Law: Income Tax Act, 1922

Section: 2,2(9),3

Income-tax Act (XI of 1922)---Ss. 2 (9) & 3-Local Authority-Thal Development Authority a local authority and immune from taxation-Notice of demand issued to Authority, held, illegal-West Pakistan Thal Development Act (XV of 1949). The powers conferred on such Authority were at least as wide as those conferred on any local authority and include the power to levy taxes. Therefore, as the said Authority was a local authority and was not liable for income-tax, it follows that the notices of demand issued to it and to the respondent were illegally issued and the question whether the dispute should have been examined by the Court under Article 184 (1) of the Constitution, is of academic interest only, and no purpose would be served by granting leave to examine the question. Deputy Managing Director, National Bank of Pakistan and others v. Ataul Haq PLD 1965 SC 201 ref. ORDER DORAB PATEL, J.-The That Development Authority (hereinafter called the said Authority) was set up as a body corporate under the West Pakistan Thal Development Act (XV of 1949) (hereinafter called the said Act). But, although the said Authority was a body corporate, it had been conferred powers at least as wide as those of any local Authority. 1t was empowered under sections 42 and 43 to levy taxes and to maintain an authority fund. It was empowered under section 21 to frame schemes for development' by the acquisition to land under the Land Acquisition Act and the powers conferred by this section expressly included powers to lay out towns, mandis, market places, villages, roads, break up land for cultivation, etc. Now, in the exercise of the very wide powers conferred on it, it had set upon sugar mill at Leiah, which was run by a public company known as the Thal Industrial Corporation Ltd. But the said Authority" acted as the managing agent of this company and had received remune­ration for its services. The terms of the remuneration are not relevant and it is sufficient to state that by a notification dated 31-5-1969, in the exercise of its powers under section 81 of the said Act, the Provincial Government dissolved the said Authority and appointed its Chief Secre­tary as Administrator in…

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