IHC decides in favour of cess on natural gas

Suspends previous order of declaring Gas Infrastructure Development Cess illegal

ISLAMABAD: The Islamabad High Court (IHC) on Tuesday decided in favour of an act of parliament to impose a fee on natural gas for funding various gas projects in the country.

A division bench of IHC, while hearing an appeal, suspended a previous order of a single bench of the same court which had declared illegal the Gas Infrastructure Development Cess (GIDC) Act 2011.

Justice Shaukat Aziz Siddiqui on January 31 had declared GIDC unconstitutional in response to 270 petitions filed by industrialists and owners of CNG filling stations in 2012.

Ministry of petroleum and natural resources and Sui Northern Gas Pipeline Limited (SNGPL) had filed an Intra Court Appeal last week against the January 31 order which was heard by the division bench on Tuesday.

Argument

The attorneys for the appellants advocate Mansoor Ali Khan and Salman Akram Raja argued that GIDC was imposed through an act of Parliament which does not violate fundamental rights of anyone.

They argued that a cess is not a tax in fact it is a fee collected from the consumers.

Advocate Khan argued that Parliament is a legislative body and its act of making a law cannot be declared unconstitutional.

He said GIDC cess was imposed through an act of Parliament and not the executive authority.

He requested the bench to suspend the order of the single bench and also direct the respondents to pay complete amount of tax.

After hearing the arguments the court, in its short order, accepted the appeal and suspended the single bench order passed on January 31.

GIDC Act 2011 was passed by the National Assembly last year for funding Iran-Pakistan gas pipeline, Turkmenistan-Afghanistan-Pakistan-India pipeline, and LNG import and LPG supply enhancement projects.