M/s Northern Bottling Company (Pvt) Ltd, Industrial Estate, Jamrud road, Peshawar through authorized person Vs The Federation of Pakistan through Secretary, Ministry of Defence, Islamabad & others

JUDGMENT SHEET

IN THE PESHAWAR HIGH COURT,

PESHAWAR

(Judicial Department)

1.W.P No. 4804-P/2021 (M/s Northern Bottling Company (Pvt) Limited, Industrial Estate, Jamrud road, Peshawar through authorized person v. The Federation of Pakistan through Secretary, Ministry of Defence, Islamabad & Others).

2.W.P No. 3085-P/2024 (M/s Total Parco Pakistan Limited v. Military Lands and Cantonment Department, Ministry of Defence, Government of Pakistan, Peshawar Region through its Director & another).

3.W.P No. 4805-P/2021 (M/s Northern Bottling Company (Pvt) Limited, Industrial Estate, Jamrud Road, Peshawar through authorized person v. Government of Khyber Pakhtunkhwa through Secretary Local Government, Election and Rural Development Department, Peshawar & Others).

4.W.P No. 2266-P/2021 (M/s Total Parco Pakistan Limited v. Government of Khyber Pakhtunkhwa through its Chief Secretary & Others).

5.W.P No. 1165-P/2023 (Askari Bank Limited, Regional Office, Saddar road, Peshawar Cantt v. Government of Khyber Pakhtunkhwa through Secretary Local Government, Election and Rural Development Department, Peshawar & Others)

6.W.P No. 3439-P/2022 (Iqra Public School, Shahdand (Tariq Mateen) & Others v. Government of Khyber Pakhtunkhwa through Secretary Local Government, Civil Secretariat, Peshawar & Others)

7.W.P No. 4548-P/2023 (M/s Delivery Hero Pakistan Pvt Limited through its Executive Supply v. Province of Khyber Pakhtunkhwa through Secretary to Local Government & Rural Development Department & Others)

8.W.P No. 4387-P/2023 (M/s Delivery Heroes Pakistan Private Limited through its Executive Supply v. Province of Khyber Pakhtunkhwa Federal Secretary to Local Government & Rural Development Department & Others)

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9.W.P No. 3156-P/2024 (M/s Total Parco Pakistan Limited v. Government of Khyber Pakhtunkhwa through its Chief Secretary, Civil Secretariat, Peshawar & Others) For petitioners Mr. Abdul Rauf Rohaila, Advocate For Respondents Mr. Ihsanullah, Advocate (Cantonment Board).

Mr. Bilal Khan, AAG (Provincial Govt.)

Mr. Ishaque Khalil, AAG (Federation).

Mr. Sabahuddin Khattak, (TMAs)

Assistance Dr. Mazhar Ali Khan, Sr. Research & Reference Officer

Date of hearing 10.12.2025

JUDGMENT

Dr. Khurshid Iqbal, J.-

First Set of Petitions

1.In this judgment, we are tasked with adjudicating various writ petitions that challenge the imposition of advertisement fees levied by different local authorities within the province of Khyber Pakhtunkhwa. The first set of petitions, specifically W.P No. 4804- P/2021 and W.P No. 3085-P/2024, contest the authority of the Cantonment Board to impose such fees. The petitioners assert that the demand notices issued by the respondents for payment of advertisement board fees are illegal and without lawful authority, arguing that these charges lack a proper legislative foundation under the Cantonment Act, 1924 (“Act of 1924”). They maintain that the respondents have failed to provide any services in return for the fees charged, as the demands are based solely on the publication of the petitioners’ names outside shops for identification purposes rather than for advertising.

2.Further, the petitioners contend that the respondents possess no inherent powers to impose such fees, asserting that the demands Page 2 of 26

constitute an abuse of authority and usurpation of legislative power. They argue that the charges are, in essence, a tax rather than a fee, as they do not correspond to rendering of any service (quid pro quo). The petitioners also emphasize their right to conduct business without undue burden, claiming that the imposition of these fees is discriminatory and violates their constitutional rights. In particular, W.P No. 3085-P/2024 highlights that the notices lack specific calculations or legal provisions justifying the alleged advertisement fees, and they assert that the Cantonment Board’s actions towards confiscating vehicles displaying their business name are unlawful and infringe upon their fundamental rights. The petitioners argue that the relevant laws do not authorize the collection of advertisement fees through contractors and that the demands were not preceded by the necessary legal processes, such as public notice and the opportunity for objections. The petitioners argue that they have no alternative remedies available and seek the court's intervention to declare the imposition of these fees unlawful.

Second Set of Petitions

3.The second set of petitions, namely, W.P No. 4805-P/2021, W.P No. 4548-P/2023, W.P No. 4387-P/2023, W.P No. 2266-P/2021, W.P No. 3156-P/2024 and W.P No. 3439-P/2022 (also like the first set of petitions), challenge the imposition of advertisement fees by local bodies, including the Town Municipal Administrations (“TMAs”) of Peshawar, Nowshera, and Haripur. The grounds for these challenges include claims of lack of legal authority under the Khyber Pakhtunkhwa Local Government Act, 2013 (“Act of 2013”), the failure to provide services commensurate with the fees charged, and the violation of constitutional rights as enshrined in Articles 4, 18, and 25 of the Constitution of the Islamic Republic of Pakistan, 1973 (“Constitution”).

4.In W.P No. 4805-P/2021, the petitioner contests demand notices issued for advertisement fees on shop boards and billboards, arguing that these fees lack legal authority under the Act of 2013. Whereas in W.P. No. 2266, the petitioner has challenged the levy for advertisement fee by different TMAs on the ground that the respondents have no authority to levy advertisement fee and that the imposition of such fee lacks the element of quid pro quo. Similarly, in W.P No. 4548-P/2023, the petitioner, operating under the name "foodpanda," questions a notice for advertisement fees levied on delivery bikes, claiming that they merely provide delivery services and are not engaged in advertising, thus, should not be liable for such fees. In W.P No. 4387-P/2023, the petitioner raises similar concerns Page 3 of 26

regarding notifications for advertisement fees, asserting that the fees are exorbitant and not supported by any legal framework. W.P. No. 3156-P/2024 focuses on the legality of the demands made by the TMAs, contending that the notices lack specificity and clarity regarding the types of advertisements and that they do not provide any services in return for the fees charged.

5.Furthermore, in W.P No. 3439-P/2022, a group of educational institutions challenges a contractor's notice demanding advertisement fees without specifying the nature or locations of the advertisements. In W.P. No. 1165-P/2023, the petitioner—a bank—contends that the display of it name outside its place of business does not amount to “taxable advertisement.” Its main argument is that the display in question is in compliance with the regulations of the State Bank of the Pakistan, and the Companies Act, 2017. Across these petitions, the common grounds include claims of lack of legal authority to impose such fees, failure to provide corresponding services, and violations of constitutional rights as enshrined in Articles 4, 18, and 25 of the Constitution. The petitioners collectively argue that the imposition of these fees is not only unlawful but also infringes upon their fundamental rights, and they seek the court’s intervention to declare the demands void and unenforceable.

