P L D 1975 Supreme Court 37 Present: Hamoodur Rahman, C. J

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P L D 1975 Supreme Court 37

Present: Hamoodur Rahman, C. J., Waheeduddin Ahmed, Salahuddin Ahmed, Anwarul Haq and Muhammad Gul, JJ

PAKISTAN THROUGH THE SECRETARY, MINISTRY OF DEFENCE—Plaintiff

Versus

PROVINCE OF PUNJAB AND OTHERS—Defendants

Original Civil Suit No. 1 of 195S, decided on 17th September 1974.

(a) Cantonments Act (II of 1924)—

——S. 3—Cantonments, historical origin of.

(b) West Pakistan Urban Immovable Property Tax Act (V of 1958)—

Ss. 3 & 4 read with Cantonments Act (II of 1924), Ss. 3, 4, 11 &; 108—Lands situate within limits of Cantonment areas—Do not vest in Central Government but, under S. 108 of Cantonments Act, "vest and belong to Cantonment Boards"—Cantonment areas—Part of and included within territorial limits of Province where they are situate— Taxation on lands and buildings specifically mentioned in legislative list as separate item of legislation and legislation in respect of taxes on lands and buildings comes within competence of Provincial Legislature and law so made applicable to all parts of that Province unless any area specifically excluded under that law or under any Constitutional provision—Lands and buildings in cantonment area— Not exempt from payment of tax under West Pakistan Urban Immovable Property Tax Act, 1958.

The Cantonments Act of 1924, by section 3, gives power to the Central Government to declare, as already stated, any place or places in which any part of the regular forces or the regular air force of Pakistan is quartered or which, being in the vicinity of any such place or places, is or are required for the service of such forces, to be a cantonment for the purposes of this Act. Similarly, section 4 gives power to the Central Government to alter the limits of a cantonment by notification in the official Gazette, and it is significant that by section 6 it is provided that where by a notification under section 3 any cantonment ceases to be a cantonment and the local area comprised therein is placed under the control of a local authority, then the balance of the cantonment fund and other property vesting in the Cantonment Board shall vest in such a local authority, and the liabilities of the Board shall stand transferred to such local authority. Similarly, where under a notification issued under section 4 of the above-mentioned Act, any local area forming part of a cantonment ceases to be under the control of a particular Board and is placed under the control of some other local authority, then such portion of the cantonment fund and other property vesting in the Cantonment Board and such portion of the liabilities of the Board, as the Central Government may direct, shall be transferred to such local authority. The Cantonment Board is by section 11 to be a body corporate having perpetual succession and a common seal with power to acquire and hold property both movable and immovable and to enter into contracts and to sue and be sued in its own name. Section 60 gives the Cantonment Boards the power to impose 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 with the previous sanction of the Central Government. The Cantonment Boards, like other Municipal Authorities under other Municipal Acts, have been given the power to levy a rate on the annual value of buildings as well as octrois, terminal taxes, tolls, etc.

It is also manifest from the provisions of the Cantonments Act that the Board has the power to enter into contracts in its own name.

It is significant that contracts are not to be executed by the Board on behalf of, or in the name of, the Central Government.

The examination, therefore, of these provisions, and in particular the provisions of the Cantonments Act, 1924, does not support the contention that all lands situated within the limits of the cantonment areas vest in the Central Government. Section 108 of the Cantonments Act provides that all property of the nature therein specified which has been acquired or provided or is maintained by a Board "shall vest in and belong to that Board" and shall be under its direction, management and control. Similarly, under section 110, even where the Central Government has at the request of the Cantonment Board procured the acquisition of any land for the purposes of the Board on payment of compensation, the land shall "vest in the Board" which is a body corporate having its own common seal and independent existence apart from the Government of Pakistan.

Rule 7 of the Pakistan Cantonments Rules, 1957 does not show that the right of resumption reserved by Government is without payment of any compensation at all. In fact, the amount paid by the Board for the original transfer and the market value at the time of resumption of buildings, etc. erected on the land will still have to be paid. All that this provides for is that the Government would have the right to resume the lands under certain conditions, if the land was originally granted to the Cantonment Board by Government.

The word "vest" does not, by itself, connote "vest in title" but where it is used in conjunction with the word "belong" it is difficult to give it any other meaning. The words used in section 108 of the Cantonments Act are "shall vest in and belong to that Board" and, therefore, the clear implication of these words is that they not only vest in possession but also in title.

