Tuesday May 24, 2022

Sugar pricing technical matter, can’t interfere: LHC

By Amir Riaz
October 03, 2021
Sugar pricing technical matter, can’t interfere: LHC

LAHORE: The Lahore High Court (LHC) has observed that sugar pricing is a technical matter and the court does not want to interfere in this matter.

Justice Shahid Jameel Khan made these observations while issuing a 14-page judgment on scores of petitions moved by the sugar mills and others seeking directions to the government for controlling the commodity prices.

Justice Khan noticed that the matter of price of sugar agitated by the mills had already been referred to the appellate committee available under the law. However, he made it clear that any amount that was found to be charged by sugar mills from the consumers in excess of the price fixed by the government would be determined by the appellate forum and its benefits would be passed on to the consumers.

The judge observed that it was extremely unfortunate that the common man in the country earning minimum wage had to pay taxes on a par with a rich man.

“Unfortunately, the common man, earning minimum wage, is being subjected to indirect taxes equal to a rich man in the country,” the judge observed in a written order. The judge noted that price control and competition laws were not enforced effectively in Pakistan.

“Inevitable result of which is unpredictable price hike of essential commodities and failure of the government to bring the essential commodities within minimum purchasing power of the lower income class, which is duty of the state, against fundamental rights, in particular, under Articles 9, 14 read with Article 38 of the Constitution, the order added.

The judge observed that price control and competition laws were meant to protect the consumers’ right; however, these were required to be implemented by forging a balance, because a thriving stable economy is the backbone of a country, for which certainty in policy making and enforcement of law is a sine qua non (absolutely necessary).

“It is important to note that excessive price control may lead to disruptions in market like decrease in quality and losses for producers, which may result into flight of investment.

In open markets, prices are controlled by ensuring free competition. The government keeps check on potential anti-competitive behaviors, like cartelization, hoarding etc. Conversely, imposition of restrictions, to control prices of essential commodities is necessary to ensure a respectable living for lower income class. After fixing minimum living wage, the government is under an obligation to bring essential commodities within the fixed purchasing power,” the judge added.

“In developed countries like the United Kingdom, ‘subsistence allowance’ is given to jobless eligible persons to ensure that they are able to purchase the commodities essential for life.”

The petitioners' counsel also drew the court’s attention towards an important issue, saying on the one hand the government had failed to control the price of sugar, as a necessary commodity, on the other farmers had been barred from making Gur (jaggery) for their consumption and are forced to supply sugarcane to factories under the garb of Gur Control Order, 1948. To the court’s query, an assistant advocate general submitted in writing that the Punjab province had not adopted or implemented the 1948 Order to date.

The petitioners took the stand that the farmers were being harassed by the provincial administration whenever they try to make Gur or sugar (raw sugar) from the sugarcane. The federation has neither owned nor defended the 1948 order.

The court set aside the Gur Control Order, 1948 and ruled that there was no apparent existing force of law behind it.

It said the order was grossly flawed and therefore violated fundamental rights of the Constitution.

“Even if exists, it appears to be in violation of Article 18 of the Constitution, particularly when no support price is fixed for purchase of sugarcane by the government to protect the growers interest. The Order of 1948 is held ultra vires hence void, being in violation of fundamental rights guaranteed by the Constitution.“

The court ordered that all enforcement agencies, both federal and provincial, were restrained from taking any action against farmers prohibiting manufacture of Gur or Shaker (raw sugar).

The court also directed the provincial government to ensure that all essential commodities were sold at controlled and fixed rates at the retail outlets across the province, which was its constitutional duty.

The court held that the practice of taking hold of any essential commodity and selling it through or under its administration shall be avoided, “to restore dignity of consumers under Article 14 of the Constitution, who are compelled to stand in queues with proof of their identification.