Respondents’ Replies

6.In response to the first set of petitions, the respondents, which include the Cantonment Board and the Federal Government, assert their legal authority to impose advertisement fees under the Act of 1924. They argue that the fees are justified as they provide essential municipal services, including sanitation and maintenance, in exchange for the fees charged. The respondents contend that the petitioners’ claims regarding the lack of legislative foundation are unfounded, as the fees imposed are in accordance with established legal provisions. Furthermore, they maintain that the demands are not an abuse of authority but rather a legitimate exercise of their powers, emphasizing that the petitioners are utilizing public services and thus have an obligation to contribute to the maintenance and development of the community.

7.For the second set of petitions, the local government authorities while arguing along the same line, assert that they are empowered under the Act of 2013, to levy advertisement fees. They avow that the imposition of these fees is lawful and follows the requisite legal processes, including public notice and the opportunity for objections. In particular, they respond to the claims made by M/S Delivery Hero Pakistan Pvt. Ltd (foodpanda) by stating that the Page 4 of 26

petitioner's employees use “special and specified colour jackets and specific logos” while riding on their bikes, which clearly falls within the definition of advertisement as outlined in the Hoarding Policy dated 04.07.2012. The respondents emphasize that the fees are necessary for the provision of municipal services and that the petitioners have failed to utilize the available alternative remedies under the law. They reference the 2019 amendment to the Act of 2013, which empowers the Tehsil Council to levy such fees, and emphasize that they derive their authority from sections 2(ff), 18(b), 22(K), 30(C) & (H), 42, 43, 44, 45, and 46 of the Act, alongside the Khyber Pakhtunkhwa Local Government Taxation Rules, 2016 (“Rules of 2016”). They argue that the petitioners’ claims of discrimination and violation of constitutional rights lack merit, as the authorities operate within their legal framework and ensure the equitable application of fees across all businesses benefiting from municipal services.

Parties’ Arguments

8.In the proceedings before us, the petitioners’ counsel presented several compelling arguments challenging the imposition of advertisement fees. They asserted that the demand notices issued by the respondents are fundamentally flawed due to a lack of specific details concerning the sign boards, shutters, and stalls involved. The petitioners highlighted that the notices employ vague language, resulting in significant ambiguity regarding the exact locations and sizes of the advertisements in question. They maintained that the modes of advertisement mentioned in these demands do not conform to the legal definition of advertisement; instead, they serve merely as identifiers of their business premises without any intention of promoting goods or services. Furthermore, the petitioners argued that there is no legal basis for collecting advertisement fees through a contractor, questioning the validity of the respondents’ claims regarding the provision of services under the principle of quid pro quo, which they deemed insufficiently substantiated.

9.On the flip side, the respondents’ counsel vigorously defended the legality of the fees imposed. They contended that the demand notices do not require exhaustive detail, asserting that the authorities are fully empowered to levy these fees. They argued that sign boards, shutters, and stalls function as effective advertisements, actively attracting customers and promoting businesses. The respondents emphasized that the imposition of these fees followed all necessary legal procedures, including proper publication in the official gazette and the issuance of assessment schedules. They stressed that the municipal services rendered by the respondents—such as sanitation Page 5 of 26

and road maintenance—are integral to the community and warrant the collection of these fees. Additionally, the respondents pointed to section 112 of the Act of 1924, which authorizes the Board to engage contractors for fee collection, thereby legitimizing their actions.

Questions for Determination

10.From the respective contentions of the parties, the following core questions (the last two being common to all petitions) arise for determination:

(a)Whether the Respondents possess the requisite statutory competence to impose and levy the impugned advertisement fee upon the Petitioners?

(b)Whether any quid pro quo or corresponding service are exhibited by the Respondents in lieu of the advertisement fee?

(c)Whether the authority to collect advertisement fee can be delegated to private contractors or third parties?

(d)What is the true scope of 'taxable advertisement'?

Reasoning

11.We will first address the first set of petitions challenging the impugned notifications issued by the respondent Cantonment Board. It is pertinent to note that the Cantonment (Amendment) Act, 2023 (“Amendment Act, 2023”) was enacted in the year 2023. Consequently, W.P No. 4804-P/2021 was filed prior to the promulgation of the Amendment Act, 2023 (“old legal framework”), whereas W.P. No. 3085-P/2024 was instituted following the enactment of the amended law (“new legal framework”). However, it is important to note that the petition filed under the new legal framework challenges a notice dated 02.05.2024, issued by the Cantonment Board D.I. Khan, demanding payment of advertisement charges for two tax years: 2022-23 and 2023-24. This includes one year falling under the old legal framework and the other under the new legal framework. Therefore, we propose to discuss these petitions separately, in accordance with the applicable legal framework for each.

Tax v. fee

12.Before addressing the petitions on merits, it is essential to distinguish between the nature of a tax and a fee in light of the jurisprudence that has developed thus far. In Collector of Customs v. Sheikh Spinning Mills [1992 SCMR 1402], the Supreme Court clarified the distinction between a tax and a fee, holding that a tax is Page 6 of 26

a “compulsory exaction” for public purposes and not a payment for services rendered. Conversely, a fee is a charge for a “special service” provided to individuals. The key difference is that taxes are levied as a common burden, while fees confer specific benefits to the payee. Without a clear earmarking for services, a fee may be deemed a tax. This crucial distinction was subsequently re-affirmed in the cases of Government of N.W.F.P. v. Rahimullah [1992 SCMR 750] and Muhammad Ismail v. Chief Cotton Inspector [PLD 1966 SC 388]. In Federation of Pakistan v. Durrani Ceramics [2014 SCMR 1630], the Court drew the distinction between the fee and tax as follow: Whereas ‘tax’ is a common burden for raising revenue and upon collection becomes part of public revenue of the State, ‘fee’ is exacted for a specific purpose and for rendering services or providing privilege to particular individuals or a class or a community or a specific area. However, the benefit so accrued may not be measurable in exactitude. So long as the levy is to the advantage of the payers, consequential benefit to the community at large would not render the levy a ‘tax.’ [Underlining is ours] 13. Based on the above reasoning, it can be stated that while a tax does not require a corresponding service, whereas a fee is charged for services rendered (i.e., quid pro quo). This distinction has also been made by the Supreme Court of India in Hingir Rampur Coal Company Ltd. v. State of Orissa [AIR 1961 SC 459] as below: The neat and terse definition of Tax which has been given by Latham, C.J., in Matthews v. Chicory Marketing Board (1938) 60 C.L.R. 263 is often cited as a classic on this subject. A “Tax”, said Latham, C.J., “is a compulsory exaction of money by public authority for public purposes enforceable by law, and is not payment for services rendered”. In bringing out the essential features of a tax this definition also assists in distinguishing a tax from a Fee. It is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess levied by way of Fee is not intended to be, and does not become, a part of the consolidated fund. It is earmarked and Page 7 of 26

set apart for the purpose of services for which it is levied. [Underlining is ours]

