kashmir Government. Civil Secretariat, Muzaffarabad"
versus
Haji MIR MUHAMMAD NASEER and others
Civil Appeals Nos.167, 168 and 169 of 1998, decided on 15th February, 1999.
(On appeals from the judgment of the High Court dated 6‑8‑1998 in Writ Petitions Nos. 21 of 1998 and 106 of 1998).
(a) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑‑‑
‑‑‑‑Ss. 31 (4), 42 & 44‑‑‑‑Azad Jammu and Kashmir Finance Act, 1998, S.4‑‑‑Notification dated 21‑11‑1997 and 23‑12‑1997‑‑‑Opening of new educational institutions and raising of tuition fee‑‑‑"Fee" and "tax"‑‑ Distinction‑‑‑Whether tuition fee a tax‑‑‑Government through notification opened some new educational institutions and raised tuition fees payable by students of said educational institutions‑‑‑Fees chargeable from students were challenged before High Court in Constitutional petition alleging that fees amounted to "tax" which under provisions of S.31 (4) of Azad Jammu and Kashmir Interim Constitution Act, 1974 could be imposed only by Legislative Assembly and not through an executive action‑‑‑High Court accepting Constitutional petition, concluded that fee chargeable from students was "tax" because no part of said fee was earmarked necessarily for rendering service in return to those from whom it was to be recovered‑‑ Validity‑‑‑High Court had failed to take note of the fact that tuition fee was being received from only those students who were to receive education from teachers in educational institutions‑‑‑Student was paying money and in return was getting education‑‑‑ "Tax" was a compulsory exaction of money by a public Authority for a public purpose and was not a payment for any specific service rendered‑‑‑In respect of "fee" there was "quid pro quo" which meant "something for something" while in "tax" it was absent‑‑‑In case of payment of fee not only there was "quid pro quo", but was absence of compulsory exaction because tuition fee was to be paid by one who would go to the educational institution and not by one who would not go there‑‑‑Tuition fee as well as admission fee charged from students was a "fee" and could not by any standard be construed as tax.
Rahim Ullah Khan and 65 others v. Government of N.‑W.F.P. through Secretary, Agricultural Forest and Cooperation Department, Peshawar and 5 others 1990 CLC 550; Mehboob Yar Khan and another v., Municipal Committee, Mian Channu and 2 others PLD 1975 Lah. 748; Abdul Majid and another v. Province of East Pakistan and others PLD 1960 Dacca 502; Government of North‑West Frontier Province through Secretary, Agriculturc and others v Rahimullah and others 1992 SCMR 750; The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindr Thirtha Swamiar of Sri Shirur Mutt AIR 1954 SC 282: Sudhindra Thirtha Swamiar and others v The Commissioner for Hindu Religious and Charitable Endowments, Mysore and another AIR 1963 SC 966; Nagar Mahapalike, Varanasi v. Durga Das Bhattacharya and others AIR 1968 SC 119; The State of Maharashtra and others v. The Salvation Army, Western India Territory AIR 1975 SC 746; Messrs Khyber Electric Lamps Manufacturing Limited and others v. Chairman, District Council, Peshawar 1986 CLC 533 and Trustees of the Port of Karachi v. Gujranwala Steel Industries and another 1990 CLC 197 ref.
(b) Words and phrases‑‑‑
‑‑‑‑‑‑ Quid pro quo"‑‑‑Meaning and scope‑‑‑"Quid pro quo" means "what for what; something for something "‑‑‑Term was used in law for giving one valuable thing for another‑‑‑Fee was nothing more than mutual consideration which passed between two parties to a contract and which would render it valid and binding. [p. 1180] D
(c) Azad Jammu and Kashmir Civil Servants (Appointment and Conditions of Service) Rules, 1977‑‑‑
‑‑‑‑Rr. 17 & 23(1)‑‑‑Appointment‑‑‑Inviting applications for appointment through advertisement prior to creation of posts‑‑‑Validity‑‑‑Provisions of Rr. 17 & 23 (1) of Azad Jammu and Kashmir Civil Servants (Appointment and Conditions of Service) Rules, 1977 had provided that post or vacancy had to exist before it was advertised‑‑‑Said provisions did not visualise that applications could be invited without there being a vacancy or post‑‑‑Posts having been created subsequently on basis of advertisement, applications and interviews having already been conducted before creation of vacancies, appointments on said posts was illegal, especially when number ‑of posts were not indicated in advertisement.