The words "vest" and "belong to" in section 108 of the Cantonments Act are not without significance. They not only show a vesting in an unlimited sense but also vesting in title and, therefore, the contention of the learned Deputy Attorney-General appearing on behalf of the Government of Pakistan that all land in a cantonment area belongs to the Central Government is not, supported either in principle or by any authority.

Under all the Constitutional provisions, the property of the Central Government is exempted from taxation, and it is the Federal Legislature which has the power to legislate in respect of a cantonment area but with regard to certain matters only.

Since taxation on lands and buildings is specifically mentioned in the Provincial Legislative List as a separate item of legislation, legislation in respect of taxes on lands and buildings comes within the competence of the Provincial Legislature and the law so made would apply in any part of the Province making the law, unless the area sought to be excluded has been specifically exempted under the law or under any constitutional provision. There is nothing in any constitution or any law to show that a cantonment area is not to be included within the territorial limits of a Province in which it is situated. In the circumstances there is no escape from the conclusion that the claim of the Central Government that all lands and buildings included in the cantonment area are exempt from payment of the Urban Immovable Property Tax imposed by the Provincial Legislatures of the Provinces of Pakistan is not tenable. The exemption given by the Constitution to the property of the Central Government will of course be available, and it has been made available even under the provisions of the Provincial Acts themselves. What is the property of the Central Government is a different matter and will have to be decided in each case with reference to the relevant documents? If the property is Government property which has been made over to the Cantonment Board or has been leased to the Cantonment Board, then it would be entitled to the exemption granted by the Constitution as being property vested in the Central Government. The mere fact that a property is situated in the cantonment area does not however, make it a property of the Central Government, because, there may well be other kinds of property vested in the Board which is not property vested in the Central Government.

Fruit & Vegetable Merchants Union v. The Delhi Improvement Trust A I R 1957 S C 344; Secretary of State for India-in-Council v. Satish Chandra Sen 57 I A 339; Basu's Commentary on the Constitution of India, Vol. II, 3rd Edn. p. 375; Heritable Reversionary Co. v. Mullar 1892 A C 598; Hamabai Framjee Petit v. Secretary of State for India-in-Council A I R 1914 P C 20; The State of Bihar v. Sir Kameshwar Singh A I R 1952 S C 252; Ajit Kumar Das v. Province of East Pakistan P L D 1958 Dacca 280 and Abdus Soban Sowdagar v. Province of East Pakistan 14 D L R 486 ref.

Kaikhusru Aderji Uhaswala v. The Secretary of State for India-in-Council 38 I A 204 and Chhatra Kumari Devi v. Mohan Bikram Shah A I R 1931 P C 196 distinguished.

S. 4-Whether particular property exempt from tax-Question of fact to be considered by Assessing Authority in each case.

(d) West Pakistan Urban Immovable Property Tax Act (V of 1958)------

---S. 4(b)(h) --- "Public purpose" --- Property used for valid public object-Mere fact that a fee is charged for such user would not render user of property for non-public purpose.

(e) Words and phrases------

"Vest"-Does not by itself connote "vest in title".

Fruit & Vegetable Merchants' Union v. The Delhi Improvement Trust A I R 1957 S C 344 ref.

Raja Muhammad Anwar, Deputy Attorney-General for Pakistan (Ataul Haq, Advocate Supreme Court with him) instructed by Iftikharuddin Ahmad, Advocate-on-Record for plaintiff.

K. M. Bokhari, Assistant Advocate-General, Punjab (Iftikharul Haq Khan, Advocate Supreme Court with him) instructed by Ijaz Ali, Advocate-on-Record for Defendant No. 1.

Jamaluddin, Additional Advocate-General, Sind (from 21stMay 1974 to 23rd May 1974) for the Government of Sind.

Burhanuddin, Advocate-General N.W.F.P. instructed by Amirzada Khan, Advocate -on-Record (only on 23rd May 1974) for Government of N.-W.F.P.

Dates of hearing: 20th to 23rd May 1974.