14.Similarly, the Supreme Court of India in Kewal Krishan Puri vs. State of Punjab [AIR 1980 SC 1008] with reference to what constitute a services rendered for charging a levy, held as follow: But there may be cases where, as in the instant one, the licence fee charged by way of regulatory measure is not exorbitant or excessive. But the other kind of fee charged has got to be justified on the ground of existence of sufficient quid pro quo between the payer of the fee and the authority charging it. In such a case from a practical point of view it may be difficult to find out with arithmetical exactitude as to what amount of fee has gone in incurring the expenditure for the services. But, broadly speaking, a good and substantial portion of it must be shown as being spent for the services rendered. [Underlining is ours]

15.It is an established position that a fee is distinct from a tax based on the element of quid pro quo. It is also well settled position in law that fiscal and charging statutes are to be strictly construed. No Government or Authority can compulsorily extract money from any class of person either in the form of tax, fee, charge or levy; unless specifically authorized under the law. In this regard, Articles 77, 162 and 163 of the Constitution assumes significance as they affirm the necessity for clear legislative authority in matters of taxation. Article 77 mandates that no tax shall be levied for the purposes of the Federation except by or under the authority of an Act of Majlis-e- Shoora (Parliament), establishing the principle that taxation requires explicit legislative backing. Article 162 further emphasizes that any bill imposing or varying a tax that affects provincial interests must receive prior sanction from the President, ensuring that provincial rights are protected in matters of fiscal policy. Lastly, Article 163 allows provincial assemblies to impose taxes on professions and trades, provided they operate within limits set by federal law. Collectively, these provisions safeguard the notion that any imposition of financial obligations must be grounded in clear and specific legal authority.

First set of petitions: old cantonment law

16.With the above constitutional and legal backdrop, we will now examine the petitions in the context of the old legal framework. To facilitate this analysis, we refer to the charging section of the un- amended Act of 1924, which is reproduced below for ease of reference:

[60. General power of Taxation. (1) The Board may, with the previous sanction of the [Federal Government], impose Page 8 of 26

in any cantonment any tax which, under any enactment for the time being in force, may be imposed in any municipality in the Province wherein such cantonment is situated:

(2)Any tax imposed under this section shall take effect from the date of its notification in the [official Gazette].]

17.This legal framework delineated the process through which taxes could be imposed by the Cantonment Board, as outlined in Section 60, which mandated that any tax must be authorized by the Federal Government, ensuring there was no unilateral imposition of fees or taxes without oversight. Section 61 required the Cantonment Board to publish notices detailing the proposed tax, including its nature, the liable parties, and the applicable rates. Additionally, Section 62 provided that any inhabitant of the cantonment could submit objections to the proposed tax, ensuring that the Board had to consider these objections before finalizing its proposals.

18.The imposition of fees under the aforementioned provisions has been subjected to judicial scrutiny in various cases. In Rajkumar v. Hyderabad Cantonment Board [2006 MLD 549], the court examined the validity of a parking fee levied on commercial vehicles by the Cantonment Board Hyderabad. It was held that no tax, toll, or fee could be imposed by any government agency without appropriate legislative authority. The court determined that the Cantonments Act, 1924 did not empower the Board to charge parking fees, making such levies unlawful. It also stated that the exclusive powers granted to the Cantonment Board to impose fees for specified purposes could not be exercised by any other entity, including the Executive Officer. This principle was reiterated in Munuwar Younus and others v. Karachi Cantonment Board [2011 MLD 1006], where the Sindh High Court similarly declared a fee invalid due to lack of legislative backing. The Supreme Court upheld the judgment of Sindh High Court rendered in Rajkumar (supra) in Hyderabad Cantonment Board v. Raj Kumar and others [2015 SCMR 1385], confirming that all fees or taxes must be based on clear statutory provisions to be enforceable. It was also held that Cantonment Board has no authority to enlarge the scope of charging section and include, conjecture and or read some activity which is not envisioned or is not the contemplated by the charging section 200 of the Act of 1924. The ratio of Hyderabad Cantonment was later on followed in Bank of Khyber v. Municipal Corporation Gujarat [2021 CLD 340], wherein the Lahore High Court held: [...] the matter in issue essentially is with respect to the authority of the Cantonment Board to levy advertisement fee which matter has been decided by the august Supreme Court of Pakistan. Therefore, the Cantonment Board has no authority to levy fee in relation to the boards installed by the Page 9 of 26

Petitioners at their offices/branches and reliance on section 282 of the Cantonment Act is misconceived.

19.Now, we proceed to examine the impugned notices issued by the Respondent Cantonment Board in W.P No. 4804-P/2021. The petitioners received two notices, bearing No. 349 dated 03.05.2021 and No. 019, dated 06.05.2021, from the Contractor of Advertisement Fee. The petitioners challenge these notices and in the other petition on two primary grounds: first, that the Cantonment Board lacks the statutory authority to impose an advertisement fee; and second, that the powers of the Board cannot be delegated to a private individual or contractor, as such authority is reserved for the officers of the Board. Regarding the first ground, we find merit in the petitioners’ contention. The Cantonment Board did not possess the statutory authority at the relevant time to levy an advertisement fee, as defined under Section 60 read with Section 200 of the Act, in light of the principles established in the judgments of Hyderabad Cantonment (supra), Rajkumar (supra), Munuwar Younus (supra), and Bank of Khyber (supra). The Cantonment Board cannot extend the scope of the charging provisions beyond what is explicitly provided in the law. To do so would contravene the principle that taxing statutes must be construed strictly, and any ambiguities must be interpreted in favor of the taxpayer. Accordingly, to the extent of instant petition question (a) is answered in negative.