(d) Words and phrases‑‑‑
‑‑‑‑"Fee" and "tax" ‑‑‑Distinction.
Khawaja Shahad Ahmad, Advocate for Appellants (in Civil Appeals Nos. 167 and 168 of 1998).
Abdul Rashid Abbasi and Raja Muhammad Hanif Khan, Advocates for Respondents (in Civil Appeals Nos. 167 and 168 of 1998).
Raja Muhammad Hanif Khan, Advocate for Appellants (in Civil Appeal No. 169 of 1998).
Khawaja Shahad Ahmad, Advocate for Respondents (in Civil Appeal No. 169 of 1998).
Dates of hearing: 21st, 22nd December, 1998 and 11th January, 1999.
JUDGMENT
BASHARAT AHMAD SHAIKH, J.‑‑‑Azad Government of the State of Jammu and Kashmir opened some new educational institutions and raised the tuition fees payable by the students and its functionaries also recruited new staff to teach in different institutions. In this Connection two notifications were issued. The notification issued on 21st November, 1997 was for opening of new schools and colleges and for upgrading certain existing institutions. More than one thousand new posts were also created by the same notification. The other notification was issued on 23rd December, 1997 to raise tuition fees payable by the students of schools and colleges in the State. Admission fee in respect of some of the courses was also raised. For example in case of primary classes the new tuition fee is rupees five. The highest fee now payable by a school student is rupees fifteen while in degree classes maximum tuition fee is rupees forty. A sum of rupees one hundred has been levied as the fee for post‑graduate classes including B.Ed. These steps are commonly known as the 'Education Package'.
Two writ petitions were filed in the High Court to challenge the two notifications mentioned above. First in time was Writ Petition No.21 of 1998 which was filed by Haji Mir Muhammad Naseer and 7 others, all residents of village Mind Gran, Tehsil Muzaffarabad praying for a declaration that the two notifications mentioned above had been passed without lawful authority and were of no legal effect. The ground raised in the writ petition was that the notifications had been issued in utter disregard and violation of section 31 (4) of the Azad Jammu and Kashmir Interim Constitution Act, 1974 because the fees under dispute amounted to tax which under the aforesaid provision of the Constitution Act could be imposed only by the Legislative Assembly and not through an executive action. Writ Petition No. 106 of 1998 was filed by Abdul Rashid Tarabi, Aftab Ejaz and Zafar Saeed. Abdul Rashid Tarabi is Amir Jamat‑e‑Islami Azad Jammu and Kashmir and also a member of Azad Jammu and Kashmir Legislative Assembly from a constituency in District Bagh. For detailed grounds incorporated in the writ petition Mr. Tarabi claimed that in the capacities mentioned above he was responsible to watch whether State Subjects were being treated in accordance with the Constitution and the laws. About the other two writ petitioners in the same writ petition it was stated in the petition that they had been refused jobs against the newly created posts. Apart from contending that the tuition fee could not be imposed or raised except under an Act of the Assembly, it was further prayed that all appointments made in pursuance of the impugned notifications may be quashed. As many as seventy‑three persons, men and women, all belonging to District Bagh, were impleaded as respondents with the prayer that their appointments may be specifically quashed. Various objections were raised about these appointments. The High Court has, by accepting the contention that tuition fee is a tax, declared that the impugned raise in the tuition fees was ultra vires of the Constitution but has rejected the challenge to the appointments under reference.
By leave of the Court, three appeals have been filed to challenge the judgment of the High Court. Azad Government of the State of Jammu and Kashmir has challenged the declaration that upward revision in tuition fees was ultra vires of the Constitution. Abdul Rashid Tarabi and two others have challenged that part of the judgment of High Court by which the impugned appointments were upheld. They have impleaded, apart from the Government and some of its functionaries, 61 private respondents. The third appeal is by Sardar Rashid Khan and 29 other persons belonging to different parts of District Bagh who were not before the High Court but feel aggrieved by the judgment of the High Court because they feel threatened that newly established institutions will be closed and boys and girls belonging to their families, who had taken admission in some of them, would be deprived of educational facilities.