JUDGMENT

HAMOODUR RAHMAN, C. J.-This original civil suit was filed by the Government of Pakistan through the Secretary, Ministry of Defence, on the 16th of May 1958, against the Province of West Pakistan, under Article 156 of the Constitution of 1956, for seeking a declaration to the effect that the Cantonment Boards and the lands in the Cantonments vested in the Government of Pakistan and recorded as such in the Central Land Revenue registers were not liable and had at no time been liable to pay any tax under the West Pakistan Urban Immovable Property Tax Act, 1958, or under the corresponding provisions of the earlier Provincial Urban Immovable Property Tax Acts repealed by section 24 of the West Pakistan Urban Immovable 'Property Tax Act, 1958. A further declaration was also sought to the effect that taxes, if any, hitherto realised by the Provincial Government from any of the Cantonment Boards or in respect of lands vested in the Government of Pakistan and recorded as such in the General Land registers maintained by the Cantonment Boards, were realised illegally and were, therefore, refundable to the Government of Pakistan or the Cantonment Boards, as the case may be.

The Province of West Pakistan filed its written statement on the 30th of September 1958, and issues were framed by the Court on the 12th of January 1959, to the following effect:-

"(1) Whether lands and buildings situate in Cantonment areas and vesting in the Federal Government, which are being administered by Cantonment Boards and are being used or are intended to be used for purposes of profits are not exempt from taxation under the Act?

(2) Whether lands and buildings situate in a Cantonment area and vesting in. a Cantonment Board, which are being used for purposes of profit, are exempt from taxation under the Act?

(3) Whether the realisation by a Cantonment Board of rent or compensation in cash or kind, for the use or occupation of lands and buildings situate in a Cantonment area and vesting in the Board, cannot, in law, amount to using such lands and buildings for profit within the meaning of section 4 (b) (11) of the Act, if such rent or compensation is used or is intended to be used or can only be used for public purposes?

[Note.-The expression `the Act' in these issues means the West Pakistan Urban Immovable Property Tax Act, 1958 (Act V of 1958)]."

Thereafter, the suit came up again for hearing on the 15th of May 1961, when a request was made by the then learned Attorney-General for the Government of Pakistan for an adjournment on the ground that negotiations for a compromise were going on. The Court granted the adjournment and directed the parties to file written arguments of counsel dealing with all points raised in the pleadings. Such written arguments were filed on behalf of the Government of Pakistan in November 1961 and by the Province of West Pakistan in March 1967.

The suit was again directed to be fixed for early hearing in 1966; but all that happened then was that an application was made for the vacation of the stay order earlier granted restraining the Province from realising the disputed tax.

The suit, however, remained pending, and each time it was fixed for hearing, it had to be adjourned on the plea that negotiations for compromise were still going on. Ultimately, the Province of West Pakistan was broken up in 1970, and this necessitated further adjournment of the suit for the substitution of the successor provinces. This was done in 1972, and the case was ultimately heard on the 23rd of May 1974, after the new Provinces had adopted the written statement filed by the Province of West Pakistan.

It will thus be noticed that this suit has become the oldest litigation pending in this Court, even though the parties to this litigation are the Central Government and the Provincial Governments.

Be that as it may, the case of the Central Government appears to be that a tax imposed by a Provincial Legislature cannot be levied on lands and buildings situated in cantonment areas, since such lands and buildings are vested in the Central Government and the Cantonment Boards are merely administrative bodies.

In support of this contention, reliance is sought to be placed on the historical origin of cantonments in British India. It is said that cantonment areas Were created as areas set apart exclusively for the use of troops, and their needs and requirements, either by acquisition of land on payment of compensation to original holders or by right of conquest or by appropriation or by treaty with the Ruling Chiefs or by cession. Hence, in the absence of any clear proof to the contrary, the ownership of all lands within cantonment limits has always been presumed to vest in the Crown and now in the Central Government.

In the early days of British rule, cantonment lands were governed by (a series of Military regulations by Military authorities under the directions of the Central Government; but, in 1889, the Cantonment Code was enacted for the better regulation and administration of cantonment areas. This was finally incorporated in the Cantonments Act (Act II of 1924) and supplemented by the Cantonments Property Rules, 1925, as amended up to 1957, and the Cantonment Land Administration Rules, 1925, as amended up to 1937.

