Ex-post facto approval by cabinet: Notification deemed to be valid, SC rules

ISLAMABAD: The Supreme Court held that a notification that has received ex-post facto approval by the cabinet is deemed to be valid from the date of its approval and, thus, cannot be made applicable retrospectively.

A three-judge bench, headed by Justice Munib Akhtar, and comprising Justice Syed Hasan Azhar Rizvi, and Justice Shahid Waheed ruled that against the judgment of the Balochistan High Court (BHC) dated 17.04.2023.

The respondents – Attock Cement Pakistan Limited, DG Khan Cement Company Limited – being registered public limited companies, are involved in the business of producing and selling cement. They entered into mining lease agreements with the Balochistan government.

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Secretary Mines and Minerals Department, Balochistan vide notification No SOT(MMD)4-1/2017/748-68 dated 06.09.2017 revised and enhanced the rates of application fee relating to mineral titles and mineral concessions mentioned in the first schedule, rates of annual rentals mentioned in the second schedule, and the royalties mentioned in the third schedule, part-II and part-III of the Balochistan Mineral Rules, 2002.

The respondents being aggrieved by the increased rates challenged the said notification through constitutional petitions before the BHC, which were partly allowed.

The primary question that arose in the present case was “whether a notification that has received ex-post facto approval by the cabinet can have a retrospective applicability?”

Section 2 read with Section 6 of the Regulations of Mines and Oil Fields and Mineral Development (Government Control) Act, 1948,authorises the appropriate government to frame rules regarding, inter alia, determination of the rates at which royalties, rents and taxes shall be payable, among various other matters. Consequently, the Rules of 2002 were framed.

Rule 102(1) of the Rules of 2002 provides that the royalties shall be charged at such rates as may be notified by the Balochistan government from time to time. Article 129 of the Constitution mandates that the executive authority of the province is to be exercised on behalf of the Governor by the provincial government, which includes the Chief Minister and Provincial Ministers. Article 130 of the Constitution defines the Cabinet as a ministerial body with the chief minister serving as its leader.

In a seminal judgment of Mustafa Impex supra, the Supreme Court has considered constitutional meaning of “federal government,” that by necessary implication also extends to “provincial government” and has held, that if any power is conferred on the government concerned, they can be exercised in the cabinet and by cabinet decisions, and not otherwise.

The judgment said that the perusal of the record reveals that neither the chief minister nor the Cabinet made any decision regarding price fixation prior to the issuance of the impugned notification which was solely passed by the secretary Mines and Mineral Department, Balochistan. Subsequently, on 01.02.2022, the cabinet authenticated the impugned notification through ex-post facto approval.

The judgment said that the High Court has correctly determined that the impugned notification takes effect from the date of authentication/approval by the cabinet, i.e. 01.02.2022. This interpretation aligns with the principle that if the provincial cabinet provides ex-post facto approval, the validity of the notification is recognised from that date of approval and cannot be applied retrospectively.

Copyright Business Recorder, 2024