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PHC stays recovery of gas cess from industries

PHC stays recovery of gas cess from industries

PESHAWAR: The Peshawar High Court on Thursday stayed the recovery of arrears on account of Gas Infrastructure Development Cess (GIDC) from around 450 CNG stations and industrial units by the Sui Northern Gas Pipelines Limited (SNGPL) for the period for which the superior courts had declared the levy of such cess illegal.

After holding a preliminary hearing into six almost identical petitions, a bench comprising Chief Justice Mazhar Alam Miankhel and Justice Haider Ali Khan issued notices to the respondents including the federal government through the petroleum and natural resources ministry, SNGPL and Oil and Gas Regulatory Authority (Ogra) to file response in the case.

The bench observed that till the next hearing, the controversial arrears should not be recovered from the petitioners.

The next date of hearing will be fixed later.

The six petitions were filed by around 450 CNG stations and several industrial units in Khyber Pakhtunkhwa, requesting the court to declare the imposition and collection of GIDC arrears with any markup illegal.

They prayed the court to declare that they were not bound or required to pay GIDC arrears and that any coercive or adverse means threatened, applied or resorted to by the respondents, including the federal government and SNGPL, would be illegal.

Advocate Shumail Ahmad Butt appeared for the petitioners and stated that the GIDC was first introduced through the GIDC Act, 2011 but was declared illegal and unconstitutional by the Peshawar High Court and the Supreme Court.

He said the federal government recently passed the GIDC Act 2015 and included Section 8 in it for recovery of arrears for the period for which the GIDC levy was declared illegal.

He argued that the said introduction of Section 8 in the new GIDC Act 2015 without curing the defects pointed out by the superior judiciary in the earlier law amounted to encroaching upon the powers of judicial review available to high court and Supreme Court.

Butt also said Khyber Pakhtunkhwa produced more than 400 million cubic feet per day gas, which was 10 percent of the total production of gas in the country, whereas its consumption was at around 200 MMCFD, roughly a mere 50 percent of what it produced.

He stated that except Punjab, all provinces were self sufficient in production of natural gas.

Published in Dawn, June 19th, 2015

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