Pakistan News

High court stays recovery of gas cess

High court stays recovery of gas cess

PESHAWAR: A Peshawar High Court bench on Monday issued a stay order suspending the recovery of billions of rupees worth of arrears by the Sui Northern Gas Pipelines Limited on account of the Gas Infrastructure Development Cess (GIDC) from dozens of industrial units in Khyber Pakhtunkhwa.

Justice Mohammad Ibrahim Khan and Justice Ijaz Anwar issued notices to several respondents, including petroleum and natural resources secretary and SNGPL chief executive, for response to several petitions filed by textile mills, cement plants, steel mills and CNG stations against the arrears claimed by the SNGPL for the period during which the levy of GIDC was declared illegal and unconstitutional by the Peshawar High Court and Supreme Court.

The bench ordered the fixing of the petitions for hearing in Sept. It also asked the SNGP not to recover the impugned arrears on the account of GIDC until the next hearing.




The petitioners have requested the court to declare that the impugned demand of GIDC arrears through monthly gas consumption bills of the petitioners together with any consequent forcible measure of recovery are illegal and of no legal effect.

Seeks response of govt, SNGPL on petitions against recovery of GIDC arrears

They have also sought the court’s orders for the SNGPL not to recover the GIDC through monthly consumption bills.

Shumail Ahmad Butt and Ishaq Ali Qazi, counsel for the petitioners, said the GIDC was first introduced through the GIDC Act, 2011 but was declared illegal and unconstitutional by the Peshawar High Court and the said judgment was upheld by the Supreme Court.

However, the federal government 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.

The lawyers said the GIDC Act, 2015, was then challenged before the high court, which stayed the recovery of cess from dozens of petitioners over a year ago but finally dismissed those petitions and declared the 2015 law as valid. They said the petitioners had challenged that judgment in the apex court but in the meantime, the SNGPL had claimed arrears from them on account of GIDC for the period during which the previous law was declared illegal.

Mr Shumail Butt said the provisions of GIDC Act 2015 were not self-executing provisions and therefore, they could not be given effect without necessary subordinate legislation in shape of rules, which had not been framed so far

He said it was surprising to note that while including a staggeringly excessive amount in the name of GIDC arrears, the SNGPL had not cared to provide any breakup of original cess and hefty Late Payment Surcharge (LPS) nor has given any rationale for charging huge arrears pertaining to a period when the GIDC Act, 2011 was in vogue.

The lawyer said since neither any rules had so far been framed and competently promulgated nor had any other form of required delegated legislation provided the mode or manner of doing so, no cess could be billed, collected and recovered from the gas consumers.

Published in Dawn, August 22nd, 2017

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