The Supreme Court Thursday noted there was no decision of the Council of Common Interests (CCI) regarding Gas Infrastructure Development Cess (GIDC).

During the proceeding, Makhdoom Ali Khan, a senior lawyer who represented CNG stations, informed the court that GIDC issue was never laid before the CCI.

A three-member special bench, headed by Justice Mushir Alam, heard 107 petitions/appeals of various textile mills, cotton mills, sugar mills, ceramics companies, chemicals, CNG filing stations, match factories, cement companies and aluminum industries regarding the GIDC levy.

Justice Faisal Arab said that the federal government after preparing a bill on GIDC can ask the CCI to consider it. Upon the policy of CCI, the changes could be made in the bill. The counsel said the CCI can say that levy can't be imposed on natural gas.

Makhdoom argued that Parliament can't bypass the CCI. Justice Mansoor Ali Shah said CCI is not empowered to legislate. He said after making decision on policy issue, the matter is sent to the Parliament for making law.

Makhdoom argued that in the CCI, the provinces will have an opportunity to present their stance on the matter. Justice Faisal Arab said the CCI was formed if on any issue there is disagreement among the provinces then it could be discussed and decision be made with mutual consensus.

The counsel contended that for enactment of levy, the CCI was completely ignored. Justice Mansoor observed that the CCI is a superb forum to sort out differences on vital national issues among the provinces, but many times its meetings could not be held due to various reasons.

Justice Mushir Alam questioned whether levy is a tax or fee. He said if need arises then they would send the matter to the Chief Justice of Pakistan to constitute a larger bench.

Justice Mansoor inquired why the levy is not a fee. Justice Faisal said that the levy could be called service fee, adding whoever will use the natural gas would have to pay the service fee.

Makhdoom said that according to the government, in future the people would have to pay service fee on the consumption of natural gas, which would not be applicable on the domestic consumers.

Justice Faisal Arab said natural gas would have to be imported in view of its shortage in the country, adding for that purpose pipelines have to be laid down.

The case was adjourned until next week.

The Peshawar High Court (PHC) on May 31, 2017, had rejected a set of petitions challenging the validity of the GIDC Act 2015 on the grounds that the transgression of legislative authority by the federation does not qualify as a breach of fundamental rights of citizens and therefore the petitioners before the high court were not aggrieved persons within the meaning of Article 199 of the Constitution and thus have no locus standi to challenge the validity of the act.

The PHC in its judgement had also held when Article 142 (a) is read with Article 154 of the Constitution, it became evident that the Parliament has the exclusive authority to legislate on Entries in Part-II of the Federal Legislative List of the Constitution.

Earlier, the GIDC Act was approved by the National Assembly in December 2011 imposing cess on gas consumers, other than the domestic sector, to develop infrastructure for a number of projects including Iran-Pakistan Pipeline Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline project and Liquefied Natural Gas (LNG) project, and for price equalization of imported alternative fuels including LPG (Liquefied Petroleum Gas).

On April 15, 2015, the apex court rejected the federal government's petition seeking review of its August 22, 2014 verdict and clarified that collection of then over Rs 100 billion under GIDC Act was not liable to be refunded to the industrial consumers of gas from whom it was recovered. The then GIDC law had legalized the cess recovery from the non-domestic consumers, mainly industries.

Later, on the expiry of the GIDC Ordinance, the National Assembly and Senate passed the GIDC Act 2015 and repealed the GIDC Act 2011.

Copyright Business Recorder, 2019