Under these Acts and Rules, the ownership of all lands within the cantonment areas remained vested in the Central Government, and section 8 of the Cantonments Act merely formally vested these lands in the Cantonment Authority for the purposes of management and control. This was not a vesting in ownership but vesting only for a limited purpose.

In any event, since the Cantonment Boards are statutory bodies whose powers and functions are clearly defined in the Cantonments Act itself, they hold these lands for strictly public purposes, and even if they derive any income from such lands, the income is to be spent on such public purposes as are authorised by the Act and, therefore, the exemption granted by the Urban Immovable Property Tax Act itself to lands utilised for public purposes will apply to all lands and buildings in cantonment areas.

As against this, it is contended on behalf of the Governments of the Provinces that the Urban Immovable Property Tax Act itself has taken into account the constitutional protection given to properties vested in the Government of Pakistan and, therefore, section 4 of the present Act and even subsection (4) of section 3 of the Original Punjab Urban Immovable Property Fax Act of 1940 exempted the following, namely:-

(1) Buildings and lands vested in His Majesty for the purposes of the Central Government;

(2) Buildings and lands vested in His Majesty for the purposes of a Provincial Government or owned or administered by a local authority or a District Board when used exclusively for public purposes and not used or intended to be used for purposes of profit;

(3) Buildings and lands used exclusively for educational purposes.

Similar Acts passed by the former Provinces of Sind and North-West Frontier in 1948 also contained similar exemptions. There is, therefore, according to the Provincial Governments, no dispute that properties, which are vested in the Central Government, are not taxable.

The Urban Immovable Property Tax Act, therefore, does not infringe the provisions of Article 112 of the Constitution of 1956, because, it specifically exempts the properties of the Central Government, and even properties used for educational purposes or other public purposes, even though they do not vest in the Central Government. The provincial tax is sought, however, to be levied only on property, which does not vest in the Central Government or is not used for any educational purpose or for any public purpose but is used merely for purposes of profit.

Learned counsel appearing for the Provincial Governments also point out that the reference to the historical origin of cantonment areas is not very relevant, for, under the Cantonments Act of 1924, the Central Government may, by notification in the official Gazette, declare any place or places, in which any part of the Government's regular forces are quartered or any place which is required for the service of such force, to be a cantonment for the purposes of the said Act. The cantonment area, therefore, has no essential connection with, nor is it dependent upon, Military Administration. The Cantonment Boards, like any other Municipal Authority are independent, corporate, statutory bodies having the power to impose taxes, hold and dispose of property, enter into and perform contracts and even acquire immovable property. The Cantonment Boards cannot, therefore, be equated with the Central Government, and all properties belonging to the Cantonment Boards do not necessarily vest in the Central Government or vice versa. The Provincial Governments therefore, find it difficult to accept as a fact that all lands and buildings in a cantonment area are vested in the Central Government or were ever so vested.

The Provincial law was validly enacted by a competent Legislature and it does not in any way infringe any provisions of the Constitution of 1956. Its validity, therefore, is not open to challenge. Hence, whatever, tax has been collected has been lawfully collected, and, therefore, the question of refunding the same does not arise, nor can the Central Government claim immunity in respect of all lands situated within the cantonment areas.

Similarly, where under a notification issued under section 4 of the above-mentioned Act, any local area forming part of a cantonment ceases to be under the control of a particular Board and is placed under the control of some other local authority, then such portion of the cantonment fund and other property vesting in the Cantonment Board and such portion of the liabilities of the Board, as the Central Government may direct, shall be transferred to such local authority.

The Cantonment Board is by section 11 to be a body corporate having perpetual succession and a common seal with power to acquire and hold property both movable and immovable and to enter into contracts and to sue, and be sued in its own name. Section 60 gives the Cantonment Boards the power to impose 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 with the previous sanction of the Central Government. The Cantonment Boards, like other Municipal Authorities under other Municipal Acts, have been given the power to levy a rate on the annual value of buildings as well as octrois, terminal taxes, tolls, etc.

It is also manifest from the provisions of the Cantonments Act that the Board has the power to enter into contracts in its own name. The only limitation is that in the case of contracts exceeding Rs. 50 the contract has to be in writing and has to be signed by two members, of whom the President or the Vice-President shall be one, and that it must be countersigned by the Executive Officer and sealed with the common seal of the Board. It is significant that contracts are not to be executed by the Board on behalf of, or in the name of, the Central Government. The Cantonment Boards also consist of certain number of elected members, but the Government has the power to override the decision of a Cantonment Board or even to supersede the Board.

