PESHAWAR: The Peshawar High Court on Wednesday stayed the recovery of gas infrastructure development cess (GIDC) from several industrial units and CNG stations in Khyber Pakhtunkhwa by suspending action on a ‘controversial’ ordinance promulgated by the federal government lately.

The stay order was issued by a bench comprising Chief Justice Mazhar Alam Miankhel and Justice Malik Manzoor Hussain after preliminary hearing into 18 petitions against the GIDC recovery by the federal government.

The bench asked the respondents, including the petroleum and natural resources ministry, SNGPL and Oil and Gas Regulatory Authority, to stop action on the GIDC Ordinance 2014 through which the federal government is empowered to levy the cess.

Editorial: Gas infrastructure cess

It issued notice to the three respondents asking them to submit written replies to the petitions and asked the SNGPL not to disconnect gas supply to petitioners due to non-payment of the cess.

The bench directed petitioners, including dozens of industrial units and CNG stations, to produce bank guarantees at the rate of last year’s average cess paid by them.

Asks SNGPL not to suspend gas supply to petitioners over GIDC non-payment

The GIDC was earlier levied in 2011 by the federal government by enacting the GIDC Act 2011 with the objective to develop different projects, including the Iran Pakistan (IP) Gas Pipelines Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipelines project, LNG Import Project and LPG Supply Enhancement Projects.

The said GIDC was declared unconstitutional by the PHC on June 13, 2013, and the judgment was also upheld by the Supreme Court on Aug 22, 2014.

A panel of senior lawyers including Syed Arshad Ali, Shumail Ahmad Butt, Ishtiaq Ahmad and Yasir Khattak, who appeared for the petitioners, contended the federal government had promulgated the controversial ordinance on Sept 24, 2014, and it was aimed at frustrating the judgments of the Supreme Court and the high court.

They argued the PHC in its judgment while declaring the GIDC Act 2011as illegal had had directed the SNGPL to refund the already recovered cess to the petitioners or adjust it in their monthly bills.

The lawyers added that in the ordinance the government had also included section 8 which was aimed at stopping the refund of the earlier recovered cess.

They requested the court to stay the imposing or recovery of the said cess as shortly the SNGPL would start recovering it through monthly gas consumption bills.

Arshad Ali said the promulgation of the present ordinance was with mala fide intentions as once the levy of the cess was declared unconstitutional and illegal federal government had no powers to again introduce it through an ordinance.

He said the levy of GIDC was beyond the legislative competency of the federal government. The lawyer said the impugned ordinance was unconstitutional and illegal for all the reasons on which the 2011 Act and its amendments had been assailed and were accordingly prevailed upon in the apex Supreme Court.

The petitioners have contended that the Khyber Pakhtunkhwa Province produced more than 390 MMCFD of gas, which was 10 per cent of the total production of gas, whereas its consumption was only around 200 MMCFD.

They added that except for Punjab, all the other three provinces were self-sufficient in production of natural gas.

The petitioners said the entire infrastructure to import gas, LNG or LPG was to mainly bridge demand-supply gap of Punjab only and it would be cruel to inflict onerous burdens upon consumers of Khyber Pakhtunkhwa when they would actually see no augmentation of infrastructure within their territory.

They said the federal government already collected a gas development surcharge through the Natural Gas (Development Surcharge) Ordinance, 1967 for same very purposes of infrastructure development.

Published in Dawn, October 16th, 2014