Hazir Khan and others Vs Government of Khyber Pakhtunkhwa

JUDGMENT SHEET

PESHAWAR HIGH COURT

ABBOTTABAD BENCH

(Judicial Department) W.P. No.518-A/2025

Hazir Khan and others.

(Petitioner/s)

VS

Government of Khyber Pakhtunkhwa through Chief Secretary, Peshawar and others.

(Respondent/s)

Present: Mr. Ajmal Khan Tahirkheli, Advocate, for petitioner.

Mr. Asim Shamshad, Advocate, Legal Advisor for Excise and Taxation Department alongwith Mr. Mehboob Elahi and Mr. Abdul Hafeez (Excise Inspectors).

Mr. Sheikh Abid Ali, Advocate, for respondent No. 6

Date of hearing: 02.06.2026

JUDGMENT

AURANGZEB, J.- Through this consolidated judgment, we propose to decide the instant writ petition as well as connected Constitutional Petitions bearing Nos. 924-

A/2022, 520-A/2025, 595-A/2025, 820-A/2025, 821-

A/2025, 827-A/2025, 878-A/2025, 920-A/2025 and 984- A/2025, as all these petitions involve common questions of law and fact relating to the levy, assessment and recovery of Urban Immovable Property Tax under the provisions of the Khyber Pakhtunkhwa Urban Immovable Property Tax

Act, 1958, and, therefore, can conveniently be disposed of through a single judgment.

2.In the instant writ petition, the petitioners have averred that they are residents of Village Khalo, Tehsil Ghazi, District Haripur, and are owners of various immovable properties, including shops and commercial buildings situated within the said locality. According to the petitioners, Village Khalo falls within a rural area and has never been declared an urban area by the Government under Section 3 of the Urban Immovable Property Tax Act, 1958. It has further been pleaded that respondent No.6/Tehsil Municipal Administration issued notices dated 23.04.2025 and 24.04.2025 requiring the petitioners to pay Urban Immovable Property Tax in respect of their properties. Aggrieved by the issuance of the said notices, the petitioners preferred appeals on 28.04.2025 before respondent No.5 under Section 10 of the Urban Immovable Property Tax Act, 1958. It is their grievance that despite the pendency of the said appeals, respondent No.5 failed to decide the same, while respondent No.4 proceeded further with the recovery proceedings and issued additional notices for recovery of Urban Immovable Property Tax. In these circumstances, the petitioners have invoked the constitutional jurisdiction of this Court and seek declaration of the impugned notices as being without lawful authority and of no legal effect.

3.In Constitutional Petition No.924-A/2022, the petitioner has challenged demand notice dated 29.07.2022 issued by respondent No.3 under Rules 15(4) and 15(5) of the West Pakistan Urban Immovable Property Tax Rules, 1958, read with the relevant provisions of the West Pakistan Urban Immovable Property Tax Act, 1958, whereby an amount of Rs.11,51,540/- was demanded from the petitioner on account of Urban Immovable Property Tax. The petitioner contends that the building in question does not fall within the municipal limits of respondent No.4 and, therefore, is not liable to the payment of Urban Immovable Property Tax under the applicable statutory framework. On the basis of the aforesaid assertions, the petitioner seeks declaration that the impugned demand notice has been issued without lawful authority and is liable to be set aside.

4.In Constitutional Petition No.520-A/2025, the petitioners have asserted that they are affectees of the Tarbela Dam Project and, after displacement from their ancestral villages, were rehabilitated in Khalabat Township. It has been pleaded that the Tarbela Dam Project was undertaken as a national project for generation of hydroelectric power and that, in recognition of the hardships suffered by the displaced inhabitants, the Government of Khyber Pakhtunkhwa declared Khalabat Township a “weak town” vide letter No. SOR(Dir)4- 17/2001-Haripur dated 01.09.2007, whereunder the

residents of the township were exempted from payment of drinking water charges. It has further been averred that additional governmental assistance and funds were provided from time to time for the welfare of the affectees.