A comparison of the provisions of the Cantonments Act, 1924, with the provisions of the Municipal Administration Ordinance X of 1960 will also indicate that every Municipal Committee is to be a body corporate having perpetual succession and a common seal, with power, subject to the provisions of the Ordinance and the rules, to acquire and hold property both movable and immovable and to be able to sue and be sued in its own name. The Provincial Government also, by section 7 of the said Ordinance, has the power to declare any urban area, other than a cantonment, to be a municipality, and extend, curtail or otherwise alter the limits thereof. The Controlling Authority has also the power to remove a member of a Municipal Committee. Under section 112 of the Ordinance, the Provincial Government can also supersede a Municipal Committee after such enquiry as may be necessary. Under the Rules called the West Pakistan Municipal Committees (Property) Rules, 1962, all properties specified in rule 3 are to vest in the Municipal Committee subject to any special reservations made or any special conditions imposed by the Provincial Government. By rule 7, the Municipal Committee is also given power to acquire property either by agreement with the owner of the property or under the Land Acquisition Act.

There is no material difference, therefore, between the Cantonment Boards and other Municipal Authorities but lands and buildings vested in the Municipal Authorities do not vest in the Provincial Government.

My examination, therefore, of these provisions, and in particular the provisions of the Cantonments Act of 1924, does not support the contention of the learned counsel for the Government of Pakistan that all lands situated within the limits of the cantonment areas vest in the Central Government. Section 108 of the Cantonments Act provides that all property of the nature therein specified which has been acquired or provided or is maintained by a Board "shall vest in and belong to that Board" and shall be under its direction, management and control. Similarly, under section 110, even where the Central Government has at the request of the Cantonment Board procured the acquisition of any land for the purposes of the Board on payment of compensation, the land shall "vest in the Board" which is a body corporate having its-own common seal and independent existence apart from the Government of Pakistan.

It is, however, contended that since by section 111 of the Cantonments Act, the Central Government has been given the power to make rules, and such rules have been framed and embodied in what is now known as the Pakistan Cantonment Rules, 1957, and therein it has been provided that the Government will have the right to resume any land vested in a Cantonment Board, the property, in effect, is the property of Government.

The rule on which reliance has been placed is rule 7. It reads as follows:-

"Resumption by Government.---(1) If at any time-

(i) the land transferred ,by the Government to the Board is not used for the object for which it was granted ; or

(ii) there has been, in the opinion of the Government, any breach of the conditions on which it was transferred; or

(iii) the land is required for a public purpose ;

the Government may resume the land without payment of any compensation other than the amount paid by the Board for such transfer and the market value at time of resumption of any buildings, works or improvement, subsequently erected, executed or made thereon by the Board, as the case may be."

This does not show that the right of resumption reserved by Government is without payment of any compensation at all. In fact, the amount paid by the Board for the original transfer and the market value at the time of resumption of buildings, etc. erected on the land will still have to be paid. All that this provides for is that the Government would have the right to resume the lands under certain conditions, if the land was originally granted to the Cantonment Board by Government.

Again rule 4 of these Rules of 1957 itself indicates that the property of a Cantonment Board may consist of properties vested in the Government for the purposes of the Central Government, as also of properties which it may acquire by purchase or lease, and therefore it does not follow that every inch of property situated in a Cantonment area is necessarily property vested in the Central Government. If there is any such property which is vested in the Central Government and is as such in the registers of immovable property maintained by a Cantonment Board then such property will be entitled to exemption under the provisions of section 4 of the Urban Immovable Property Tax Act itself and not de hors the said Act. Similarly the provisions of rule 9 of the Property Rules of 1957, giving the Government a right to prescribe conditions under which class `C' lands can be leased or otherwise alienated by the Cantonment Board, do not negative the ownership of the property by the Board. The Board being a statutory body under the ultimate control and supervision of the Government has, to most cases, to act with the consent and approval of the Government or in accordance with the powers and functions delegated to it. Such delegation may be conditional or unconditional. If the delegation is conditional, theft the conditions will have to be observed not as a limitation on the rights of property of the Board but as statutory obligations laid down by the statute creating the Boards and giving them powers and functions.

