IHC seeks reply from govt on deduction of GIDC

The Islamabad High Court (IHC) has issued a pre-admission notice and sought reply from federal authority while hearing a petition filed by hundreds of the CNG stations against deduction of the Gas Infrastructure Development Cess (GIDC) in their monthly bills.

The petitioners, 534 CNG stations, contended that the levy charged in their bills as the GIDC is illegal.

They nominated the Petroleum Division, the Oil and Gas Regulatory Authority (Ogra), the Sui Northern Gas Pipeline Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL) as respondents.

They requested the court to stop the respondents from deducting arrears on account of the GIDC and also to direct them not to disconnect gas supply to those CNG stations which have not paid the arrears.

Appearing before an IHC bench comprising Justice Aamer Farooq, the counsel for the CNG stations Babar Ilyas on Monday told the court that the Lahore High Court (LHC) and the a court in Sindh have already issued stay orders on petitions filed by the CNG stations against deduction of the GIDC.

Babar Ilyas Advocate told the judge that Monday (September 21) was the last date to pay the bills and requested the court stay all action by authorities against the CNG stations. The bench, however, refused to issue a stay order. He asked the petitioners why they moved the court on the last day of bill payment.

“Pay the bills at present. The court can only issue orders after hearing the respondents. Their money will be returned if the court decides to allow your petition,” the judge observed. He later adjourned the case till September 28.

The PPP led federal government levied the GIDC in 2011 by enacting the GIDC Act 2011.

Its objective was to gather funds for different energy projects, including the Iran Pakistan (IP) Gas Pipelines Project, the Turkmenistan-Afghanistan-Pakistan-India (Tapi) Pipelines Project, the LNG Import Project and the LPG Supply Enhancement Project.

The GIDC was declared unconstitutional by the Peshawar High Court (PHC) on June 13, 2013, and the judgment was also upheld by the Supreme Court on Aug 22, 2014.

Later, the PML-N government brought a new legislation on the issue in 2015. It was also challenged in the PHC and the Sindh High Court (SHC). In 2016, the SHC while exercising civil suit jurisdiction declared the GIDC ultra vires of the Constitution but in May 2017.

Meanwhile, the aggrieved companies approached the Supreme Court which on August 13, 2020 dismissed all petitions filed against the GIDC levy and ruled in favour of the federal government, which would collect more than Rs700 billion from various companies.