Before proceeding further we have to take note of a legislative development which has taken place after the judgment of the High Court. An Act of Assembly called the "Azad Jammu and Kashmir Finance Act, 1998" was passed by the Assembly which received the assent of the President on 9th August, 1998. In section 4 of the Act it lays down that: "The tuition fee and admission fee will be charged from the students studying in Government educational institutions at the rates mentioned therein. The rates are the same which were earlier specified in the impugned notification of 23rd December,1997". The plain effect of the above extracted provision is that the tuition fee and admission fee challenged in the writ petitions stand enforced by law However they are chargeable from 9th August, 1998 while the notification by which the tuition fee etc. was revised was issued on 23rd December 1997 Therefore the dispute only relates to the period falling between the two dates mentioned above. Arguments were heard by the High Court on 30th June, 1998 and judgment was announced on 6th August. That explains why the Act mentioned above and its contents do not find any mention to the judgment of the High Court. Be that as it may, Act of the Assembly has raised the tuition fees as well as the admission fees and the basic objection raised in the writ petitions has been removed with effect from 9th of April 1998.
It is provided in subsection (4) of section 31 of the Azad Jammu and Kashmir Interim Constitution Act that:‑‑
"No tax shall be levied for the purposes of the territories of the Azad Jammu and Kashmir except by or under the authority of an Act of the Council or the Assembly. "
For definition of the term "tax" we have to refer to section 2 which is definition‑clause of the Constitution Act. The relevant definition reads:‑‑
" 'tax' means imposition of any tax or duty, whether general, local or special and 'tax' shall be construed accordingly. "
Let us first see the reasoning adopted by the High Court for its conclusion. To begin with it was observed as follows:‑‑
"According to the learned counsel for the petitioners, if money received as fee is not spent for the benefit of those for whom it is recovered, then in that case such fee shall amount to tax. He in support of his contentions has relied on a case titled Rahim Ullah Khan and 65 others v. Government of N.‑W.F.P through Secretary, Agricultural Forest and Cooperation Department, Peshawar and 5 others' 1990 CLC 550, the petitioners who were running Timber Sale Depots and Saw‑mills in the District of Swat, challenged the Notification of N.‑W.F.P. Government dated August 6, 1984 whereby while amending the Rule 9 of the N.‑W.F.P. Establishment of Sale Depots and Sawing Units Rules,1978, the registration fee and annual renewal fee was enhanced from Rs.100 to Rs.1,000. In this case, after the survey of case‑law on the subject, it was laid down in para. 6, which reads as under:‑‑
6. Certain litmus tests for determining a particular exaction to be fee may be summed up as follows:‑‑
(i) There must be co‑relation between the amount realised as fee and the services rendered or benefits granted to those who are made to pay the same;
(ii) the general purpose for raising revenue alone for the Province or the Federation shall militate against 'quid pro quo' which is essential component of the levy of fee. Such a 'quid pro quo' may not be determined with exactitude but there has, to be significant relations between the fee charges and the services rendered;
(iii) a sudden raise in the fee itself which cannot be defended on the aforestated principle of 'quid pro quo' may metamorphose the levy into tax. If not at all, substantial part of the revenue so raised may be earmarked for the benefits of those who pay the fee. The burden of establishing the co‑relationship between a levy and the services rendered or the benefits bestowed lies on those who impose such a levy'."
The learned Judge then noted that there was another case on the subject which was reported as Mehboob Yar Khan and another v. Municipal Committee, Mian Channu and 2 others (PLD 1975 Lah. 748). From it the following paragraph was reproduced:‑‑
"Municipal Committee, Mian Channu, earmarked a new place for the cattle fair to permit daily sale and purchase of sheep and goats. Rs.300 was levy fee on sellers in the aforesaid Bakra Mandi. The matter was challenged in a petition before the High Court, the learned Judge expressed himself while making distinction between the tax and fee in the following words:‑‑
'The distinction between a 'tax' and a 'fee' is well‑established. A tax is a compulsory exaction of money by public authorities for public purposes enforceable by law and is not a payment for services rendered. The main distinction between them lies primarily in the fact that a tax is levied as a part of common burden, while a fee is a payment for a special benefit or privilege'."