In support of the contention that the word "vest" used in section 108 of the Cantonments Act is a word of variable import not having a fixed connotation and does not necessarily mean "vest in title", learned counsel has referred us to a decision of the Indian Supreme Court in the case of the Fruit & Vegetable Merchants Union v. The Delhi Improvement Trust (A I R 1957 S C 344). We have no cavil with the proposition that the word "vest" does not by itself, connote "vest in title"; but where it is used in conjunction with the word "belong" we find it difficult to give it any other meaning. The words used in section 108 of the Cantonments Act are as already pointed out, "shall vest in and belong to that Board" and, therefore, the clear implication of these words is that they not only vest in possession but, also in title. In any event, the decision in the case cited is based not so much on the meaning of the word "vest" but on the construction of the agreement by which the land in dispute in that case was conveyed by the Government to the Trust. The words used were "the Trust shall hold and manage the said Nazul Estate on behalf of the Government" and, in these circumstances, the Indian Supreme Court felt that the agreement could not be construed as transferring the title of the Nazul lands from the Government to the Trust.

There is no evidence before us that any Nazul land was transferred to any Cantonment Board, and if so, on what terms and conditions. Indeed, by agreement, the parties have not led any evidence at all in this case but have merely sought a declaration on the question of law simpliciter. If there be any Nazul land which has been transferred to any Cantonment Board upon any such conditions as those mentioned in the case cited, then we have no hesitation in saying that we too would come to the same conclusion.

Our view that it is not a necessary implication of the Pakistan Cantonment Property Rules, 1957, that all land within a cantonment is Government property, also seems to find support from a decision of the Privy Council in the case of Secretary of State for India-in-Council v. Satish Chandra Sen (57 I A 339). In this case Sir George Lawndes after dealing with the history of the Barrackpore Cantonment repelled the contention that under the Cantonment Regulations and the rules framed thereunder for the control of buildings in Cantonments "all land within a Cantonment belongs prima facie to Government" in these words:-

"It is contended for the appellant that these rules, and in particular para. 2 of clause 6, declare all lands in cantonments to be the property of Government. Their Lordships are not satisfied that this is the necessary, implication, though the rules certainly suggest that some, and probably the greater part of the land was at that time Government property."

The case of Kaikhusru Aderji Ghaswala v. The Secretary of State for India-in-Council (38 I A 204=I L R 36 Bom.) has no direct bearing on the question now before us. There, the question was as to what were the terms of the tenure under which the defendants held the land in the cantonment. The Government had in that case filed a suit for ejectment. The defendants resisted it claiming that they held the land as private property on the ground that their predecessors in title were owners of the land at the time the cantonment was established. It was held, on a consideration of the delimitation of the Poona Cantonment and the regulations affecting it as summarised in Aitchison's Cantonment Code of 1836 and Jameson's Cantonment Code of 1850, that though permission to occupy ground was frequently given, especially for the building of officers' houses or bungalows, such permission carried with it no sort of proprietary right and the buildings were liable to expropriation at a price to be fixed by the authorities, and the permission of the Commanding Officer was necessary even for the letting or sale of the house so built. In the circumstances, even if it was established that the defendants had built the house at the time when the cantonment was established, there was still a strong probability that they were compensated as owners.

It may at this stage also be pointed out that in Basu's Commentary on the Constitution of India, Volume II, 3rd Edition at page 375, it is stated, that:

"The concept of `property' indeed, is identical with the meaning of the ordinary expression `belonging to'.

The words `property' and `belonging to' . . . . . are in fact convertible terms; you can hardly explain the one except by using the other. A man's property is that which is his own, that which belongs to him. What belongs to him is his property."

The authority cited for this view is Heritable Reversionary Co. v. Mullar (1892 A C 598).

This quotation would seem to indicate that the words "vest" and "belong to" in section 108 of the Cantonments Act are not without significance. They not only show a vesting in an unlimited sense but also vesting in title arid, g therefore, the contention of the learned Deputy Attorney- General appearing on behalf of the Government of Pakistan that all land in a cantonment area belongs to the Central Government is not, in my view, supported either in, principle or by any authority.

