Riaz Ali Vs Govt of KPK

JUDGMENT SHEET

PESHAWAR HIGH COURT, MINGORA BENCH

(DAR-UL-QAZA), SWAT

(Judicial Department)

W.P No. 835-M/2025

Riaz Ali —Versus— Govt. of KPK through Secretary Local Government and others

PRESENT:

Mr. Zegar Sher, Advocate for petitioner.

Mr. Kamal Khan, Assistant A.G. for official respondents.

M/S Mehtab Sikandar and Abid, Advocates for remaining respondents.

Date of hearing: 23.09.2025

JUDGMENT

QAZI JAWAD EHSANULLAH, J.- Through instant petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, the petitioner has prayed for the following relief:

“In the light of the above and so many other grounds to be advanced at the time of arguments, it is therefore prayed that by accepting the instant writ petition in the light of the previously decided W.P No. 1167-M/2020 being one and the same natured matter and all subsequent orders/directions regarding the same subject matter may be declared illegal, without lawful authority and of no legal effects”.

2.As per averments of the petition, the petitioner is engaged in the transport business under valid route permits issued by the Transport Departments of Khyber Pakhtunkhwa and Punjab, has also obtained sanction for a Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

“D” Class Bus Stand License in the name of Bilal Coach at Dewana Baba Road and Mardan Road, Sawari, District Buner. He asserts that Bilal Coach operates from its own land, where facilities such as bus stand, ticketing counter, waiting area, washrooms and tuck shop have been established, without utilizing any facility of the Tehsil Municipal Administration (TMA), Sawari, District Buner.

Despite this, Administrative/Tehsil Municipal Officer, Tehsil Sawari (respondent No.5), under misinterpretation of a Gazette Notification, is allegedly demanding transit/adda fee from the petitioner’s buses plying on routes from Buner to Abbottabad, Peshawar, Islamabad, Lahore and Karachi, a demand which the petitioner terms unlawful and beyond jurisdiction, particularly in view of this Court’s judgment dated 22.09.2022 in W.P. No.1167-M/2021 titled “Malik Muhammad Tahir Khan v. Government of Khyber Pakhtunkhwa and others”, wherein it was held that transport services not availing TMA facilities are not liable to pay such fee. The petitioner avers that respondent No.5, despite the said authoritative pronouncement, continues with his illegal demand, leaving him with no option but to seek intervention of this Court for declaring the impugned action as unlawful, void ab initio and of no legal effect.

3.In response, respondent No.5 has filed his official comments whereby he has refuted the assertions of the petitioner on various legal and factual grounds. Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

4.Arguments heard and record perused.

5.Grievance of the petitioner is that respondent No.5 is unlawfully demanding tax in the shape of “Adda fee” from him in respect of his public transport business without any legal justification. During the course of arguments, learned counsel representing respondent No.5 was specifically asked to point out the enabling provision under which such tax could be levied, particularly by reference to Schedule-III of the Khyber Pakhtunkhwa Local Government Act, 2013 (“the Act”). In response, reliance was placed on Items No. 8, 10 and 15 of the said Schedule, which are reproduced as follows:

“8. Fees for specific services rendered by Tehsil Local Government.

10.Market fees.

15.Charges for execution and maintenance of works of public utility like lighting of public places, drainage, conservancy and water supply operated and maintained by Tehsil Local Government”

The record, however, clearly shows that the fee demanded from the petitioner is “Adda fee” as evident from the receipts1 annexed with the instant petition. Such a levy is not covered by any of the above-mentioned items relied upon by the respondent/TMA. More significantly, the alleged fee does not even find mention by name in Schedule-III of the Act, making its imposition devoid of statutory backing. In their official comments, respondent Page 14 of the writ petition Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

No.5 has further relied upon Notification No.1822/TMA- Gagra/Buner dated 16.06.2025, whereby a so-called fee has been imposed upon the petitioner for utilizing his private property as a bus stand. Yet, even that notification fails to bring the impugned levy within the ambit of any entry of Schedule-III, thereby exposing its legal infirmity. It is by now a settled principle of law that a taxing statute must be construed strictly, and no tax can be imposed unless expressly authorized by law. The apex Court in Hirjina and Co. (Pakistan) Ltd. Karachi v. Commissioner of Sales Tax Central2 categorically ruled that in interpreting a taxing statute, courts must adhere strictly to the language of the law and cannot import into it provisions not clearly expressed in order to cure supposed deficiencies. Similarly, in Government of West Pakistan v. Jabees Limited3, it was emphatically held:

“10. [...] in order to contend that, while construing a taxing statute, strict construction is to be placed and in case of any ambiguity, the benefit should be given to the subject. It is a well-settled principle of law that all charges upon the subject must be imposed by clear and unambiguous language and a subject is not to be taxed unless the language of the statute clearly imposes the obligation and language must not be stretched in order to tax a transaction, which, had the Legislature thought of it, would have been covered by the appropriate words. It is also a well-sled principle of construction of a fiscal statute that one has to look merely at what is clearly said and there is no room for any intendment, there is no equity about a tax, there is no presumption as to a tax

1971 SCMR 128

PLD 1991 SC 870

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

and nothing is to be read in and nothing is to be implied and one has to look fairly at the language used....”

In another pronouncement in the case of Messrs Lucky Cement Factory Limited and others V. The Government of N.-W.F.P through Secretary Local Government and Rural Development Department, Peshawar and others4, the validity of loading and unloading tax/fee was determined by the apex Court while interpreting the corresponding provisions of the Khyber Pakhtunkhwa Local Government Ordinance, 2001. In that case too, the apex Court had ruled that taxing provisions of a statute were to be considered strictly and the intention to impose tax or duty must be shown by clear and unambiguous language. The provisions of Section 116 of the Ordinance ibid as well as the entries in 6th Schedule attached to the Ordinance did not contain any specific backing for the impugned loading and unloading tax charged by TMA, Lucky, therefore, said imposition was held to be bad in law. The relevant para of the referred judgment is reproduced below for the facility of reference.