First set of petitions: new cantonment law (post-2023) 20. Turning now to the W.P No. 3085-P/2024 instituted after the enactment of the amended law (under the new legal framework). A contractor for advertisement fees issued a notice dated 02.05.2024, demanding payment of advertisement charges for two tax years: 2022-23 and 2023-24. A bare perusal of the Amendment Act, 2023 shows that the said Act got the assent of the President of Pakistan on 5th August, 2023. It is an established position that retrospective application of law cannot be made unless specifically provided for, particularly in tax cases. Commissioner Inland Revenue v. National Public Welfare Society [2025 SCMR 1073]. It is equally true that legislature has the power to legislate retrospectively but the same must be expressly provided. Commissioner Inland Revenue v. Mekotex [PLD 2024 SC 1168]. For ease of reference the relevant provisions of the newly substituted section 60 of the Act of 1924 is reproduced below:

[60. Power to levy taxes, etc.-(1) The Board may, with the previous sanction of the administrative division, impose in a cantonment any or all the taxes, fees, tolls and charges as specified in the Schedule VII.]

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(2)Any tax imposed under this section shall take effect from the date of its notification in the [official Gazette].

21.The above provisions as well as the Amendment Act, 2023 shows that no retrospective effect has been given to the charging provisions. On this score coupled with the principles laid down in National Public (supra) and Mekotex (supra), the levy of advertisement fee for the tax period 2022-2023 comes within the old legal framework. Therefore, we hold that the Cantonment Board did not possess the authority to levy advertisement fee at the relevant time. So far as the tax period 2023-24, the same squarely falls within the new legal framework. After the substitution of section 60 of the Act of 1924, Schedule VII has also been inserted to the Act. The relevant entry (r) is reproduced below:

(r)fee for regulation of advertisement through sign boards, hoardings, cutouts, neon-signs, pole signs, sky signs and boards, billboards, directional boards, banners, streamers, moppy signs, temporary advertisement structures and stalls, posters, oneway visions, hot air balloons and blimps, moving vehicles, electronic display screens including light emitting diode (led) and surface mounted device (smd), etc.

22.The relevant provisions of the newly substituted Section 60 of the Act of 1924 grant the Board the authority to impose any or all taxes, fees, tolls, and charges as specified in Schedule VII. However, it is important to note that under the old legal framework, particularly in light of the case law discussed earlier, the Board did not possess the authority to levy advertisement fees. The judgments in cases such as Rajkumar (supra) and Munuwar (supra) have established that any imposition of fees must have clear legislative backing. As we consider the tax period for 2023-24, it is evident that this period falls squarely within the new legal framework. The amended provisions now empower the Board to levy advertisement fees, which are clearly defined in Schedule VII. However, the notice issued by the Board is generic in nature and lacks specific details regarding the advertisements; it merely refers to “detail of advertisement/publicity of the product/item through the display of board.” This vagueness fails to meet the legal requirements, as it has been consistently held that charging provisions should be interpreted strictly.

23.Even otherwise, the imposition of a fee under the new legal framework must satisfy the test of quid pro quo—a reciprocal service rendered by the authority in exchange for the levy. It is undisputed that the Cantonment Board acts as a municipal authority well within its statutory domain to provide civic amenities and regulate public spaces. Under Section 116 (Duties of Board) and Section 117 of the Act of 1924, the Board is expressly empowered to execute municipal Page 11 of 26

functions, including the lighting and watering of streets, maintenance of public safety, and regulation of dangerous or offensive structures. The Respondents contend that they are actively discharging these statutory obligations and that the element of quid pro quo is satisfied not through a direct, individual service to each taxpayer, but through the provision of these broad municipal services to the community at large. They argue that the regulation of advertisements ensured through the powers vested in Sections 186 to 190 regarding streets and buildings creates a regulated, safe, and maintained environment that indirectly benefits the petitioners by enhancing the visibility and commercial value of their displays, thereby justifying the levy as a fee for services rendered to the collective public interest. Accordingly, question (b) is decided in affirmative.

24.Thus, we find the notice issued for the tax period 2022-23 to be unlawful due to the lack of authority under the old framework. As for the tax period 2023-24, given that the Board now possesses the authority to levy such fees, it may issue fresh notices that include the necessary details and specific particulars regarding the advertisement charges, ensuring compliance with the legal framework established by the Act of 1924. Accordingly, question (a) to the extent of tax period 2022-23 is answered in negative, whereas to the extent of the tax period 2023-24 in affirmative.

Second set of petitions: Act of 2013

25.Turning to the second set of petitions, we note that the petitioners challenge the imposition of advertisement fees by local bodies, including the TMAs of Peshawar, Nowshera, and Haripur. These petitions can be categorized into two distinct groups. The first group includes those petitions that contest the advertisement fees imposed under the Act of 2013, specifically concerning the affixation of sign boards and other advertisements at fixed locations. The petitioners in these cases assert that the local governments lack the necessary legal authority to impose such fees and that the fees do not correspond to any services rendered, thereby failing to meet the principle of quid pro quo. The second group comprises petitions that challenge the imposition of advertisement fees on delivery bikes operated by companies such as “foodpanda” and vehicles fuel checking vehicles carrying name, logo and trademark. The petitioners in these cases argue that their business activities are solely focused on providing delivery services and do not constitute advertising in the traditional sense. They maintain that the fees levied on their delivery bikes are unjustified and that the notices lack the necessary specificity and clarity regarding the charges. As we proceed, we will examine the Page 12 of 26

arguments and legal standings of each category in detail to determine the validity of the challenges presented.

26.Moving forward, we shall examine Act of 2013, under which these fees are levied in order to determine the legality and enforceability of the advertisement fees in question. Section 42 of the Act of 2013 as amended in 2019 empowers a local government to impose, notify and enforce tax specified in the Third Schedule. For ease of quick reference, the provision is reproduced below:

42.Imposition, notification and enforcement of Taxes. -

(1)A local government subject to the provisions of any other law may, and if directed by Government shall, levy all or any of the taxes and levies specified in the Third Schedule.

(2)No tax shall be levied without previous publication of the tax proposal inviting and hearing public objections and approval of the respective local council.

(3)A local government may reduce, suspend or abolish a tax.

(4)Where a tax is levied or modified, the local government shall specify the date for the enforcement thereof, and such tax or the modification shall come into force on such date.

(5)Government shall have power to direct a local government to levy any tax, increase or reduce any such tax or the assessment thereof and suspend or abolish the levy of any tax’’.

Item 11 of Third Schedule is as follows:

“Fee on all types of advertisements including bill-boards other than on radio and television.”

27.No doubt, Section 42 of the Act of 2013 empowers the local government to impose fee listed in the Third Schedule, including “Fee on all types of advertisements including bill-boards other than on radio and television” under Part I, Item No. 11. This provision grants express authority to the local governments to impose such taxes, subject to compliance with the procedural safeguards stipulated therein, namely, publication of the proposed tax, invitation and consideration of public objections, and approval by the respective local council. The Rules of 2016 framed under Section 112 of the Act of 2013, further elaborate this process: Rule 3 mandates formulation of a preliminary taxation proposal; Rule 4 requires issuance of a public notice inviting objections and specifying enforcement dates; Rule 5 prescribes the mechanism for hearing and recording objections by the Finance Committee; and Rules 6 to 8 provide for council approval through resolution and post-sanction publication. These procedural requirements ensure that taxation measures are adopted transparently and with due public participation.