The petitioners contend that the impugned PT-10 and PT- 11 notices have been issued without lawful authority and, therefore, seek their annulment through the exercise of constitutional jurisdiction.

5.In Constitutional Petition No.595-A/2025, the petitioner claims to be the owner of immovable property situated in Village Shah Muhammad and contends that respondent No.5 issued a final notice dated 28.05.2025 under the Urban Immovable Property Tax Act, 1958, without first issuing any assessment notice, show-cause notice or personal intimation as allegedly required by law.

The petitioner maintains that the impugned action is violative of due process and contrary to the mandatory procedure prescribed under the relevant statutory provisions. Consequently, he seeks declaration that the impugned notice is illegal, void and without lawful authority.

6.Constitutional Petition No.820-A/2025 has been filed by petitioners who also claim to be affectees of the Tarbela Dam Project. According to them, the controversy involved in their petition is identical to that raised in Constitutional Petition No.520-A/2025. They have challenged the impugned PT-10 and PT-11 notices on

the ground that the same have been issued without lawful authority and are liable to be set aside.

7.Likewise, in Constitutional Petition No.821- A/2025, the petitioners have questioned the legality of the impugned PT-10 and PT-11 notices. Their case is founded upon the assertion that they too are affectees of the Tarbela Dam Project and stand on the same footing as the petitioners in Constitutional Petition No.520-A/2025. They have, therefore, sought identical relief.

8.Constitutional Petition No.827-A/2025 has also been instituted by persons claiming to be affectees of the Tarbela Dam Project. The factual matrix set up therein is substantially the same as that pleaded in Constitutional Petition No.520-A/2025. The petitioners challenge the impugned PT-10 and PT-11 notices as having been issued without lawful authority and seek their annulment.

9.In Constitutional Petition No.878-A/2025, the petitioner asserts ownership of immovable property situated in Village Jolian, District Haripur. It has been pleaded that respondent No.4 issued notice dated 11.02.2025 under the Urban Immovable Property Tax Act, 1958 without prior assessment proceedings, notice or personal intimation. It is further alleged that a reminder dated 10.03.2025 was subsequently issued without compliance with the procedure prescribed by law. The petitioner contends that the impugned notices are void ab initio and liable to be struck down.

10.In Constitutional Petition No.920-A/2025, the petitioners have challenged the impugned notices and PT-11 forms on the ground that they are affectees of the Tarbela Dam Project and that their case is fully covered by the controversy involved in Constitutional Petition No.520- A/2025. They seek the same relief as prayed for in the connected petitions.

11.In Constitutional Petition No.984-A/2025, the petitioner has averred that he resides within the territorial limits of Tehsil Municipal Administration Baffa Pakhal. According to the petitioner, respondent No.2 issued the impugned notifications whereby various localities within the territorial jurisdiction of Tehsil Municipal Administration Baffa Pakhal were declared rating areas for the purpose of levy and recovery of Urban Immovable Property Tax. The petitioner has questioned the legality and constitutional validity of the said proceedings and seeks declaration that the final notice dated 27.08.2024, along with the consequential recovery notices issued on the same date, are without lawful authority and of no legal effect.

12.Upon issuance of notices in the aforesaid petitions, the respondents entered appearance and submitted para-wise comments. The respective pleadings of the parties, along with the relevant record produced before the Court, form part of the case file and have been carefully examined.

13.Learned counsel appearing on behalf of the petitioners, the learned Legal Advisor for the Excise and Taxation Department, the learned Additional Advocate General and the learned counsel representing the private respondents were heard at considerable length. The record has also been perused with their able assistance.

14.Before adverting to the merits of the controversy, it would be advantageous to observe that issues relating to the levy, assessment and recovery of Urban Immovable Property Tax under the Khyber Pakhtunkhwa Urban Immovable Property Tax Act, 1958 have repeatedly engaged the attention of this Court. In particular, this Court had the occasion to examine the statutory framework governing Urban Immovable Property Tax, the concept of rating areas, the powers of local governments and the Excise and Taxation Department, as well as the effect of alternate statutory remedies available under the law in M/s Askari Cement Limited through Authorized Representative/Company Secretary Brig. Riaz Ahmed Gondal (Retd.) v. Government of Khyber Pakhtunkhwa through Chief Secretary and others (W.P.

