PESHAWAR, Aug 28: The Peshawar High Court on Tuesday stopped the federal government from collecting the Gas Infrastructure Development Cess (GIDC) from an industrial unit of Khyber Pakhtunkhwa until further orders.

A bench comprising Justice Waqar Ahmad Seth and Justice Roohul Amin Khan issued a stay order to this effect after preliminary hearing into a writ petition of Rahman Cotton Mills against the levy of GIDC by the federal government through the GIDC Act, 2011.

It also put on notice the respondents, including the federation of Pakistan through petroleum and natural resources secretary, Sui Northern Gas Pipelines Limited (SNGPL) through it chief executive, the SNGPL general manager, and Oil and Gas Regulatory Authority (Ogra) through its chairman.The GIDC Act 2011 was passed by the National Assembly last year to carry out projects, including Iran-Pakistan gas pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, LNG import and LPG supply enhancement projects.

Several other industrial units of Khyber Pakhtunkhwa have also filed identical writ petitions with the court, which will hear them in a day or two.

The petitioners have requested the court to declare the levy of GIDC illegal and unconstitutional.

Shumail Ahmad Butt, lawyer for the petitioner, said Khyber Pakhtunkhwa produced more than 370 MMCFD, whereas its average consumption was around 150 MMCFD, around 40 per cent of the gas it produced.

He added that except Punjab, other three provinces were self-sufficient in production of natural gas.

Mr Butt said controversial cess was introduced through a money bill passed by the National assembly following which it was assented by the President of Pakistan on Dec 13, 2011. He said through the Act, the government had imposed a cess on the sale of natural gas by SNGPL.

He said the levy of infrastructure cess was beyond the legislative competency of the federation and parliament, while the passage of GIDC Act 2011 as a money bill was objected to by the Senate and the government.

He said the relevant Senate standing committee left the matter for a future litigation indicating that the judiciary could overrule the certification by the speaker of National Assembly of the Act 2011 as money bill.

Mr Shumail Butt said the federal government had first moved a summary to the Council of Common Interests (CCI) in terms of Article 154 of the Constitution read with Entry No 2 of Part II of the Federal Legislative List, but strong opposition by provinces led to its withdrawal from the CCI unilaterally without waiting for its formal decision.

He said the matter was processed in grave violation of Rules of Business even without the concurrence of relevant ministry, the petroleum and natural resources ministry, who was insisting to get the approval of CCI, in terms of a legal advice given by the law, justice and parliamentary affairs division.

Mr Butt said the government further enhanced the burden on the petitioner by revising the said cess upwardly for industrial consumers through the Finance Act, 2012. He added that the cess was enhanced from Rs13 per MMBTU (million metric British thermal unit) to Rs100 per MMBTU, which further worsened the situation as not only the overall industrial tariff was increased by more than 20 per cent but the cess itself saw an unbearable increase by 770 per cent.

He said while introducing the Money Bill, 2011, Rules 16 and 27(v) of the Rules of Business, 1973 were violated the instrument was introduced without formal approval of the Cabinet.