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28.It is pertinent to mention that the petitioners have assailed the validity of the impugned notices primarily on three grounds: first, that the notifications were issued in violation of the mandatory procedural requirements prescribed under Section 42 of the Act of 2013, and the Rules of 2016; second, that the fee has been imposed without the provision of any corresponding service by the respondents, as envisaged under Part I, Item No. 11 of the Third Schedule to the Act of 2013; and third, that the respondent has no authority to collect the impugned levy through contractor or third party.

29.As regards the first ground that the mandatory legal requirements were not fulfilled in the issuance of the impugned notices, a careful examination of the impugned notifications, when read in conjunction with the comments submitted by the respondent TMAs, indicates that the procedural requirements stipulated under Section 42 of the Act of 2013, read with Rules 3 to 8 of the Rules of 2016, have been substantially complied with. The comments submitted by the respondents shows that the tax proposals were formulated following a review of the financial position of the respective local governments, and that public notices were issued, inviting objections and suggestions from inhabitants. Moreover, the Finance Committees reportedly conducted hearings of objections and finalized proposals in light of public input, where after the same were approved by the respective Tehsil Councils through formal resolutions. The record further reveals that the finalized fee schedules were subsequently notified for enforcement. Although the impugned notifications themselves do not fully detail these procedural steps, the documents annexed to the comments reflect that the required process, including public participation and council approval, was followed in substance. Accordingly, at this stage, there appears to be no conclusive material to hold that the procedural requirements under the Act and the Rules were disregarded. Hence, the stated objection is overruled. In this way question (a) is decided in affirmative.

30.Turning to the second ground of challenge, the petitioners assert that the imposition of advertisement fees by the local governments lacks the provision of any corresponding services, as required by the principle of quid pro quo. However, it is essential to recognize that it is not necessary for the corresponding services to be exactly measurable. The distinction between a tax and a fee has been clearly articulated by the Supreme Court in Durrani Ceramics (supra), where it was held that a “tax” is a common burden for raising revenue that becomes part of the public revenue of the State, while a “fee” is exacted for a specific purpose and for rendering services or providing privileges to particular individuals or communities. The court further clarified that so long as the levy provides some advantage to the Page 14 of 26

payers, the consequential benefit to the community at large does not transform the fee into a tax. This principle aligns with the Supreme Court of India’s ruling in Hingir Rampur (supra), which emphasizes that a fee is charged for services rendered, and while the exact amount of service may be challenging to quantify, a substantial portion must be shown to be expended for the services provided.

31.In this context, the respondents contend that they are providing various municipal services, including the maintenance of roads and streets, cleanliness, sanitation, and street lighting. These services are not necessarily intended for the petitioners alone but should be quantified in terms of their benefit to the community at large. The local governments and the respondents possess the authority to impose advertisement fees as outlined in the Act of 2013, particularly under Section 42, which empowers local governments to levy taxes and fees as specified in the Third Schedule. The relevant entry (Entry 11) explicitly includes fees on all types of advertisements. Thus, the respondents are acting within their legal competence in imposing these fees, fulfilling the statutory requirements and ensuring that the services provided are in line with the provisions of the law. Therefore, the claim that the imposition of advertisement fees lacks a corresponding service is not substantiated, and we hold that the local governments are indeed competent to levy such fees as prescribed by the applicable laws. Consequently, question (b) is decided in affirmative. We shall discuss the last ground—collection of fee through contractor or third party—in the last part of this judgment.

32.Coming now to the impugned notices challenged in the first category of petitions, in W.P. No. 4805-P/2021, the respondents have issued three generic bills/notices, namely No. 2002, 2162, and 3279, none of which bear a date. In light of our findings above, there is no dispute regarding the proposition that the respondents, including the TMA and local governments, are competent to levy fees in accordance with Section 42 read with Item 11 of the Third Schedule of the Act of 2013. However, concerning the legal standing of the impugned notices, their generic nature and the absence of essential particulars regarding the placement, location, and size of the billboards/signboards render them legally insufficient. Consequently, the notices are struck down. However, the respondents may issue fresh notices in accordance with law.

33.In W.P. No. 2266-P/2021, the petitioners have challenged various notices of different dates issued by the respondents, including the TMAs of Town-I, Town-II, Town-III, Town-IV Peshawar, Nowshera, Khanpur, Mardan, Takhtbhai, Jehangira, Razar, Baffa Pakhal, Karak, Daggar Buner, Haripur, and Batkhela. The petitioner, a public limited company operating under the name M/S Total Parco Page 15 of 26

Pakistan Limited, is one of the leading entities engaged in the marketing of petroleum products. The record indicates that all procedural formalities for the levy of the fee, as discussed earlier, have been duly complied with. Unlike the notices mentioned in the preceding paragraph, the impugned notices contain all necessary particulars regarding the place, location, height, size, length, and quantity of poles/boards. Therefore, these notices cannot be classified as generic and are validly issued within the framework of Section 42 read with Item 11 of the Third Schedule of the Act of 2013. Consequently, the notices do not warrant interference.

34.In W.P. No. 1165-P/2023, the petitioner-bank has challenged the advertisement fee on the grounds that the display of its name outside its place of business does not fall within the definition of “taxable advertisement.” The petitioner argues that this display is conducted in accordance with the regulations of the State Bank of Pakistan and the Companies Act, 2017. The petitioner has relied on this Court’s judgments in W.P. No. 2135-P/2016 dated 07.02.2018, titled “Bank Alfalah Ltd. v. Federation of Pakistan” and W.P. No. 123-P/2018 dated 28.04.2020, titled “The Bank of Khyber v. Federation of Pakistan.” This particular contention brings us to question (d) which needs analysis within two different perspectives: first the display of name, logo, trademark etc. as a legal requirement; second, display as identification, and display as identification-cum- promotion. Turning to the first perspective, “display as a legal requirement,” in the cases of Bank Alfalah (supra) and Bank of Khyber (supra), this Court has categorically held that since the banks are public limited companies and the Companies Act, 2017 requires a company to display their names in conspicuous manner on the place of their business, therefore the signboards on the business place of the banks are not covered under the definition of advertisement. This issue also came before various high courts. Interestingly, all the courts are unanimous on the point that the mandatory display of name at business places by the banks does not comes within the definition of advertisement. See MCB Bank Limited v. Province of Punjab [2024 CLD 418 Lahore]; Habib Bank Limited v. Azad Government of the State of Jammu and Kashmir [2015 PTD 1757 AJK]; Dubai Islamic Bank Pakistan Ltd. v. Federation of Pakistan [2014 MLD 957 Lahore]; & The Bank of Khyber v. Municipal Corporation Gujrat [PLD 2021 Lahore 108].