The next contention of the learned Deputy Attorney-General is that all lands held by Cantonment Boards are held for public purposes and are therefore, in any event, exempt under the provisions of the Urban Immovable Property Tax Act itself. In this connection, he has referred us to section 116 of the Cantonments Act to show as to what are the duties of a Board and to point out that even constructing of markets is a proper public function entrusted to a Board. Thus if in a market so constructed shops are let out on rent, or some fee is levied as a toll in the market place would not render the purpose merely the earning of profit; but it would still be a public purpose being discharged by the Cantonment Board in performance of the duties imposed upon it by section 116 of the Act. The levy of the fee or rent would merely be incidental and would neither deprive the property of its true character nor alter the user of the property from a public purpose to merely profit-making.

Learned counsel has sought to substantiate his argument by reference to the decision of the Privy Council in the case of Hamabai Framjee Petit v. Secretary of State for India-in-Council (A I R 1914 P C 20=I L R 39 Bom. 279). In this case, the question was as to whether the providing of housing accommodation for Government officials by the erection of dwelling houses for their private residences was a public purpose. This is a classical decision of the Privy Council wherein “public purpose" has been defined as including "an object or aim in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned". I have no cavil with this enunciation and if a property is really used for a public purpose then the fact that a fee is levied for the user of such property would not render the user a non-public purpose, Thus, for instance, the provision of slaughter houses at which a fee is charged for slaughtering cattle will not render the slaughter-house a merely profit-making concern. It would still remain a premises used for a public purpose.

The learned counsel has also referred us to two other decisions, one of the Indian Supreme Court in the case of The State of Bihar v. Sir Kameshwar Singh (AIR 1952 S C 252), and the other of the Dacca High Court m the case of Ajit Kumar Das v. Province of East Pakistan (P L D 1958 Dacca 280), to support his contention that "public purpose" is a variable term and its meaning must depend upon the context of the legislative language used and the object sought to be achieved. I do not feel the necessity of dealing with these decisions in any detail, for, there is no dispute that if the property is used for a valid public object, then the l mere fact that a fee is charged for such user will not render the user non public or convert it into a mere profit-making venture.

As against this, the learned Assistant Advocate-General for the Province of Punjab has contended that the letting out of shops or quarters is not a public purpose, and in support of this contention has relied upon a decision of the Privy Council in the case of Chhatra Kumari Devi v. Mohan Bikram Shah (A I R 1931 P C 196). This decision has no bearing on this question at all, for, there the question was as to whether the trustee is the owner of the trust property or not. It has nothing to do with the question of a public purpose at all.

In the Dacca case of Abdus Sobhan Sowdagar v. Province of East Pakistan (14 D L R 486), the definition of public purpose given in Framjee's case was repeated and it was added that such interest "must be directly connected with the order that is being made and must be vitally concerned with the said order. There is again no cavil with the proposition that there will be no public purpose in any undertaking or venture in which the public interest is only served indirectly and in a circuitous way.

The question that has to be considered next is as to the validity of the tax itself. Now, the tax sought to be levied by the Urban Immovable Property Tax Act is a tax on the annual value of buildings and lands in a rating area specified by the Government by a notification. Taxes on lands and buildings come within item 75 of the Fifth Schedule to the Constitution of 1956, and with regard to these, the Provincial Legislatures had by reason of the provisions of clause (31 of Article 106 of the said Constitution exclusive power to make laws for the provinces or any part thereof. The taxation was accordingly validly imposed by a competent Legislature in the proper exercise of its powers. The only question was whether a cantonment area formed under Article 106 of the Constitution a part of the Province, which made the law. If it did, then the law was applicable "there; but, on the other band, if a cantonment area is an island within a Province in respect of which the Provincial Legislatures can not at all legislate or is an area which is specifically exempted from the operation of such legislation by anything in the Constitution, then the law will have no application at all.

Even in 1940, under the Government of India Act of 1935, taxes on lands and buildings came within item 42 of the Provincial Legislative List in the Seventh Schedule, with regard to which the Provincial Legislatures had, under section 100, exclusive power to make laws for the Province or any part thereof. The only exemption granted under section 154 of the Government of India Act, 1935, was in these terms:-

"Property vested in His Majesty for purposes of the Government of the Federation shall, save in so far as any Federal law may otherwise provide, be exempt from all taxes imposed by, or by any authority within, a Province."