No.371-P/2021) and connected matters. Since the controversy raised in the present and connected petitions substantially overlaps with the issues already considered in the aforesaid judgment, it would be appropriate to first examine the legal principles laid down therein.

15.At this juncture, it would be advantageous to refer to the findings recorded by this Court in paragraph No. 51 of the judgment rendered in W.P. No. 371-P/2021 titled “M/s Askari Cement Limited through Authorized Representative/Company Secretary Brig. Riaz Ahmed Gondal (Retd.) versus Government of Khyber Pakhtunkhwa through its Chief Secretary and others”, wherein the following legal conclusions were arrived at:-

51.In view of what has been stated above, this as well as the connected petitions are disposed of in the following manner:

i. We declare that through section 44 of the Act of 2013, the entire tehsil has become a rating area for the purpose of charging and collection of UIP Tax under the enabling provisions of the Act of 1958.

ii. The industrial building is subject to the imposition of UIP Tax as provided in the preceding para.

iii. All the notifications as mentioned in Para- 42 of this petition under section 120A of the Act of 2013 declaring certain territory/area as a rating area are illegal and without lawful authority.

iv. In the case of Lucky Cement, the respondents are directed to re-assess the liability of the petitioner Company strictly in accordance with the directions of the Apex Court in the case of Lucky Cement”.

16.Having given anxious consideration to the submissions advanced at the Bar, examined the pleadings of the parties and perused the relevant statutory provisions, this Court is of the considered view that the controversy involved in the present and connected petitions does not require any reconsideration of the legal proposition already settled in M/s Askari Cement Limited (supra), namely that,

by virtue of Section 44(1) of the Khyber Pakhtunkhwa Local Government Act, 2013, every tehsil constitutes a rating area for the purposes of the Khyber Pakhtunkhwa Urban Immovable Property Tax Act, 1958. Likewise, the determination of these petitions does not hinge upon whether the properties owned by the petitioners are situated in urban or rural localities. The principal question requiring adjudication is whether the mandatory statutory requirements envisaged under Sections 42 and 44 of the Act of 2013 were duly complied with before the levy, assessment and recovery of Urban Immovable Property Tax were undertaken. Since resolution of this controversy necessarily depends upon the scope, effect and interplay of the relevant provisions governing rating areas and determination of tax rates, it would be advantageous to examine the statutory scheme embodied in Section 44 of the Act of 2013, which is reproduced hereunder for facility of reference;

44.Rating Areas and Property Tax--- (1) On commencement of this Act, every tehsil shall be rating area within the meaning of the Khyber Pakhtunkhwa Urban Immovable Property Tax Act, 1958 (W.P. Act V of 1958).

(2)The rate of property tax in an area within a tehsil shall be subject to approval of respective tehsil council:

Provided that in the areas within a tehsil where rate has not been determined, the areas shall be deemed to be exempted from property tax till determination of the rate.

(3)Unless varied under sub-section (2) above, the existing rates in the areas within a tehsil shall remain in force.

Explanation--- For the purpose of this section the “rate” shall mean the tax leviable under the Khyber Pakhtunkhwa Urban Immovable Properly Tax Act, 1958 (W.P. Act V of

17.A plain reading of Section 44 demonstrates that the Legislature has enacted a comprehensive statutory framework governing the levy, determination and recovery of Urban Immovable Property Tax. Under sub-section (1), every tehsil is declared to be a rating area within the meaning of the Urban Immovable Property Tax Act, 1958.

Sub-section (2) further mandates that the rate of property tax applicable within any area of a tehsil shall be subject to the approval of the respective Tehsil Council. The proviso appended thereto assumes particular significance, as it expressly provides that where no rate has been determined, the area concerned shall be deemed exempt from property tax until such determination is made. Sub-section (3), in turn, preserves continuity by stipulating that the existing rates shall remain in force unless varied in accordance with sub-section (2). When construed as a whole, Section 44 delineates not only the territorial application of the tax but also the statutory mechanism through which the applicable rates are to be lawfully determined, approved and enforced.

