TMA Mansehra Vs Forest Development Corporation

Judgment Sheet

PESHAWAR HIGH COURT, ABBOTTABAD BENCH

JUDICIAL DEPARTMENT

Civil Revision No.93-A/2012

TMA Mansehra... (Petitioner) versus Forest Development Corporation. ...(Respondent) Present: Haji Sabir Hussain Tanoli, Advocate for petitioner.

Malik Amjad Inayat, Additional Advocate General for Provincial Government.

Abdur Rehman Qadir, Advocate for respondent.

Date of hearing: 03.03.2026.

JUDGMENT

SYED MUDASSER AMEER, J.- This case concerns the limits of municipal taxation. The question is whether a Tehsil Municipal Administration could demand a cess on transportation of timber under the scheme and provisions of NWFP Local Government Ordinance, 2001. Both courts below answered the question in the negative.

(S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

2.Through this revision petition, the petitioner has called in question the concurrent judgments and decrees of the courts below whereby the suit of the respondent was decreed as prayed for.

3.The facts are simple. Respondent instituted a suit for declaration against the petitioner asserting that it was legally entitled to transport timber from Tehsil Balakot Forest Division to the roadside depot and thereafter to the market at Havelian without payment of any cess or timber tax. Respondent further challenged Notification No.2256- 62 dated 29.01.2003 as illegal and contrary to the Government directives contained in letter No.AO- II/LCB/2-14/2003 dated 01.11.2003. Permanent injunction was also sought against the petitioner.

4.The suit was contested. After recording evidence and hearing the parties, the learned trial Court decreed the suit vide judgment and decree dated 21.07.2008. The appeal preferred by the petitioner was also dismissed.

Hence the present revision petition.

5.Learned counsel for the parties were heard at considerable length and the record was examined with their assistance.

(S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

6.The controversy raised in this petition revolves around three questions. First, the procedural objection relating to the intermediate appellate proceedings. Second, the jurisdiction of the civil Court to adjudicate the matter.

Third, the legality of the levy itself.

7.The petitioner contends that the learned appellate Court earlier allowed the appeal ex-parte and dismissed respondent’s suit vide judgment and decree dated 17.12.2008. According to the petitioner, the appellate Court had no jurisdiction to set aside the said ex parte judgment through order dated 14.11.2011 because Order XLI Rule 21, C.P.C. provides only for rehearing of the appeal and not for setting aside an ex-parte judgment and decree as contemplated under Order IX Rule 13, C.P.C.

8.The contention is misconceived. At the trial stage, Order IX Rule 13, C.P.C. enables a defendant to seek setting aside of an ex-parte decree on proof that summons were not duly served or that sufficient cause prevented appearance. At the appellate stage, the corresponding remedy is provided under Order XLI Rule 21, C.P.C., which permits a respondent against whom an appeal has been heard ex parte to apply for rehearing of the appeal on similar grounds.

(S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

9.The distinction is merely one of terminology, not of substance. An appeal is a continuation of the suit.

When the appellate Court is satisfied that the respondent was not duly served, it may order rehearing of the appeal under Order XLI Rule 21, C.P.C. Such rehearing necessarily implies that the earlier ex-parte judgment cannot survive. It must first cease to operate. In effect, therefore, directing rehearing amounts to setting aside the earlier ex-parte judgment. The objection raised by the petitioner is thus one of form rather than substance.

10.The reliance placed by the petitioner on Messrs Amir Weaving Factory v. Messrs United Bank Ltd. (1991 SCMR 1737) is misplaced. There is nothing in the said judgment that draws any distinction between the scope of Order IX Rule13 CPC and Order XLI Rule 21 CPC. For convenience of reference the relevant para of the judgment is given below:

“11. We have heard the arguments of the learned counsel for the appellants and the respondents and have also perused the record. Even treating the miscellaneous petition C.M. 5379‐C of 1986 filed by the appellants in the High Court as one under Order 41, Rule 21 and section 151 of the Code of Civil Procedure for the setting aside of the ex parte decree dated 4‐11‐1986, no sufficient grounds have been shown to our satisfaction justifying a rehearing of the appeal. This is, however, (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

besides the further fact taken into consideration by the learned Judges of the High Court that had they even allowed the rehearing, they would not have been able to reverse their judgment, in view of the mandatory force behind section 8(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979., which compelled the grant of interest to the decree holder. In these circumstances, we see no merit in this appeal and dismiss the same, with no order as to costs.”

(Underlining supplied)

11.Clearly, the consideration that prevailed with the High Court, and noted by the apex Court with approval, was that even if the appeal was reheard, the earlier judgment could not have been reversed due to the mandatory provisions of the special statute involved and not because of any such restriction contained in Order XLI Rule 21 CPC. The decision therefore turned on the effect of section 8(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979, and not on any limitation inherent in Order XLI Rule 21, CPC.