The High Court also reproduced the following paragraph from a judgment of the East Pakistan High Court reported as Abdul Majid and another v. Province of East Pakistan and others (PLD 1960 Dacca 502):
"The preamble clearly mentions that the purpose of the Act is to raise funds for the augmentation of the revenue of the Province. Further, the fee that has been levied under section 5 has been made to depend upon the capacity of the payee. Furthermore, the hotels which have income of less than Rs.500 are excluded from the liability to pay any fee. In the words of the Supreme Court of India, these are 'undoubtedly some of the characteristics of taxes, and imposition bears a close analogy of income tax'. Lastly, the fact that no part of this fee is earmarked or specified for rendering service to the payee negatives the theory of 'fee'. We therefore, agree with Mr. Chowdhury that the fee levied under section 5 is a tax and not a fee, and consequently it was beyond the powers of the Provincial Legislature to enact that provision." I
Immediately after that the following conclusion was recorded:‑
"In light of these authorities which were referred by Mr. Abdur Rashid Abbasi, learned counsel for the petitioners, the imposition in the present case cannot be termed as fee because no part of this fee is earmarked or specified necessarily for rendering service in return to those from whom it shall be recovered. After coming to this conclusion that the fee imposed through the impugned Notifications, is in fact a tax. The same, therefore, was beyond the jurisdictional competence of the executive powers of the Government. In civilized countries all the organs of the State consider law, the only source for their guidance. No organ of the State, therefore, exercise powers in excess of its domain, as laid down in the Constitution."
It will be seen that the High Court reached the conclusion, in light of the observations reproduced above that fee was to be construed as 'tax' in the present case because no part of the impugned fee, in the opinion of the High Court, was earmarked necessarily for rendering service in return to those from whom it was to be recovered. This is the sole reason recorded by the learned Judge in the High Court but he failed to take note of the fact that tuition fee was being received from only those students who were to receive education from teachers. In plain words a student is paying money and in return is getting education. We, therefore, fail to understand how the High Court could validly observe that no service was being rendered to the students. In our view the proposition is plain that one who gets education pays tuition fee while one who does not receive any education he pays nothing on this account. This proposition has been clearly discussed in the judgments relied upon in the judgment under appeal. The first litmus test laid down on this subject in Rahim Ullah Khan's case is that if there is co‑relation between amount realised and the services rendered or benefits granted to those who are paying the same it is a fee. This condition is fulfilled in the present case because the disputed tuition fee is paid by those who actually get education in an educational institution. In the second para. of the precedent judgment it is laid down that where there is quid pro quo it is a fee. "Quid pro quo" literally means: "What for what something for something". According to the Black's Law Dictionary this term is used in law for giving one valuable thing for another and further that it is nothing more than mutual consideration which passes between the two parties to a contract, and which renders it valid and binding. The condition that there has to be significant relation between a fee charged and the services rendered is clearly and visibly present in the matter under consideration because fee is being charged for service rendered to each one who pays for it. The other two reported cases also lay down the same principles. In Mehboob Yar Khan's case it was observed that tax is levied as a part of common burden while a fee is a special benefit or privilege.
Kh. Shahad Ahmad; the learned counsel for Azad Government of the State of Jammu and Kashmir, brought to our notice that the judgment of Peshawar High Court in Rahim Ullah Khan's case was challenged before the Supreme Court of Pakistan which set aside the judgment of the High Court vide its judgment reported as Government of North‑West Frontier Province through Secretary, Agriculture and others v. Rahimullah and others (1992 SCMR 750). So far as the distinction between fee and tax is concerned the Supreme Court did not disagree with the principle summarised by the Peshawar High Court but set aside its judgment by observing that the fee being recovered by the Government from owners of Timber Sales Depots and Sawing Mills was not a 'tax' but a 'fee' because the owners would get indirect benefit. The contention of the N.‑W.F.P. Government was that the abovementioned fee was being spent on the salary of staff who visited the area so that nobody could install saw mills and that it was an indirect benefit to the owners because it discouraged the trend of frequent installation of saw mills. Acceptance of this plea shows that even an indirect benefit could also be construed as a fee. In the present case only those students are to pay tuition fee to whom education is imparted. Therefore, the benefit is direct and the payment made by such students is a fee, not a tax.
Kh. Shahad Ahmad also cited the following authorities:‑‑
(1) The Commissioner, Hindu Religious Endowments, Madras, v. Sir Lakshmindr Thirtha Swamiar of Shirur Mutt (AIR 1954 SC 282).