35.In order to evaluate the second perspective “display as mere identification” and “display as identification-cum-promotion,” we need to delve into the concept and dictionary meaning of the term “advertisement”. According to the New Encyclopaedia Britannica, Vol. I, advertising is defined:

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“advertising”, as [1] the techniques used to bring products, services, opinion, or causes to public notice for the purpose of persuading the public to respond in a certain way toward what is advertised. Most advertising involves promoting a good that is for sale, [2] but similar methods are used to encourage people to drive safely, to support various charities or to vote for political candidates, among many other example.

36.Similarly, the Chambers Dictionary defines “[a]dvertisement” as “the act of advertising; a public notice with the purpose of informing and/or changing public attitudes and behaviour; a short performance recorded for radio. T.V. etc. to advertise goods and service; news.”

37.The above dictionary definitions reflect that: firstly, advertisement is an informational technique to persuade public in order that the public respond to it in a certain way as regards the content of the information. The information may be circulated through various means, such as, radio, T.V., newspapers and billboards. The word “persuade” may be emphasized here, which may, in the context of trade and commerce, be interchangeably understood as “promotion”. In contemporary context, in addition to the traditional media, such as radio, T.V., newspapers, and billboards, business concerns also use social media, for example, apps, search engines, etc. Advertisements through media is liable to payment of charges by the media owners. The use of public space for it is also chargeable by the local official or semi-official authorities managing and controlling the public places under relevant laws. So, billboards installed in a public place are permitted subject to payment of fee levied by the municipal authorities.

38.Advertisement being subject of litigation, courts have offered its definitions in given facts and circumstances of cases. According to Black’s Law Dictionary “Advertising: (1). The action of drawing public’s attention to something to promote its sale. 2. The business of producing and circulating advertisement” (emphasis added) [The Black’s Law Dictionary, 9th Ed, 2009, p. 63]. In the same vein, P. Ramanatha Aiyar’s the Law Lexion [Law Lexicon, 2nd Ed. 2002], defines advertisement as:

“Advertisement” Notice given in a manner designed to attract public attention; information communicated to the public, or to an individual concerned, by means of hand bills or the newspaper. The meaning of the word is not however confined to notices printed in newspapers (Comm. v. Hooper, 5 Pick. Mass. 42).

39.It is, however, arguable whether mere attraction of public attention, as the above definition states, is sufficient for understanding the legal concept of advertisement vis-à-vis payment of fee for it. This Page 17 of 26

is the specific question in the facts of the case before us. We shall proceed to review the jurisprudence to search for an answer to our question.

40.What is “taxable advertisement” itself needs legal and technical analysis. First, it has to be ascertained that the display of name or board is a statutory compliance, not a commercial choice. Second, the “Plus Factor” has to be seen or it is to say that the immunity or exemption is lost if the signboard goes beyond simple identification. For instance, a sign board saying “ABC Bank” is exempt because it only depicts simple identification. But when a sign board saying “ABC Bank - Best Loans @ 5% Interest” becomes an advertisement and is taxable. Moreover, it is also a settled position as enunciated in Soneri Bank Limited vs Province of Punjab [PLJ 2020 Lahore 239] that “Even otherwise, the signboards required to be installed by the Banks under the terms of Companies Act, 2017 and the Policy of State Bank of Pakistan are exempt from advertisement tax. The Punjab Local Government Act, 2017 being a provincial law must yield to and cannot override the provisions of a federal statute... Banks are entitled to install any signboard/signage outside their premises in terms of Companies Act, 2017... without being liable to pay any advertisement fee...”

41.While following the ratio laid down in the case law referred above, we, too, are inclined to hold a view that since it is the statutory requirement under section 22 of the Companies Act of displaying name outside the business place, therefore, such signboard, billboard etc. does not comes within the definition of advertisement and thus cannot be treated as taxable advertisement for the purpose of section 42 read with item 11 of the Third Schedule of the Act of 2013. Accordingly, the impugned Notice dated 06.02.2023, 01.11.2022 and 17.03.2023 issued by respondents No. 3, 4 and 5, respectively, are hereby struck down as being without lawful authority. Thus, question (d) is decided accordingly.

42.We now turn to W.P. No. 3439-P/2022. The petitioners— private schools affiliated with the Board of Intermediate & Secondary Education, Peshawar (“BISE”)—challenge notices issued by local authorities and TMAs demanding advertisement fees for name boards and banners affixed outside their premises. The petitioners contend that they stand on equal footing with the banking sector, relying on the ratio laid down by this Court in Bank Alfalah (supra), Bank of Khyber (supra), and the judgment dated 22.03.2018 (W.P. No. 208- A/2017). They argue that because the display of their name is a regulatory requirement of BISE, it constitutes a statutory obligation rather than an “advertisement,” and thus should be exempt from the impugned fee.

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43.We have examined the regulatory landscape relied upon by the petitioners. While the petitioners did not annex specific rules, our examination of the “Obligatory and Supplementary Norms and Standards” (dated 12.03.2020) issued by the Khyber Pakhtunkhwa Private Schools Regulatory Authority and the “Guidelines for Institute Registration” issued by BISE Peshawar reveals a distinct factual position. Paragraph 6(ii) of the Norms requires the display of fee structures, preferably on panaflex, while BISE guidelines suggest affixing boards not just on the building, but “near the road adjacent to the school.” Unlike the strict textual mandate of Section 22 of the Companies Act, 2017—which restricts corporate entities to a nameplate for identification—the directives applicable to private schools encourage displays that are promotional in nature (e.g., fee structures, admission banners) and often encroach upon or utilize the visual easement of public roads.

44.Consequently, the case of private schools is legally distinguishable from that of the banking sector on two critical grounds. First, the exemption granted to banks in Soneri Bank (supra) was predicated on the supremacy of a Federal Statute (The Companies Act) over provincial local government laws; here, both the regulatory body (PSRA/BISE) and the taxing authority (Local Government) operate under the same Provincial legislative sphere, meaning no such supremacy exists to oust the taxation power. Second, the nature of a private school’s signage—often displayed on “panaflex” and placed strategically near roads to attract admissions—possesses an inherent commercial character distinct from the passive identification required of a bank branch. Mere compliance with a regulatory directive to display a name does not automatically transmute a commercial advertisement into a non-taxable statutory duty, especially when the display utilizes public space or targets a consumer base. Therefore, the local authorities are well within their jurisdiction to levy the advertisement fee, and the immunity claimed by the petitioners is misconceived. So far as the notices issued by the respondents, perusal of the same would show that the notices are generic in nature lacking full particulars regarding place, location, size, length and quantity. Therefore, the impugned notices are struck down. However, the respondents are at liberty to issue fresh notices in accordance with law to the petitioners. Thus, question (d) is decided accordingly.