12.The said judgment does not in any manner imply that that once a case is fixed for rehearing under Order XLI Rule 21, C.P.C., the earlier order continues to subsist or cannot be revisited. The concept of rehearing necessarily implies that the earlier ex-parte decision ceases to operate and the matter is heard afresh. If the (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

previous order were to remain intact, there would be nothing left to rehear.

13.In the present case, it was established to the satisfaction of the appellate Court that summons had not been duly served upon the respondents before they were proceeded against ex-parte. The appellate Court therefore rightly exercised its jurisdiction to order rehearing of the appeal. It is of no consequence that while doing so the Court employed the expression “set aside” instead of “rehearing”. The substance of the order remains the same.

14.It also merits mention that after insertion of Article 10-A in the Constitution of the Islamic Republic of Pakistan, 1973, the right to fair trial and due process stands recognized as a fundamental right. Courts are therefore required to ensure that a party is not denied an opportunity of hearing on account of procedural technicalities. The Honourable Supreme Court in President, Zarai Taraqiati Bank Limited v. Kishwar Khan (2022 SCMR 1598) has observed that the function of the Court is to do substantial justice rather than to non-suit a party on technical grounds. Likewise, in Bashir Ahmed v.

Additional District Judge, Hafizabad (PLD 2024 SC 67) it (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

has been reiterated that Article 10-A guarantees every person the right to fair trial and due process.

15.The petitioner next questioned the maintainability of the suit on the ground that the civil Court could not examine the validity of a levy imposed by a public authority and that such challenge could only be brought before the High Court under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973.

16.The argument carries no force. The civil Court exercises plenary jurisdiction under section 9 of the Code of Civil Procedure, 1908 to try all suits of a civil nature unless such jurisdiction is expressly or impliedly barred.

The exclusion of jurisdiction is not to be readily inferred.

Any provision seeking to oust the jurisdiction of a Court of general jurisdiction must be construed strictly.

17.It is equally well settled that even where a statute provides a special forum or bars the jurisdiction of the civil Court, such bar operates only when the impugned action has been taken within the four corners of the statute. Where the authority acts without jurisdiction, in violation of the statute, or in disregard of the fundamental (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

principles of judicial procedure, the jurisdiction of the civil Court remains intact.

18.Reference may be made to Abbasia Cooperative Bank v. Hakeem Hafiz Muhammad Ghous (PLD 1997 SC

3)and Abdul Rauf v. Abdul Hamid Khan (PLD 1965 SC 671). The same principles were elaborated by the Sindh High Court in Engro Elengy Terminal (Pvt.) Ltd. v.

Federation of Pakistan (2017 PTD 959), where it was held that a civil suit remains maintainable whenever the impugned action is without jurisdiction, mala fide, or outside the ambit of the statute itself.

19.The principle emerging from the above authorities is straightforward. Where the very competence of a public authority to impose a fiscal levy is questioned, the dispute strikes at the root of jurisdiction. In such a situation the civil Court is not merely competent but duty bound to examine whether the demand has any foundation in law.

If the statute does not authorize the levy, the bar of jurisdiction cannot be invoked to protect an action which itself is without lawful authority.

(S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

20.In the present case, the respondent questioned the very authority of the petitioner to impose the cess in question. The challenge therefore went to the root of jurisdiction. Such a question is plainly a matter of civil nature and the civil Court was fully competent to examine it. The objection regarding maintainability of the suit is therefore without substance.

21.Turning now to the merits. The respondent is a government corporation responsible for construction of roads and transportation of timber to the market at Havelian, District Abbottabad. According to the respondent, while transporting timber after completion of all formalities, the petitioner demanded payment of Tehsil Council Cess without lawful authority. The petitioner, on the other hand, claims authority to levy such cess under section 54 of the NWFP Local Government Ordinance,

22.The relevant portions of sections 54 and 67 of the NWFP Local Government Ordinance, 2001 are given below for ready reference:

“54. Functions and powers of the Tehsil Municipal Administration. --- (1) Subject to sub-section (3), the functions and powers of the Tehsil Municipal Administration shall be to- (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

(l)propose taxes, cesses, user fees, rates, rents, tolls, charges, surcharges, levies, fines and penalties under Part III of the Second Schedule for approval of the Tehsil Council and notify the same after such approval;

(m)collect approved taxes, cess, user fees, rates, rents, tolls, charges, fines and penalties;

“67. Functions and powers of the Tehsil Council.--- The functions and powers of the Tehsil Council shall be –

(i)to approve taxes, cess, rates, rents, fees, user- charges, tolls, levies, fines and penalties proposed by Tehsil Municipal Administration specified in Part-III of the Second Schedule;”

23.The law is clear. A Tehsil Municipal Administration has no independent authority to levy any tax, fee or cess. Its role is confined to proposing such levies to the Tehsil Council for approval. Even that power of proposal is not unlimited. It extends only to those taxes, fees and charges which are enumerated in Part-III of the Second Schedule to the Ordinance. Correspondingly, the Tehsil Council may approve only such levies as specified in part-III of the Second Schedule. The competence of the petitioner/TMA is therefore strictly confined to the entries appearing in Part-III of the Second Schedule. The statute (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

draws the boundary of its taxing power. That is the full extent of its authority. Nothing beyond it. Nothing more.