18.Learned counsel appearing on behalf of the respondents contended that, by virtue of sub-section (3) of Section 44, the rates prevailing under the previous local government regime continued automatically and remained enforceable, with the result that no fresh determination or approval by the respective Tehsil Council was required.

Although the submission appears attractive at first glance, it does not withstand close scrutiny. Acceptance of such an

interpretation would substantially undermine, if not altogether render redundant, both sub-section (2) and the proviso appended thereto. It is a settled principle of statutory interpretation that every provision enacted by the Legislature must, as far as possible, be assigned meaning and effect, and that no part of a statute should be construed in a manner that renders it superfluous, nugatory or devoid of practical significance. A construction which nullifies the express requirement of approval by the Tehsil Council or renders the deeming exemption contained in the proviso ineffective cannot, therefore, be regarded as a permissible interpretation of Section 44.

19.Section 44 must be construed as a cohesive and integrated statutory scheme, with each of its components being assigned its due meaning and effect.

Sub-section (2) unequivocally designates the Tehsil Council as the competent authority for the determination and approval of the applicable rate of property tax. The proviso appended thereto further prescribes the legal consequence flowing from the absence of such determination, namely, that the area concerned shall be deemed exempt from property tax until the rate is lawfully determined. Sub-section (3), when read in harmony with the preceding provisions, merely preserves continuity in respect of rates already lawfully approved, determined or operative under the existing legal framework and obviates the necessity of repeated legislative or administrative

action. It cannot be construed in isolation or interpreted in a manner that defeats the legislative mandate embodied in sub-section (2), renders the role of the Tehsil Council redundant, or nullifies the statutory exemption expressly created by the proviso. Such a construction alone gives meaningful effect to every part of Section 44 and preserves the internal coherence of the statutory scheme enacted by the Legislature.

20.Particular significance attaches to the expression “shall be deemed to be exempt” employed by the Legislature in the proviso to Section 44(2). It is a settled principle of law that where the Legislature creates a legal fiction, the Court is under a duty to give full effect to the fiction so created and to carry it to its logical and inevitable conclusion. Once the Legislature has expressly declared that an area shall be deemed exempt from property tax until the applicable rate is determined, such declaration cannot be ignored, diluted or rendered ineffective through a process of interpretation. The statutory exemption embodied in the proviso continues to operate with full force unless and until the rate is lawfully determined and approved by the authority designated under the statute. The necessary consequence, therefore, is that in the absence of a valid determination or approval of rates by the competent authority, no enforceable liability to Urban Immovable Property Tax can arise, nor can any

assessment, demand or recovery proceedings be sustained in law.

21.Before proceeding further, it would be advantageous to address another important aspect of the controversy which surfaced during the course of arguments, namely, the nature, scope and legal effect of the powers conferred upon local governments under the constitutional and statutory framework governing local taxation. Since a substantial part of the respondents’ case rests upon the authority purportedly exercised by administrative functionaries in matters relating to the determination and approval of property tax rates, it becomes necessary to examine whether such powers are administrative in character or whether they partake of a legislative or quasi-legislative nature under the scheme of the Constitution and the Khyber Pakhtunkhwa Local Government Act, 2013.

22.Learned counsel appearing on behalf of the respondents contended that Article 140-A of the Constitution merely envisages the devolution of political, administrative and financial responsibility to local governments and does not confer upon them any legislative authority in the constitutional sense. Proceeding on this premise, it was argued that the determination or approval of rates under Sections 42 and 44 of the Khyber Pakhtunkhwa Local Government Act, 2013 constitutes a purely administrative function and, therefore, does not

require exercise by an elected local council. According to the respondents, the powers relating to approval or determination of property tax rates could validly be exercised by administrative functionaries acting under the statutory framework governing local governments. The submission, therefore, necessitates an examination of the nature and character of the powers entrusted under Sections 42 and 44 of the Act of 2013 and the constitutional status of local governments in matters pertaining to taxation.