45.Turning to W.P No. 4548-P/2023, wherein the petitioner, operating under the name “foodpanda,” challenges a notice dated 09.09.2023 for advertisement fees levied on delivery bikes, claiming that they merely provide delivery services and are not engaged in advertising, thus, should not be liable for such fees. Similarly, in W.P No. 4387-P/2023, the petitioner has challenged notifications dated Page 19 of 26

27.05.2019 and 01.12.2022 for advertisement fees, asserting that the fees are exorbitant and not supported by any legal framework. In W.P No. 3156-P/2024, the petitioner challenges notices dated 28.09.2023 and 15.05.2024 on the ground that under the OGRA Rules, regulations, instructions, the Petitioner-Company has to mention its trade mark, registered name, logo on the fuel checking vehicles for identification purposes, therefore, the vehicles of the petitioners do not come within the ambit of advertisement.

46.As discussed earlier, for assessing the taxability of each tangible item—whether it is a signboard, billboard, vehicle, or name board—it must pass the test of serving promotional purposes rather than mere identification. If the name, logo, or trademark is used solely for identification and does not indicate the promotion of a business, it cannot be taxed as an advertisement. With this in mind, we will first address the issue of delivery services through branded motorbikes operated by the petitioners. It is beyond question that the respondents or local governments lack the authority to levy such fees. However, the petitioners contend that their trademark and logo are used for identification and security purposes. The respondents have failed to provide any evidence that these displays are intended to promote their business. The test is straightforward: if the motorbikes display the logo and trademark of “foodpanda” solely for identification purposes, then they should not be subject to advertisement fees. Reference may be made to this Court judgment in M/s R-SC Internet Services Pakistan (Pvt.) Ltd. v. Government of Khyber Pakhtunkhwa [2024 YLR 2808]. Conversely, if the vehicles are wrapped in bright promotional colors and feature specific product images, slogans, prices, or calls to action (e.g., “Order Now for 50% Off” or “Buy One- Get One Free”), this shifts the display from “identification” to “mobile advertisement.”

47.In this context, a review of the impugned notice and the notifications reveals that the notice is generic in nature and does not reference any specific promotional aspects of the alleged advertisement. Therefore, the notice is struck down. However, the respondents are at liberty to reassess the petitioners’ delivery bikes, and if they convey any impression of promotional advertising, they may issue new notices accordingly. Question (d) is decided accordingly.

48.So far as the petitioner in W.P. 3156-P/2024 is concerned, they have not provided supporting documentation, particularly the rules or regulations of OGRA that require the display of the name, logo, and trademark on fuel-checking vehicles. However, the fundamental test for differentiating between identification and advertising, as established in the preceding paragraphs, is equally applicable to this Page 20 of 26

case. Upon reviewing the documents submitted by the petitioner, especially the images of their vehicles, it becomes evident that these vehicles display more advertising slogans than mere identification, such as “Your Assurance, Our Expertise” alongside the company name and logo. Such slogans clearly fall within the promotional category. Therefore, we are not inclined to accept the petitioner’s assertion that the display of their trademark or slogan is solely for identification purposes. Regarding the impugned notices, they are found to be generic in nature and lacking in essential particulars. Consequently, the notices are struck down. The respondents may issue fresh notices that include the necessary details and specific particulars. Question (d) is decided accordingly.

49.Reverting now to question (c) the common ground germane to all these petitions that the respondent’s whether it be the Cantonment Board or the Provincial local authorities cannot delegate their powers of collecting advertisement fee to the contractor or a third party. In this regard, we have gone through the case law. In the cases of Dubai Islamic Bank Pakistan Ltd. v. Federation of Pakistan [2014 MLD 957 Lahore]; Messrs Coca-Cola Beverages v. Cantonment Board Chaklala [2011 MLD 1987]; and Muhammad Munir Abdullah v. Tehsil Municipal Administration [2010 YLR 2543 Lahore] the issue under the Act of 1924 came for adjudication. The Courts ruled that the Cantonment Board cannot enter into contract under section 112 of the Act, however, the collection of fee and taxes is not the purpose of the Act. On these grounds, the Courts declared such delegation of powers or collection of fee through contractors unlawful. Similarly, in Messrs Coca Cola Beverages Pakistan Limited v. City District Government, Rawalpindi [2014 CLC 1135 Lahore], the Court ruled that contractors were not under the administrative control of Nazim, therefore notices for demand of advertisement fee issued by them were without lawful authority.

50.We have also come across another judgment Shell Pakistan Limited, Karachi v. Capital Development Authority [PLD 2015 Islamabad 36], wherein the Court in respect of Capital Development Authority Ordinance,1960 held that the Contractor has been merely assigned the role of collecting the fees on behalf of authority without any discretionary powers. It is further held that such assignment of this specific role does not contravene the principle of delegatus non potest delegare (one to whom power is delegated cannot himself further delegate that power) and “is merely interchangeable to endeavor of deregulation”. Similarly, it noted that “where a ministerial function is assigned to a private person” grounded in the common law principle of qui facit per alium facit per se (He who acts through another does the act himself), “therefore, status of such Page 21 of 26

repository is equivalent of the functionary who was originally delegated the function by the statute and any grievance in this regard can be got redressed from Appellate authority.”

51.Unlike, section 112 of the Act of 1924, we have the Khyber Pakhtunkhwa City Tehsil Local Government Rules of Business, 2022 framed under section 112 of the Act of 2013. Rule 11 provides for the function of the Tehsil Municipal Officer, and one of the functions, inter alia, under sub-rule (e) is “to exercise powers on matters related to revenue generation, auctions of contracts of own sources in the Tehsil Municipal Administration as specified in part I of Third Schedule of the Act.” This clause specifically gives the powers to auction or to enter into a contract in respect of the matters as specified in third Schedule which also include, inter alia, fee on advertisement.