“9. Next we take up the fee on loading and unloading of cement and minerals. This issue was taken before the High Court in the case of Messrs Cherat Cement Company Limited and Messrs Army Welfare Trust but has not been attended to. On the other hand, this appears to be the only question taken up before the High Court by Messrs Lucky Cement Factory Limited and Haji Muhammad Ramzan. Here too the Court had not

2013 SCMR 1511

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

examined the issue from the perspective of the petitioners but had dismissed the petitions on the ground that there was some memorandum of understanding arrived at between the transporters of goods and the Tehsil Municipal Council, Lucky Marwat, Mr. Muhammad Akram Sheikh learned Senior Advocate Supreme Court appearing for the respondents, contended that the loading and unloading fee is imposed upon the carriers of the cement and not on the manufacturers and thus the appellants have no locus standi to question the levy as they do not fall within the meaning of aggrieved persons Responding to the above contention, the learned counsel for the appellants submitted that notices for payment of the fee are being issued to the appellants and not to the truck owners. There is nothing on the record to resolve this factual controversy. However, we proceed to examine the question from the perspective of the appellant, Messrs Lucky Cement Factory Limited and the petitioner, Haji Muhammad Ramzan who allege that the fee is being recovered from them. Mr. Muzammil Khan, learned Advocate Supreme Court appearing on behalf of Nazim, Town Council and Town Municipal Officer, Nowshera (Civil Appeal No. 364 of 2011), submitted that the levy of such fee is justified under Item No.1 of Part III of the Second Schedule which provides for "local tax on services". When confronted, neither of the learned counsel for the respondents was able to show if any services were provided by the local council to the appellants for loading and F unloading or for the purpose of transporting cement or other material in trucks or other vehicles. It was feebly contended on behalf of the respondents that the Tehsil Council is to maintain the roads used by the carriers for transporting the material. If that be the justification, the fee cannot be limited to the trucks engaged in carrying out material but shall be charged on all vehicles using the roads. On behalf of Messrs Cherat Cement Company Limited it was pointed out that the appellant had constructed its own road to the Factory. Be that as it may, the Tehsil Council can impose taxes on services provided by it and not on services privately acquired. The learned counsel for the respondents has not been able to refer to any provision of the Ordinance or the Schedules which would legally justify the imposition of tax by the G Tehsil Council on activity such as loading and unloading of material or on their carriage.”

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

Likewise, in another judgment delivered by the House of Lords in the case of McCarthy & Stone (Development) Ltd. V. London Borough of Richmond Upon Thames5, it was held that no pecuniary burden, by whatever name it may be called, can be imposed except under clear and distinct legal authority nor obligation to pay charge can be made legal by agreement. It was further held that charge without legal authority is ultra vires and Local Government cannot charge for a service unless it is required by statute to provide such service and is also authorized by law to charge for such service.

6.Learned counsel representing the

respondent/TMA was also confronted with the petitioner’s assertion that the impugned tax was imposed upon him despite the fact that no facility whatsoever was being provided by the TMA in return. This fundamental objection, however, could not be met with any satisfactory explanation before this Court. It is worth noting that an identical controversy regarding the levy of tax/Adda fee on transporters had earlier come up for consideration before this Court in W.P. No.1167-M/2021 titled “Malik Muhammad Tahir Khan v. Government of Khyber Pakhtunkhwa and others.” In that case, while deciding the writ petition on 22.09.2022, this Court categorically held that the imposition of such fee was against the very spirit of

1994 SCMR 1993

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

Section 42(2) of the Khyber Pakhtunkhwa Local Government Act, 2013, and struck down a similar notification, allowing the petition. It may also be noted that the aforesaid petitioner, Muhammad Tahir Khan, had earlier instituted W.P. No.135-M/2014 on the very same issue as is involved in the present petition, which too was allowed by this Court on 14.07.2020. In that case, after an elaborate discussion on the validity of the tax/Adda fee levied from the said petitioner by the District Government, this Court allowed the writ petition and held as under:

“13. In the present case, the District Government (erstwhile Municipal Committee) has established the Bus stand and providing certain specific service to the owners of the vehicle who park their vehicle in the said Bus Stand for originating and terminating its journey and in lieu thereof, it charges adda fee which has a direct co-relation with the services offered by the District Administration, hence this adda fee is a fee simpliciter. Hence if any owner of the vehicle has his own arrangements of parking/establishment of Class-D Bus stand which has been established in in accordance with law, and the said vehicle do not use the Bus Stand of the Respondent, then the demand of District Administration for payment of said fee from the owners of Class-D Bus Stand or the vehicles is obviously without any lawful authority as the element of quid pro quo is altogether missing.”

The ratio of the above-referred judgments

squarely applies to the present case, further augmenting the petitioner’s grievance that the impugned demand is devoid of lawful authority.

7.In view of the foregoing discussion and the settled principles of law, the petition in hand is allowed and Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah

the impugned tax imposed upon the petitioner by the respondents is hereby declared to be illegal, without lawful authority and of no legal effect.

Announced Sd/- Dt:23.09.2025 JUDGE

Sd/-

JUDGE

Tajamul/CS | DB: Hon’ble Mr. Justice Sabit Ullah Khan Hon’ble Mr. Justice Qazi Jawad Ehsanullah