23.We are unable to subscribe to such a broad proposition. It is undoubtedly correct that local governments do not enjoy plenary legislative competence comparable to that vested in Parliament or the Provincial Assemblies. However, it does not follow that they are entirely devoid of legislative or quasi-legislative authority.

The distinction between primary legislation and delegated legislation is now firmly embedded in constitutional and administrative jurisprudence. While local governments cannot enact laws in the constitutional sense, they may validly exercise delegated, subordinate or quasi-legislative powers where such authority has expressly been conferred upon them by the Legislature. Indeed, where a statute entrusts a local government institution with the authority to determine rates, impose taxes, frame bye-laws or regulate matters of general application within its jurisdiction, the exercise of such authority transcends the realm of purely

administrative action and assumes a legislative or quasi- legislative character. The correctness of the respondents’ contention must, therefore, be examined in the light of these well-settled principles.

24.In Rizwan Zaka Gill versus Government of Punjab (PLD 2015 Lahore 28), the Lahore High Court observed that local governments do not possess legislative powers in the same manner as federal or provincial legislatures. Those observations, however, were rendered in the context of the constitutional status, composition and electoral structure of local government institutions and were not intended to negate every form of delegated or subordinate legislative authority conferred upon such bodies by statute. The judgment, therefore, cannot be read as laying down an absolute proposition that local governments are incapable of exercising powers of a legislative or quasi-legislative nature where the Legislature has expressly entrusted them with such functions. Properly understood, the decision merely recognizes the distinction between plenary legislative competence, which vests in Parliament and the Provincial Assemblies, and delegated legislative authority, which may validly be exercised by local government institutions within the limits prescribed by law.

25.Conversely, in All Pakistan Textile Mills Association versus Province of Sindh (2004 YLR 192), the Sindh High Court recognized that although taxation is

essentially a legislative function, the Legislature may authorize local councils to impose taxes subject to conditions prescribed by law. Likewise, the august Supreme Court of Pakistan in Province of Punjab versus Market Committee, Okara (2011 SCMR 1856) identified the power to frame bye-laws, impose taxes and administer local funds as essential attributes of a local authority. Such powers, though not legislative in the plenary constitutional sense, nevertheless possess a delegated or quasi-legislative character.

26.The legal position emerging from the

foregoing authorities is that, although local governments do not possess independent legislative competence, the exercise of powers relating to the determination of taxes, rates, fees or other matters of general application assumes a delegated or quasi-legislative character where such authority has been entrusted by the Legislature. The determination of rates under Section 44(2) of the Act of 2013 squarely falls within this category, as it directly affects the proprietary and fiscal rights of persons situated within the relevant territorial jurisdiction.

27.It is, therefore, not possible to characterize the function entrusted under Section 44(2) as a purely administrative act. The determination or approval of rates is a normative exercise affecting an entire class of taxpayers and, therefore, possesses a legislative or, at the very least, a quasi-legislative character. Such authority

must, unless the statute expressly provides otherwise, be exercised by the institution designated by the Legislature itself.

28.Support for this interpretation may also be drawn from the recent judgment of the Lahore High Court in Mushtaq Ahmad and others versus Government of Punjab etc. (2025 LHC 7814), wherein pari materia provisions relating to rating areas and property taxation were examined. The Lahore High Court held that legislative declarations contained in local government enactments were sufficient to constitute rating areas, while continuity clauses were intended to preserve taxation in areas already subjected to property tax under the previous statutory regime.

29.The significance of the aforesaid judgment lies in its recognition that legislative declarations relating to rating areas and provisions governing the determination of rates perform distinct functions within the statutory scheme. The declaration of a territory as a rating area does not, by itself, determine the applicability, extent or enforceability of tax liability. The provisions relating to the determination of rates must, therefore, be given independent and meaningful effect.

