ISLAMABAD: The Supreme Court on Thursday directed the federal government to inform by 2nd November what concrete steps have been taken for launching the gas infrastructure development projects since the announcement of the GIDC judgment.
Justice Mansoor Ali Shah asked Additional Attorney General Aamir Rehman to, after taking instruction from the government, inform the apex court on Monday (November 2) that, since the announcement of the GIDC judgment (August 13), what concrete steps had been taken to start the projects.
According to Section 4 Gas Infrastructure Development Cess Act, 2015, the cess shall be utilised for Iran-Pakistan Pipeline Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline project, LNG or other ancillary projects.
A three-judge bench, headed by Justice Mushir Alam, heard the review petitions of various textile mills, cotton mills, sugar mills, ceramics companies, chemicals, CNG filing stations, match factories, cement companies, and aluminum industries regarding GIDC levy.
Makhdoom Ali Khan, representing commercial and industrial entities, contended that no court in Pakistan had granted stay against any of the gas project.
He questioned was there any hope of initiating the projects in the near future.
He said that the government by June 2019 collected Rs295 billion under the GIDC head, but a fraction of it had been spent.
He argued that the ratio of the judgment did not connect with the operative part of it.
The collection of taxes should be in relation to the expenditure on the projects, he added.
He said the State losses the right to recover the cess, since the projects were not initiated.
The counsel argued that according to the federal government’s own figures that out of GIDC collection, an amount of Rs279,575,000 released on May 3, 2016, and Rs207,665,001 on April 23, 2019, which was utilised by M/s Inter State Gas System (ISGS) Limited for equity injection in TAPI project implementation company i.e. TAPI Pipelines Company Limited (TPCL).
He said Pakistan’s share in the TAPI was Rs30 billion, adding if the collected amount was spent on TAPI, North-South Gas Pipeline and underground storage then it would still have Rs125 billion for Iran-Gas pipeline.
Abid Zuberi advocate told that his client had not passed on the burden to the customers; therefore, the GIDC should not be recovered from him.
Barrister Ali Zafar arguing through video-link from Lahore Registry told that the Sindh High Court (SHC) passed decree in their favour, while the federal government had not filed appeal against it.
He presented the superior courts’ judgments, saying if the high court judgment had attained finality then the apex court judgment could not change it.
He, however, said if the appeal was pending before the high court then the Supreme Court judgment on that matter would prevail.
He said in the instant matter no appeal was filed against the single judge’s decision.
The Supreme Court on August 13, 2020, with a majority of two to one dismissed all the appeals and petitions of industrial and commercial entities, and held levy imposed under GIDC Act, 2015 is in accordance with the provisions of the Constitution.
“From the date of this judgment (13th August), we restrain the Federal Government from charging Cess which power of the Federal Government shall remain suspended until the Cess-revenue collected and that which is accrued so far but not yet collected is expended on the projects listed in Section 4 of the GIDC Act, 2015.”
The Supreme Court judgment directed, “All industrial and commercial entities which consume gas for their business activities pass on the burden to their customers / clients therefore all arrears of ‘Cess’ that have become due upto 31.07.2020 and have not been recovered so far shall be recovered by the Companies responsible under the GIDC Act, 2015 to recover from their consumers. However, as a concession, the same be recovered in twenty-four equal monthly installments starting from 01.08.2020 without the component of late payment surcharge.”
The judgment noted that Rs295 billion have already been collected towards Cess-revenue and together with the outstanding amount the total sum by the end of this month (August) would be in the vicinity of seven hundred billion rupees, which is more than what is the estimated cost of the projects mentioned in Section 4 of the GIDC Act, 2015, therefore directed, “From the date of this judgment (13th August), we restrain the Federal Government from charging Cess which power of the Federal Government shall remain suspended until the Cess-revenue collected and that which is accrued so far but not yet collected is expended on the projects listed in Section 4 of the GIDC Act, 2015.”
The case was adjourned until Monday.
Copyright Business Recorder, 2020
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