ISLAMABAD, Jan 31: Justice Shaukat Aziz Siddiqui of Islamabad High Court, deciding over 270 petitions, Thursday declared the Gas Infrastructure Development Cess Act 2011 unconstitutional and asked the gas distribution companies to return the amount they collected from industrial consumers as the Gas Infrastructure Development Cess (GIDC).

Domestic consumers of gas were exempt from the levy which the government imposed on the industrial sector, initially at the rate of Rs13 per MMBTU but later increased it to Rs100 per MMBTU, only to be reduced to Rs50 per MMBTU in September last year.

But Justice Shaukat Aziz ruled that “the GIDC Act 2011 is ultra vires to the constitution, void, and infringement to the fundamental rights, offensive to the principle of fair play, equality, transparency and social justice, good governance and it is tantamount to exploitation”.

He directed the department concerned to adjust the amount received from consumers as GIDC in the future billing.

Over 400 industrial units challenged the GIDC in the Islamabad High Court last September as the levy had increased their cost of production.

According to the petitioners, the levy was imposed to finance the infrastructure for the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan (IP) gas pipeline projects, or for price equalisation of other imported alternative fuels, including LNG and LPG.

Mian Mehmood-ur-Rashid, counsel for the petitioners, told the court that no timelines could be determined at present for even the start of these projects as well as the costs of the same and the government had imposed and started collecting the cess whose rates had been increased exorbitantly without any justification or rationale.

Advocate Niazullah Niazi, counsel for CNG stations owner argued that the GIDC Act was passed in haste and without fulfilling the constitutional requirements. The GIDC Act of 2011 was declared a Money Bill, however, the mandate of Article 73 was not followed in letter and spirit, he said.

Neither the copy of the bill was simultaneously transmitted to the Senate as required by Article 73. Increases in the rate of cess were communicated through a press release issued by the Oil and Gas Regulatory Authority (Ogra), he said, describing it as an illegal act because Ogra has no lawful authority to impose any levy over and above the tariff which had already been notified by it and that too through a press release.

Raja Javed Ashraf, additional attorney general, representing the federal government, however, argued that the GIDC was imposed in accordance with the guidelines provided by the Council of Common Interest, and after necessary legislation. It could not be undone because it had become the law of the land, he said.