PESHAWAR: A Peshawar High Court bench on Tuesday temporarily suspended the collection of the Gas Infrastructure Development Cess (GIDC) from several industrial units of Khyber Pakhtunkhwa until the filing of appeals by them with the Supreme Court against the high court’s recent decision to declare the cess legal.

While issuing a stay order, Justice Waqar Ahmad Seth and Justice Syed Arshad Ali disposed of around 32 petitions filed by Khazana Sugar Mills and several other industrial units and CNG stations seeking the court’s orders for respondents, including the Sui Northern Gas Pipelines Limited, to stop the recovery of the GIDC until filing of appeal before the Supreme Court.

They ruled that action on the bench’s judgment would remain suspended until the filing of appeal before the Supreme Court by petitioners.

Rules action on its anti-GIDC verdict to remain suspended until filing of appeals with SC

The petitioners have claimed that the federal government had to recover around Rs78 billion from the industrial sector in the province in line with the high court’s May 31 judgment to declare the GIDC lawful.

They claimed that the recovery of that amount in one go would badly hit the industrial sector in the province already facing hard times.

The GIDC was first introduced through the GIDC Act, 2011, but was declared illegal and unconstitutional by the Peshawar High Court and the said judgment was upheld by the Supreme Court. However, the federal government subsequently passed the GIDC Act 2015 and included Section 8 in it for recovery of arrears for the period for which the GIDC levy was declared illegal.

The said GIDC Act, 2015, was then challenged before the high court which stayed the recovery of cess from dozens of petitioners over a year ago.

These petitioners had contended that Khyber Pakhtunkhwa produced more than 400 million cubic feet per day (MMCFD) gas, which was 10 per cent of the country’s total gas production, whereas its consumption was at around 200 MMCFD, half of what it produced.

The petitioners said in May 2015, parliament passed the GISDC Act 2015 prompting the government to resume imposing GIDC at the rate of Rs263.56 per MMBTU for Region 1 and Rs200 per MMBTU for Region 2.

However, in the second round of litigation, the PHC declared the GIDC through GIDC Act 2015 legal and in accordance with the Constitution.

Qazi Ghulam Dastagir, Shumail Ahmad Butt, Ishaq Ali Qazi, Ishtiaq Ahmad and several other lawyers appeared for the petitioners.

The current petitions were filed under Order 41 of Rule 5 (2) read with Section 151 of the Code of Civil Procedure.

The lawyers said their earlier petitions were dismissed on May 31 but the detailed order had yet to be released.

They said all commercial consumers of gas in KP was party to the litigation and enjoyed the benefits of the high court’s interim order given over a year ago.

The counsel said after the dismissal of the petitions, a huge liability of the impugned cess would be payable by the petitioners in one go, which was impossible for petitioners to do as it would result in the closure of their businesses.

They said if the petitions were not accepted, the petitioners would suffer huge losses.

The lawyers said their clients had a very good case to plead as the same cess in the previous round of litigation was struck down and declared illegal by the court.

They said the high court was empowered to suspend operation on its order for a specific period or filing of an appeal before a court of competent jurisdiction.

Published in Dawn, June 21st, 2017