52.The primary legal question arising from these contentions is whether the collection of a fee or tax through a contractor constitutes an unlawful delegation of statutory power. We find this contention unsustainable for two reasons. First, a distinction must be drawn between the delegation of discretionary power (such as determining liability or the rate of tax) and the assignment of ministerial functions (such as the physical collection of a pre-determined amount). As held in Shell Pakistan Limited (supra), the contractor or third party tasked with the collection of taxes or fees acts merely on behalf of the original authority, performing a mechanical or “robotic” function rather than exercising sovereign authority. Secondly, it is essential to recognize that such contractors are not decision-makers regarding the liability or quantum of the fees; rather, they serve as collection agents responsible for executing a predetermined collection process. The principle in Shell Pakistan Limited (supra) was also followed by this Court in Zia Ullah v. Government of Khyber Pakhtunkhwa [2022 MLD 1705 Peshawar], which affirms the distinction between assigning ministerial duties and delegating discretionary powers. In this context, it is not uncommon for fees or taxes to be collected by third parties or withholding agents. For instance, the Pakistan Television (PTV) fee is collected through electricity bills by electricity companies. Moreover, various private entities routinely undertake such ministerial functions, including Telecom/Mobile Companies collecting Advance Income Tax and Sales Tax on recharges/bills, Airlines collecting Federal Excise Duty and Advance Tax on tickets, and Educational Institutions collecting Advance Tax on fees. These examples further underscore that private entities frequently collect state revenue without exercising sovereign discretion. Similarly, in today’s technological and digital financial landscape, taxpayers frequently remit their bills, taxes, or fees through third parties or withholding agents.

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53.Consequently, in light of the distinction drawn between the delegation of discretionary powers and the assignment of ministerial functions, we are compelled to take a different view as regards the Cantonment Board’s and the local government authorities’ mandate to collect fees through a contractor. The argument that such collection constitutes an unlawful delegation lacks merit when the contractor is merely executing a mechanical function of collecting a pre- determined fee. It seems worth clarifying that the (sovereign) power to impose and assess the fee must be duly exercised by the authority empowered as such. The fee for which the authority has provided details of sizes and the applicable assessed and approved rates through official notifications does not in any way create the impression that the fee is charged by the contractor. It is for this reason that the contractor merely performs ministerial function, such as, undertaking field measurement of means of the advertisement on the spot. The contractor’s sole duty here is to measure the sizes of the means of advertisements and apply the notified rates as per the prescribed sizes in respect thereof. Once, he completes such exercise, the last task is to give a cumulative figure of the fee and collect such fee under the direction of the authority. It follows that the contractor’s job to measure the sizes of the means of advertisement on the spot according to the already approved notified rates and asking for payment of its fee, is a ministerial job. Otherwise, the contract itself would be a futile exercise. By ensuring this statutory requirement, the mere application and collection of the fee through contractor does not contravene the letter and spirit of the chargeability of such levy. We, therefore, hold that the collection of advertisement fee through a contractor is valid and lawful under both the Cantonment Act, 1924, and the Khyber Pakhtunkhwa Local Government Act, 2013. This practice does not contravene the relevant statutory schemes but rather serves as a permissible administrative arrangement for revenue recovery, provided the sovereign power of assessment and determination of liability remains with the Authority. We answer question (c) in affirmative.

Conclusion

54.For the detailed reasons recorded above and the legal principles referred, we have reached to the conclusion that the authority to levy “Advertisement Fees” is strictly statutory. A fee is distinguishable from tax inasmuch as it depends on offering of services (quid pro quo) by the authority which charges it. While it is difficult to quantify the services, however, good and substantial portion of it must be demonstrably shown as being spent on it. Under the old framework (pre-2023 amendment), Cantonment Boards Page 23 of 26

lacked specific legislative authority to impose such fee, rendering demand for that period void ab initio. However, under the new Cantonment (Amendment) Act, 2023, and Section 42 of the KP Local Government Act, 2013, such authority exists. Moreover, while assessing sign boards, billboards, shutter, stalls, etc. for the purpose of advertisement fee, clear distinction must be drawn between “Taxable Advertisement” (promotional in nature) and “Statutory Identification” (mandatory nameplates for regulatory compliance). Pure identification (e.g., Bank nameplates) is exempt, while displays containing “Plus Factors” (slogans, product images, signs, symbols, etc., reasonably suggesting promotion of good/services) are taxable. Additionally, the application and collection of these fees through private contractors is lawful, provided it is limited to the ministerial act of application and collection and does not involve the sovereign power of assessment.

Verdict

55.Hence, we dispose of all these petitions in the following terms: i. W.P. No. 4804-P/2021 is allowed. The Cantonment Board lacks the statutory authority to impose advertisement fees, and the demand notices issued are declared illegal due to insufficient legislative backing. ii. W.P. No. 3085-P/2024 is partially allowed. The notice demanding payment of advertisement charges for the tax year 2022-23 is struck down, as it falls under the old legal framework where the Cantonment Board did not possess the authority to levy such fees. However, the authority to levy fee for the tax year 2023-24 is upheld, as this period falls under the new legal framework established by the Amendment Act, 2023, which grants the Board the authority to impose advertisement fees. The notices being generic in nature are struck down, and the respondent may issue fresh notices that include the necessary details and specific particulars regarding the advertisement charges. iii. W.P. No. 4805-P/2021 is partially allowed to the extent that the notices issued to the petitioners are generic in nature and the absence of essential particulars regarding the placement, location, and size of the billboards/signboards render them legally insufficient. Consequently, the notices are struck down.

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However, the respondents may issue fresh notices in accordance with law.

iv. W.P. No. 2266-P/2021 is dismissed. The impugned notices contain all necessary particulars regarding the placement, location, and size of the billboards, and the local governments acted within their authority to levy fees in accordance with the law.

v. W.P. No. 1165-P/2023 is allowed. The display of the bank’s name outside its premises does not fall within the definition of a taxable advertisement as it is a statutory requirement under the Companies Act, 2017. vi. W.P. No. 3439-P/2022 is partially allowed. The requirements for displaying name boards and banners by private schools do not exempt them from advertisement fees, and the local governments retain the authority to levy such charges. However, the notices being generic in nature lacking full particulars regarding place, location, size, length and quantity are struck down. The respondents are at liberty to issue fresh notices in accordance with law.

vii. W.P. No. 4548-P/2023 is partially allowed to the extent that the notice is generic in nature and does not reference any specific promotional aspects of the alleged advertisement. Therefore, the notice is struck down. However, the respondents are at liberty to reassess the petitioners’ delivery bikes, and if they convey any impression of promotional advertising, they may issue new notices accordingly. viii. W.P. No. 4387-P/2023 is dismissed. The local governments are well within statutory authority to levy advertisement fees and the impugned notifications have been issued after fulfilling all the legal and procedural formalities.

ix. W.P. No. 3156-P/2024 is partially allowed, whereas the impugned notices, are found to be generic in nature and lacking in essential particulars. Consequently, the notices are struck down. The respondents may issue fresh notices that include the necessary details and specific particulars.

56.As regard the issue of collection of fee through contractor, we hold that the collection of advertisement fees through a contractor is Page 25 of 26

valid and lawful under both the Cantonment Act, 1924, and the Khyber Pakhtunkhwa Local Government Act, 2013.

Announced

(Shahid, SSS)

SD/-

JUDGE

SD/-

JUDGE

DB:

Justice Sahibzada Asadullah & Justice Dr. Khurshid Iqbal

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