30.In the present case, the controversy does not revolve around whether the petitioners’ localities form part of a rating area. That issue stands settled by Section 44(1) of the Act of 2013 as well as by the judgment rendered by

this Court in Askari Cement Limited. The real question requiring determination is whether the mandatory requirements embodied in Sections 42(2) and 44(2) of the Act were complied with before the impugned assessments and recovery proceedings were initiated.

31.The proviso appended to Section 44(2) assumes decisive importance in this regard. The Legislature has expressly provided that where no rate has been determined, the area concerned shall be deemed exempt from property tax until such determination is made.

It is a settled principle that a legal fiction created by statute must be given its full and logical effect. Consequently, unless rates are lawfully determined by the competent authority designated by the Legislature, the statutory exemption continues to operate and no enforceable liability to property tax can arise.

32.The interpretation advanced by the

respondents would effectively render both the proviso to Section 44(2) and the requirement of approval by the Tehsil Council redundant. If historical rates were automatically enforceable throughout every locality within a tehsil irrespective of whether the competent council had ever exercised its statutory authority, there would have been no necessity for the Legislature to incorporate the deeming exemption contained in the proviso. Such a construction would offend the settled principle of statutory interpretation that every provision enacted by the

Legislature must be assigned meaning and effect, and that no part of a statute should be treated as superfluous, redundant or without purpose.

33.The only interpretation that harmonizes all components of Section 44 is that sub-section (1) declares every tehsil to be a rating area; sub-section (2) entrusts the determination of rates to the competent Tehsil Council; the proviso grants statutory exemption where no rate has been determined; and sub-section (3) preserves continuity only in respect of rates already lawfully operative in areas previously subjected to Urban Immovable Property Tax.

Each provision thus operates within its own sphere without nullifying or rendering redundant the others.

34.The above interpretation receives further support from Section 42(2) of the Khyber Pakhtunkhwa Local Government Act, 2013, which expressly provides that no tax shall be levied without prior publication of the proposal, invitation and consideration of objections, and approval of the respective local council. These requirements are not mere procedural formalities; rather, they constitute substantive safeguards incorporated by the Legislature to ensure transparency, accountability and public participation in matters of local taxation. The statutory scheme, therefore, entrusts taxation decisions to representative local institutions and not to executive functionaries acting in their administrative capacity.

35.It may further be observed that the functions assigned to Tehsil Councils under the Act of 2013 include the approval of taxes, fines and penalties. Such powers are legislative and financial in nature. Taxation directly affects the proprietary rights and financial obligations of citizens and, therefore, cannot be equated with routine administrative functions. The requirement of approval by an elected local council reflects the legislative intent that taxation decisions should emanate from representative institutions possessing democratic legitimacy and accountability.

36.Learned counsel for the respondents, assisted by the learned Additional Advocate General, however contended that by virtue of Section 120-A of the Khyber Pakhtunkhwa Local Government Act, 2013, as amended from time to time, the powers exercisable by the Tehsil Council stood vested in the authorized officers during the period when elected local councils were not functional.

Reliance in this regard was placed upon Notification No.9541/TMA(H) dated 23.06.2021 and Government Notification No.SOG/LG/7-12/LG/2019 dated 04.09.2019.

According to the respondents, the Tehsil Municipal Officer/Authorized Officer was competent to determine and notify rates for Urban Immovable Property Tax and, therefore, the impugned notifications were lawfully issued.

Since this contention goes to the root of the controversy, it

would be advantageous to reproduce Section 120-A of the Act of 2013 in its original as well as amended form.

Insertion of section 120-A by way of Khyber Pakhtunkhwa Local Government (Amendment) Act, 2019 ( the first amendment);

120-A Dissolution of Local Government

(2)The Department shall authorize officers to perform administrative functions of respective Nazimeen till the installation of local government under this Act.

(3)All Administrative actions required for giving effect to the provisions of this Act and transition to the local government system set up thereunder shall be completed within six months of the commencement of the Khyber Pakhtunkhwa Local Government (Amendment) Act, 2019.

