government files CMA

KHUDAYAR MOHLA

ISLAMABAD: The federation filed a Civil Miscellaneous Application (CMA) in the Supreme Court on Saturday to substantiate its review petition against the apex court's verdict that had declared Gas Infrastructure Development Cess (GIDC) as a fee.

On 22 August 2014, a three-member bench of Chief Justice Nasirul Mulk declared that the GIDC is a fee and not a tax, saying, "The cess could not have been introduced through a Money Bill under Article 73 of the Constitution - the same was, therefore, not validly levied in accordance with the Constitution".

The federation filed the CMA through Secretary Ministry of Petroleum & Natural Resources and submitted that while passing the impugned judgment, the import of Section 2,3 and 4 of the GIDC Act, 2011 was not taken into proper consideration by the apex court inasmuch as it was not noticed that the cess was levied on the consumers of natural gas which included the users of CNG and users of other products like fertilizers.

The Secretary submitted that the court has already held that GIDC was passed on to the consumers of CNG, adding that the respondents were only collecting the cess from the consumers.

"In light of this factual and legal aspect of the matter, the findings of this Hon'ble court that cess levied under the GIDC Act, 2011 with utmost respect, may not be correct for the reason that there was no relation of payment of any 'fee' with any services rendered," the CMA added.

The Secretary further submitted, "moreover, this Hon'ble Court also failed to take into consideration the use of cess collected under Section 4 of the GIDC Act, 2011 and, therefore, the element of payment of fee and any service rendered in the aforesaid context was less than certain because the cess collected could be used for more than one purpose including the same being used for the price equalization".

The CMA maintained that while determining whether the cess could be levied as a tax under Article 73 of the Constitution as a part of Money Bill, the provisions of Article 73(4) and (5) were not taken into consideration at all.

The Secretary pointed out that it is an admitted position that while including cess in the Finance Act, 2011, the Speaker of the National Assembly had issued a certificate treating the same as a Money Bill which could not be called in question before any Court.

"This aspect of the mater totally escaped the attention of this Honorable Court," he submitted.

"That even if the test laid down in paragraph 19 of the impugned judgment is accepted, it is most respectfully submitted, this test is inapplicable to the facts or the present case in as much as the amount of cess is paid by the consumers and not the companies listed in the 2nd schedule of the GIDC Act 2011," it is stated.

"Every unit of electricity generated by the use of gas includes the cess paid thereon under the GIDC Act 2011, the X factory price of every sack of fertilizer includes the cess paid thereon under he GIDC Act 2011, and the cost of every mile traveled by using CNG includes the cess paid thereon under the GIDC Act 2011- Thus there is no relation between the levy and any service rendered," the CMA added.

It is worth mentioning that Attorney General for Pakistan (AGP) Salman Aslam Butt had prayed before the court to review its earlier order in the current matter, arguing that the government imposed the GIDC for gas infrastructure development. Butt had argued that the apex court's verdict in the matter had adversely affected the development projects as the incumbent government was facing difficulties in carrying out projects and that it had to abandon uplift activities in the gas sector.

To which the Court had issued notices to 63 respondents, including Oil and Gas Regulatory Authority (OGRA) and Sui Northern Gas Pipelines Limited (SNGPL) and adjourned the hearing of case for an indefinite period.