SNGPL ordered to not disconnect supply of CNG pumps, industrial units

PHC had earlier suspended the Gas Infrastructure Development Cess Ordinance.

PESHAWAR: The Sui Northern Gas Pipeline Limited (SNGPL) was ordered on Monday to not disconnect the gas connections of all those CNG pumps and industrial units that have not paid their Gas Infrastructure Development Cess (GIDC).

The order was issued by a bench of the Peshawar High Court (PHC) comprising Justice Yahya Afridi and Justice Ikramullah Khan while hearing a petition and a contempt of court application filed by several industrial units. The bench also ordered the petitioner to submit their indemnity bonds within two days.



A panel of lawyers representing the petitioners, comprising Shumail Ahmad Butt, Yasir Khattak and Isaac Ali Qazi, argued before the bench, saying the PHC on October 15 suspended the Gas Infrastructure Development Cess 2014 Ordinance. Butt told the bench the PHC has also ordered SNGPL to not disconnect the gas connections of those industrial units and CNG pumps which had paid indemnity bonds but the petitioners were served notices for disconnections despite the clear court order.

Butt requested the court to consider the government in contempt of court for issuing disconnection notices and thus, he argued, proceedings should be initiated against the government.

SNGPL Senior Engineer Taj Ali appeared before the PHC and told the bench the company is ready to fully comply with the orders of the court. He added gas connections will not be disconnected from those industrial units and CNG pumps which had submitted indemnity bonds.

The court then ordered those units and pumps who had not submitted indemnity bonds to do so within two days. It also ordered a date for the case be fixed to be heard by a bench headed by the PHC chief justice.

On October 15, Chief Justice Mazhar Alam Miankhel and Justice Malik Manzoor Hussain suspended an order of the federal government under which it started collecting GIDC from industrial units and CNG pumps and sought reports from the government.

At the previous hearing, Butt said the act was challenged in the PHC and was declared illegal; the court had ordered the money collected from consumers on monthly bills be adjusted in future bills or they be repaid in lump sums. The same order was endorsed by the Supreme Court in August 2014.

“There was no meeting of the Senate and National Assembly in September but Gas Infrastructure Development Ordinance 2014 was imposed by the federal government which was meant to close the way of repayment of collected money which was already declared illegal,” the court was told through a petition filed by Swat Ceramics Company Private Limited on behalf of 15 industrial units and 30 CNG pumps through Butt.

The petitioner had said industrial units were paying various taxes but the federal government started levying cess at the rate of Rs13 per Million Metric British Thermal Unit (MMBTU) through the GIDC Act 2011 which was raised to Rs100 per MMBTU the next year. The petitioner added that later through a notification on September 7, 2012 the respondents (The secretary of the petroleum ministry, chief executive of SNGPL, general manager of SNGPL K-P and director general of OGRA) reduced the rate of GIDC from Rs100 to Rs50 per MMBTU for the category of industrial including captive power and fertilizer fuel stock.

The petitioner had added in 2013 the PHC declared the collection of cess constitutionally illegitimate and ordered the collected money be returned. But, it added, through the Finance Act 2014, GIDC rates were increased again for industrial units, fertilizer, fuel stock, CNG and captive power producers.

Published in The Express Tribune, October 21^st, 2014.