24.It is therefore necessary to examine Part-III of the Second Schedule to the NWFP Local Government Ordinance, 2001. For convenience of reference, the same is reproduced below:

SECOND SCHEDULE

[See Sections 39(b), 54(l),54 -A, 67(i),67-A & 88(b)] Part III III- Tehsil Council

1.Local tax on services.

2.Fee on sale of animals in cattle markets.

3.Market Fees.

4.Tax on the transfer of immovable property.

5.Property tax rate as specified in section 117 of this Ordinance.

6.Fee on advertisement, other than on radio and television and billboards.

7.Fee for fairs, agricultural shows, cattle fairs, industrial exhibitions, tournaments and other public events.

8.Fee for approval of building plans, erection and re- erection of buildings

9.Fee for licenses or permits and penalties or fines for violations.

10.Charges for development, betterment, improvement and maintenance of works of public utility like lighting of public places, drainage, conservancy and water supply by Tehsil Municipal Administration.

11.Fee on cinemas, dramatical, theatrical shows and tickets thereof, and other entertainment.

12.Collection charges for recovery of any tax on behalf of the Government, District Government, Union (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

Administrations or any statutory authority as prescribed.

13.Rent for land, buildings, equipment, machinery and vehicles.

14.Fee for specific services rendered by a Tehsil Municipal Administration.

15.Tax on vehicles other than motor vehicles registered in the Tehsil.

25.A careful reading of the said Schedule shows that while it authorizes the imposition of certain specified taxes, fees and charges, it does not provide for any cess on the transportation of timber from the jurisdiction of one Tehsil to another. As noted above, the statutory scheme leaves little room for doubt. A Tehsil Municipal Administration may propose only those levies which are enumerated in Part-III of the Second Schedule, and the Tehsil Council may approve only such levies as the statute itself contemplates. No provision of the Ordinance authorizes imposition of the cess demanded from the respondent. The levy in question thus lacks statutory foundation. The petitioner therefore acted beyond the powers conferred by the NWFP Local Government Ordinance, 2001, rendering the demand ultra vires the statute and void ab initio.

(S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

26.It is also noteworthy that the order dated 14.11.2011, whereby the ex parte judgment was set aside, was not independently challenged within limitation. The present petition filed on 23.02.2012 is time-barred to that extent as well.

27.Both courts below have returned concurrent findings on facts and law after proper appreciation of the record. No perversity, jurisdictional defect or material illegality has been pointed out warranting interference in revisional jurisdiction.

28.The scope of interference under Section 115, C.P.C. is narrow and concurrent findings cannot be disturbed unless shown to suffer from patent illegality or gross misreading of evidence. Reference may be made to Mst. Farzana Zia v. Mst. Saadia Andaleeb (2024 SCMR 916), Salamat Ali v. Muhammad Din (PLD 2022 SC 353), Nasir Ali v. Muhammad Asghar (2022 SCMR 1054), and Muhammad Sarwar v. Hashmal Khan (PLD 2022 SC 13).

29.It is settled that no tax, fee or cess can be imposed or collected except by clear authority of law. This is also the requirement of Article 77 (read with Article 127) of the Constitution. The power to levy a tax or cess is not an (S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer

inherent attribute of a public authority. It must flow strictly from the statute. A public authority cannot assume a taxing power which the statute itself does not confer.

Where the legislature has specified the taxes and levies that may be imposed, the authority must act strictly within those limits. Any demand raised without statutory sanction is not merely irregular; it is without lawful authority and therefore void. The courts are bound, in such circumstances, to protect citizens from exactions unsupported by law. In the present case, the cess demanded from the respondent finds no foundation in the relevant provisions of the NWFP Local Government Ordinance, 2001 or the Second Schedule thereto. The courts below were therefore correct in declaring the levy illegal and restraining its recovery.

30.For the foregoing reasons, the instant revision petition, being devoid of merit, is dismissed.

ANNOUNCED.

(Jamil)

JUDGE

(S.B.) Hon’ble Mr. Justice Syed Mudasser Ameer