Amendments brought by way of Khyber Pakhtunkhwa Local Government (Second Amendment) Act, 2019 (The Second Amendment);

Amendment of section 120-A of the Khyber Pakhtunkhwa Act No. XXVIII of 2013.... In the said Act, in section 120-A, in sub- section (2), after the words "respective Nazimeen" the words and commas "and also to exercise the powers of their respective councils and Naib Nazimeen, respectively, under this Act and rules" shall be inserted."

37.The aforesaid contention, in our considered view, is devoid of substance. Section 120-A was introduced as a transitional provision following the dissolution of local governments and was intended to ensure continuity in the administration of local affairs during the interregnum. Even after its subsequent amendment, the provision cannot be construed as converting unelected executive officers into substitute local councils empowered to exercise legislative or fiscal functions expressly vested by law in representative institutions.

38.The distinction between administrative powers, on the one hand, and legislative and financial powers, on the other, is fundamental and cannot be overlooked. Article 140-A of the Constitution envisages a

democratic local government system vested with political, administrative and financial responsibility. The power to levy, approve or determine taxes is essentially legislative and financial in character and has been expressly entrusted by statute to elected local councils. Such power directly affects the proprietary and fiscal rights of citizens and, therefore, cannot be presumed to have been delegated or transferred to executive officers in the absence of clear and unequivocal legislative authorization. The law laid down by this Court in Muhammad Tahir and others v.

Government of Khyber Pakhtunkhwa and others (PLD 2021 Peshawar 171) fully supports this proposition and leaves no room for doubt that Section 120-A cannot be construed so broadly as to authorize administrative officers to exercise legislative or financial powers specifically reserved for elected local councils. The relevant observations are reproduced hereunder:

“Vesting of administrative powers in officers with the powers of Tehsil or District Councils with full authority to perform its functions and discharge duties of such representative bodies would go against the very purpose of enactment of the Act. It would also go in contrast with mandate of Article 140-A of the Constitution. A provision of an Act inserted through an amendment cannot be construed in a way so as to wipe out the entire Act, unless the legislature by express words or necessary intendment intends to give such an effect to the newly provided law. For empowering the administrative officers to perform functions of the elected and representative bodies of Tehsil and District Councils all the respective sections of the Act providing for the authority, establishment, functions and composition would be required to be amended suitably for the purpose. Even then it would be seen whether such amendments may be brought during existence of the mandate of Article 140-A of the Constitution or not. Without bringing such amendments merely adding the words "also to exercise the power of their respective councils and Naib Nazimeen" by way of the amending

Act cannot be construed to be having an effect of substitution of all the elected bodies with the respective authorized officers by deeming such officers substituted for such council in all the relevant provisions of the Act. Section 120-A was inserted by way of the First Amendment brought in the Local Government Act 2013. Said section was further amended vide the Second Amendment of same year i.e. 201.9 by the legislature with a particular purpose. The purpose had not been more than authorizing the worthy administrative officers to perform day to day affairs of the local government. While construing said provision of law the literal construction would not solve the riddle but a purposive construction would have to be adopted. While adopting the purposive construction the newly inserted provisions had to be read with the whole scheme, purpose and objects of the Local Government Act 2013. Hon'ble Supreme Court of Pakistan while giving its judgment in the case of "Rana Aamer Raza v. Doctor Minhaj Ahmad Khan" reported as 2012 SCMR 6 has held that the Supreme Court had to place a purposive construction on the provisions of the Constitution so as to make it a living document. It was also observed that while construing a statute a court has to keep in mind the statement of reasons and objects given therein, the statement of objects given in other laws, in pari materia to the one under consideration as well as the mandate of the relevant constitutional provisions. Relevant part of observations of the Hon'ble Court is reproduced hereunder for ready reference;