This exemption was continued under the 1956 Constitution by clause (2) of Article 112 which provided:

"Property vested in the Federal Government shall, save in so far as an Act of Parliament may otherwise provide, be exempt from all taxes imposed by, or by any authority within, a Province."

Similar exemption was given to the property of the Central Government by Article 137 of the 1962 Constitution. In the Interim Constitution of 1972, taxes on lands and buildings continued to be a subject in the Provincial Legislative List within the exclusive competence of the Provincial Legislature but Article 167 exempted the property of the Federal Government from taxation under any Provincial Law. In the permanent Constitution of 1973, however, taxes on lands and buildings are not enumerated in either of the two lists given in the Fourth Schedule and, therefore, by reason of the provisions of clause (c) of Article 142, the Provincial Assembly has exclusive power to make laws with respect to any matter not enumerated in either of the lists. Article 165 of this Constitution, however, repeats the exemption granted to the Federal Government in respect of its property or income from taxation under any Act of the Provincial Assembly.

The position, therefore, that emerges is that, under all the Constitutional provisions, the property of the Central Government is exempted from taxation, and it is the Federal Legislature which has the power to legislate, in respect of a cantonment area but with regard to certain matters only.

According to the Interim Constitution of 1972 and the permanent Constitution of 1973, the legislative field covers only Local Self-Government in such area; the Constitution and powers within such areas of cantonment authorities, the regulation of housing accommodation in such areas and the delimitation of such areas. Under the 1956 Constitution also, the Federal Legislature had power to legislate with regard to "delimitation of cantonment areas; local self- Government in cantonment areas; constitution, powers and functions, within such areas, of cantonment authorities; control of house accommodation (including control of rents) in such areas". Under the 1935 Act, the power given to the Federal Legislature was to legislate for "local self-Government in cantonment areas, the constitution and powers within such areas of cantonment authorities, the regulation of house accommodation in such areas, and the delimitation of such areas".

In the 1962 Constitution, however, the powers are a little wider. It reads as follows:

"(e) cantonment areas, including-

(i) the delimitation of such areas;

(ii) local self-Government in such areas, the constitution of local authorities for such areas and the functions and powers of such authorities; and

(iii) the control of housing accommodation (including control of rents) in such areas."

Nevertheless, if we read the legislative lists in the manner that they should be read, namely, that if there is a specific provision for a special subject in a particular item of a particular list, then that subject falls within that item of the said list and not under any general item. Since taxation on lands and buildings is specifically mentioned in the Provincial Legislative List as a separate item of legislation, legislation in respect of taxes on lands and buildings comes within the competence of the Provincial Legislature and the law so made would apply in any part of the Province making the law, unless the area sought to be excluded has been specifically exempted under the law or under any constitutional provision. I have not been able to discover K anything in any constitution or any law to show that a cantonment area is not to be included within the territorial limits of a Province in which it is situated. In the circumstances, I have come to the conclusion that the claim of the Central Government that all lands and buildings included in the cantonment area are exempt from payment of the Urban Immovable Property Tax imposed by the Provincial Legislatures of the Provinces of Pakistan is not tenable. The exemption given by the Constitution to the property of the Central Government will of course be available, and it has been made available even under the provisions of the Provincial Acts themselves. What is the property of the Central Government is a different matter and will have to be decided in each case with reference to the relevant documents. If the property is Government property which has been made over to the Cantonment Board or has been leased to the Cantonment Board, then it would be entitled to the exemption granted by the Constitution as being property vested in the Central Government. The mere fact that a property is situated in the cantonment area does not however, make it a property of the Central Government, because, there may well be other kinds of property vested in the Board which is not property vested in the Central Government.

The other properties of the Boards, which are used for public, educational or charitable purposes will also be entitled to the exemption given by the Provincial Taxation Acts. The question as to whether a particular property is exempt under these Acts will be a question of fact to be considered by the Assessing Authority in each case. We regret, therefore, our inability to grant the declaration prayed for by the Central Government in the terms indicated. Since it would neither be possible nor desirable for this Court to go into each particular item of property and to determine its liability, this must be left to be done by the Assessing Authorities concerned with reference to the facts of each individual property in the light of the observations herein made.

In the circumstances, this suit must be dismissed; but, in view of the fact that the contesting parties are Governments, there will be no order as to costs.

K. B. A.

Suit dismissed