(2) Sudhindra Thirtha Swamiar and others v. The Commissioner for Hindu Religious and Charitable Endowments, Mysore and another (AIR 1963 SC 966).
(3) Nagar Mahapalike, Varanasi v. Durga Das Bhattacharya and others (AIR 1968 SC 119).
(4) The State of Maharashtra and others v. The Salvation Army, Western India Territory (AIR 1975 SC 746).
(5) Messrs Khyber Electric Lamps Manufacturing Limited and others v. Chairman, District Council, Peshawar (1986 CLC 533).
(6) Trustees of the Port of Karachi v. Gujranwala Steel Industries and another (1990 CLC 197).
In all these judgments broadly speaking it is laid down that a tax is a compulsory exaction of money by a public authority for a purpose and is not a payment for any specific service rendered. In respect of fee there is quid pro quo while in a tax it is absent. In the present case not only there is 'quid pro quo' but there is absence of compulsory exaction because a tuition fee is paid by one who goes to the school and not by one who does not. No judgment has been cited which may support the judgment of the High Court.
Thus it is clear that the High Court was in patent error when it observed that no part of the fee is earmarked for rendering services in return. We have no hesitation in holding that the tuition fee as well as the admission fee charged from the students is a fee and could not by any standard be construed as a tax.
Consequently, appeals filed by the Azad Government of the Sate of Jammu and Kashmir and Sardar Rashid Khan and 29 others merit acceptance and the judgment of the High Court so far as it relates to notifications dated 21st November, 1997 and 23rd December, 1997 is unsustainable.
This leads us to the third appeal bearing No. 169 of 1998 titled Abdul Rashid Tarabi and 2 others v. Azad Jammu and Kashmir Government and 69 others. This appeal has been filed to challenge the appointments in pursuance of the impugned notifications. It was averred in the writ petition that the official respondents made appointments in violation of the law on the subject and it was alleged that the appointments were based on discrimination on the basis of caste, creed and political affiliation. Appellants N os.2 and 3 submitted in the writ petition that they were not given clerical jobs because they were not aligned with the party in power. It was alleged in the writ petition by the appellants herein that the appointments under reference had been made without advertising posts. with the result that large number of persons, male and female, were deprived from competing for entry into Government service. It was further averred that those who did not apply included persons who were more qualified than those who have actually been appointed, Numerous examples were cited in the text of the writ petition with names, addresses and qualifications of persons who were more qualified than those who were appointed from each Union Council. 148 annexures were attached with the writ petition which were copies of the testimonials showing qualifications of those who according to the averments in the writ petition, were deprived from competing in the selection. On page 135 of the High Court file there is copy of M.B.A. degree of one Muhammad Naseem Khan. On page 136 there is copy of a degree of Shahadat‑ul‑Almia‑fil Aloom‑UI‑Arbia‑Wah‑Islamia equal to M.A. obtained by Muhammad Khaliq Khan. Aziz Ahmad Nadeem also holds the same degree which is available on page 148. He is also Hafiz‑e‑Qur'an and has done his 'Tajwid' course. Waqar Ahmad Khan is Graduate from Punjab University while Fayyaz Akbar is Graduate from University of Karachi. One Ejaz Ahmad holds B.Sc. degree. Amongst them there are large number of men and women who are P.T.Cs. while a large number of appointees are simple Matriculates. As already mentioned, 73 appointees were duly impleaded as respondents in the writ petition. Photostat copies of their appointment orders were attached with the writ petition. However, private respondents in this Court are 61. Serious allegations were also levelled in respect of the selection process.
On behalf of the private respondents two photostat copies of advertisements published in a Rawalpindi daily were attached to repudiate the assertion that the posts under reference had not been advertised. One of the advertisements was got published by District Education Officer Bagh (Male) and the other was on behalf of District Education Officer (Female). Both the advertisements were published towards the end of May, 1997 while the two impugned notifications were issued on 21st November and 23rd December, 1997. During the hearing of the case we felt the necessity of ascertaining certain facts from the record. We, therefore, requisitioned the record and have perused it. The record shows that interviews for the posts of female teachers were held on July 8, 11, 1997 while those for male teachers were held on September 14‑16, 1997.
From the above it is clear that when applications were invited through advertisements…
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