Defiance of SC ruling: Bulletproof vehicles from Germany win green signal

ECC clears duty-free import of 35 vehicles for VVIPs

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet approved on Wednesday duty-free import of around three dozen armoured vehicles for VVIPs in what legal experts believe is an act of defiance against a Supreme Court ruling.

On August 18, the apex court restrained the prime minister or any other decision-making body of the government from taking fiscal decisions without a prior approval from the entire cabinet.



Despite this ruling, the ECC gave the nod for the import of 35 bulletproof vehicles from Germany and waived off all taxes and duties. Interestingly, a summary moved by the foreign ministry for the import of the vehicles was not made part of the ECC agenda.

“For the upcoming Saarc conference and other future events, the ECC approved exemption from all taxes and duties the import of armoured and security vehicles for international dignitaries,” the finance ministry said in a statement.

The finance ministry released Rs821.9 million in supplementary grant to the foreign affairs ministry in January for the import of the vehicles. Although the government claims the vehicles are being imported for foreign dignitaries who will be attending the Saarc conference to be held in November, the sheer number of vehicles suggests these are likely to be used by top government officials.



In its August 18 ruling, the Supreme Court has defined the federal government as a collective entity comprised of the cabinet, prime minister and federal ministers. The ECC, being just a body of the cabinet, cannot be described as federal government.

Sources said the issue of implications of the top court order was raised in the ECC meeting but the chairperson, Finance Minister Ishaq Dar, went ahead with his decision to approve duty-free import of the vehicles.



According to the court ruling, neither a secretary, nor a minister or the prime minister are the federal government and the exercise, or purported exercise, of a statutory power exercisable by the federal government by any of them, especially in relation to fiscal matters, is constitutionally invalid and a nullity in the eyes of the law.

Similarly, the federal government, i.e. the cabinet, and not the prime minister, on its own can only authorise budgetary expenditure or discretionary governmental expenditure.

Finance ministry officials say the matter will now be placed before the federal cabinet. In its last meeting, the cabinet decided that ECC’s decisions will be placed before it for vetting after the SC ruling. However, the cabinet’s decision was against the spirit of the SC order that seeks prior approval of the cabinet, not the ex-post facto approval.

“Only the federal cabinet can waive off duties after the Supreme Court's historic ruling, and the ECC decision is in violation of the apex court judgment,” said Supreme Court Bar Association President Syed Ali Zafar.

Instead of spending money on importing expensive vehicles, the government should have spent this money on improving security of schools, hospitals and courts.

“The ECC cannot waive off duties without the consent of parliament,” said tax expert Dr Ikramul Haq. He said the top court ruling clearly states that legislative functions cannot be delegated to the executive.

He said the ECC decision was also against Article 77 of the Constitution that defines powers on taxation matters. He said that for lowering taxes the bill has to be first approved by the federal cabinet before table in parliament and such decisions can no more be taken on the basis of summaries of the ministries.



PSM salaries

The ECC also approved paying salaries for the months of April and May, amounting to Rs760 million, to the employees of Pakistan Steel Mills (PSM). The ECC moved only after Pakistan Tehreek-e-Insaf Chairman Imran Khan raised the issue of non-payment of salaries to the employees during his recent visit to Karachi.

The government has shut down the country’s largest industrial unit since May last year after injecting Rs28.5 billion in bailout. There are unconfirmed reports that the government is deliberately keeping the mills closed, allegedly to give benefits to the traders of the steel products.

The ECC did not take a decision on payment of salaries for the remaining three months, June to August.

The ECC also approved payments of Rs322.1 million for clearing gratuity and provident fund claims of the PSM’s retired employees. The gratuity payment to the retired PASM employees was due since April 2013 and Provident Fund since April 2015. The meeting was informed that all the payments on both these accounts are cleared before the above mentioned period.

The ECC also allowed Pakistan State Oil (PSO) to proceed with finalising the addendum to the existing product sale and purchase contract with Kuwait Petroleum Corporation for supply of furnace oil and jet fuel with the direction to make efforts to improve the payment terms.

Published in The Express Tribune, September 8^th, 2016.