ISLAMABAD: The Federal Constitutional Court (FCC) suspended the recovery under the Gas Infrastructure Development Cess (GIDC) Act, 2015 from Saif and Kohat Textile Mills.
A two-judge bench, comprising Justice Aamer Farooq and Justice Rozi Khan Barrech heard the appeals of Saif Textile Mills, Kohat Textile Mills and Frontier Foundry Steel Mills against the judgment of the Peshawar High Court (PHC) dated 16-09-2025.
The bench also restrained the Sui Northern Gas Pipelines Ltd (SNGPL) from taking any adverse action against the petitioners.
Advocate Shumail Butt, representing the petitioners submitted that his clients secured natural gas connections from the SNGPL to use natural gas in their industrial processes as well as for power generation.
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He informed that the SNGPL issued demand notices to his client for the payment of GIDC arrears accrued up to 31.07.2020 along with mark-up/late payment surcharge.
He stated that SNGPL has been charging the petitioners with the GIDC rate of Rs200/- per MMBTU (chargeable to Captive Power gas consumers) instead of Rs100/- per MMBTU (chargeable to Industrial gas consumers).
He told that the SNGPL has been continuously charging the impugned arrears to the petitioners, for recovery purpose, in the gas utility bills under the heading “Arrears/Aging” (Impugned charging in Utility Bills) in gross violation of Act, 2015.
He stated that the billing record reflects, the SNGPL has been charging LPS on the so-called dues and arrears of GIDC, and is compounding the amount every month on usurious interest rates, which is something not absolutely permissible under the GIDC Act.
Shumail said that the petitioners then filed a writ petition No. 872-P of 2021 before the Peshawar High Court, claiming exemption/benefits under the proviso of sub-2 of section 8 of 2015 Act on the basis that they have not passed on the burden of GIDC to their customers/clients. Despite that the PHC passed judgment against the petitioners.
He contended that the PHC judgment is wrong in fact and bad in law and is unsustainable. The impugned GIDC dues are in violation of Section 8(2) of the GIDC Act, 2015 and the petitioners are excluded from its applicability and thus the demands raised in this regard by the respondents is illegal, unlawful and ineffective upon the rights of the petitioners’ companies.
The impugned GIDC dues are violative of the Supreme Court judgments and thus not sustainable.
The petitioners are very much covered within the proviso “industrial sector” and thus seeking recoveries as illegal and unlawful.
Shumail said that forcing the petitioners to pay GIDC and more importantly impugned GIDC dues especially when the Province of Khyber Pakhtunkhwa is a net exporter of gas, it amounts to an exaction without any quid-pro-quo and thus violating the very spirit of cess.
The imposition of markup (which is otherwise always a product of contract) on non-payment of impugned GIDC dues is in fact a punishment in retrospectively.
Shumail said that the respondents are not entitled to recover the GIDC arrears and to make recourse to any coercive or forcible means such as disconnection or lessening or curtailing the supply or load of the gas, to ensure such unlawful recovery.
The bench after hearing the arguments suspended the recovery and directed the SNGPL not to take adverse action against the petitioners.
Copyright Business Recorder, 2026
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