The construction as suggested by learned Astt: A.G, if placed on the provisions of section 120-A would not only have the effect of implied repeal of other provisions of the Local Government Act, but it would also go in contrast with the mandate of Article 140-A of the Constitution. Vesting powers of the administrative officers under section 120-A, cannot be construed to be for any other purpose than running the day to day affairs, at the time of transition from one local government to another. Their role may be compared with and found analogous to the functionaries of a caretaker government, about whom Hon'ble Supreme Court of Pakistan had laid down the law that their mandate cannot be construed beyond running of the day to day affairs of the government, while giving its judgment in the case of "Khawaia Muhammad Asif v. Federation of Pakistan and others" reported as 2013 SCMR 1205. Relevant part of observations of the august Court is reproduced hereunder for ready reference; "Essentially, according to the settled and accepted norms/ practice, the Caretaker Government (Prime Minister and Cabinet) is required to perform its functions to attend to the day-to-day matters, which are necessary to run the affairs of the State and also to watch the national interests, etc., in any eventuality in absence of an elected Government, and such Government is not authorized to make decisions/appointments having effect on the working/policies of the future Government, which is likely to take over after the elections. Apart from providing assistance to the Election Commission in organizing free, fair, honest and just elections in the

country, it is not vested with the authority to take decisions concerning the affairs of the Government, which are bound to pre-empt the scope and sphere of activity, powers and jurisdiction of an elected Government. A Caretaker Government possesses limited powers and authority particularly in view of the fact that when it is appointed, there is no National Assembly in place and thus the all important aspect of accountability is absent. Further, the exercise of complete powers by the Caretaker Government goes against the doctrine of separation of powers which is the lifeline of any vibrant democracy. As noted earlier, the absence of legislature results in lack of checks and balances. The Caretaker Government also lacks the mandate of the majority of people, which is to be acquired by elected government through the general elections. Therefore, if a Caretaker Government is allowed to exercise complete powers available to an elected Government, it may make an attempt to continue to remain in office for a longer period of time or may take such decisions which may cause problems for the future elected government."

39.For the reasons recorded hereinabove, these petitions, along with the connected petitions, are disposed of in the following terms;

I. Although every tehsil became a rating area by operation of Section 44(1) of the Khyber Pakhtunkhwa Local Government Act, 2013, the levy, assessment and recovery of Urban Immovable Property Tax nevertheless remained subject to fulfilment of the mandatory requirements prescribed under Sections 42(2) and 44(2) of the said Act.

II. The power to approve or determine rates under Section 44(2) of the Act of 2013 is legislative or, at the very least, quasi-legislative in character and has been expressly vested by the Legislature in the competent Tehsil Council.

Such authority could neither be assumed nor

lawfully exercised by administrative officers functioning under Section 120-A of the Act of 2013 in the absence of any express statutory authorization.

III. The continuity contemplated by Section 44(3) extends only to rates lawfully operative in areas previously subjected to Urban Immovable Property Tax in accordance with law and cannot be interpreted so as to defeat or nullify the statutory exemption expressly created by the proviso to Section 44(2) in respect of areas where no lawful determination or approval of rates has been made by the competent authority.

IV. Consequently, all notifications, orders, approvals, determinations or other instruments issued by any authorized officer or administrative functionary purporting to approve, determine, revise or impose the rates of Urban Immovable Property Tax without the prior approval of the competent Tehsil Council are hereby declared to be without lawful authority, coram non judice and of no legal effect. As a necessary consequence thereof, all assessments, PT-10 Forms, PT-11 Forms, demand notices, final notices, recovery notices and all other consequential proceedings impugned in these petitions, having been issued

pursuant to and founded upon such notifications, are hereby set aside. The respondents shall, however, remain at liberty to proceed afresh for the levy, assessment and recovery of Urban Immovable Property Tax strictly in accordance with law, after due compliance with all mandatory statutory requirements envisaged under Sections 42 and 44 of the Khyber Pakhtunkhwa Local Government Act, 2013, as well as all other relevant provisions governing the imposition, assessment and recovery of the said tax.

Announced

Tahir Saleem

JUDGE

JUDGE

(DB)Mr. Justice Syed Mudasser Ameer & Justice Aurangzeb