SC turns down companies plea against gas infrastructure levy

ISLAMABAD: In a much-anticipated verdict in the Gas Infrastructure Development Cess (GIDC) case, the Supreme Court on Thursday rejected the appeals of all the companies and directed them to pay Rs417 billion to the government. A three-member special bench of the court, headed by Justice Mushir Alam and comprising Justice Faisal Arab and Justice Mansoor Ali Shah, announced the 78-page verdict on 107 petitions filed by various textile mills, cotton mills, sugar mills, ceramics companies, chemicals, CNG filling stations, match factories, cement companies and aluminium industries regarding the GIDC levy.

The court had reserved its verdict on February 20. The bench passed the judgment in favour of the federal government with a 2-1 majority. Justice Arab wrote the 47-page judgment while Justice Mansoor Ali Shah wrote a 31-page dissenting note.

The judgment, authored by Justice Arab, stated: “As a consequence, the amount of GIDC collected over the years should be returned and refunded to the payers in full, unless in some cases, it is impractical to so do.

The court also ordered the government to constitute a committee to “work out a mechanism for refund of GIDC”. It also ruled that the amount of GIDC that cannot be refunded after exploring all other avenues, “shall remain earmarked and be utilised only for the infrastructure development of the gas sector”.

The judgment noted that energy was vital to industry, transport, infrastructure, information technology, agriculture, household users and more. Any nation with a growing economy and improving living standards must secure a robust energy supply, it added.

The court gave the government six months to initiate appropriate legislation in the light of the judgment. “In case the federal government fails to do so achieve this during this period, the federal government shall refund the amount of GIDC, in the manner mentioned above,” it added.

Following the verdict, Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Sheikh welcomed the decision which enables the government to recover the levy which was stuck for the “last many years”, he said in a tweet. He also appreciated the “good work” of the government team, especially office of the Attorney General, and the finance and petroleum ministries.