PESHAWAR, Feb 26: The Peshawar High Court on Tuesday declared the imposition of sugar and Coca Cola cess by the Nazim of Peshawar Town-2, illegal and in excess of his jurisdiction.

A two-member bench comprising Justice Nasirul Mulk and Justice Talat Qayyum Qureshi accepted two identical petitions filed by M/s Khazana Sugar Mills and M/s Makk Beverages and M/s Mineral Water, and declared a notification issued by the Nazim on April 10, 2002, against the NWFP Local Government Ordinance 2001.

The bench also directed the respondents to refund the amount recovered from the petitioners during pendency of the writ petitions.

Appearing for the petitioners, advocate Abdul Rauf Rohaila informed the court that through a notification the Nazim, Mumtaz Khan, had imposed sugar cess at the rate of Rs5 per bag and Coca Cola cess at the rate of Rs10 per crate in the limit of the town council.

The lawyer argued that the imposition of cess in the limits of municipal administrative area of Town 2 was without lawful authority and of no legal effect, and that the Nazim had overstepped his powers.

The lawyer argued that the Nazim could only exercise the powers when the referred levy, taxes, cess, etc., were approved by the tehsil or town council. Since no such approval had been obtained the notification issued by the Nazim was illegal, he said.

Moreover, the lawyer maintained, no tax could be imposed by the Nazim or the council on a company or a corporation. He contended that it was only the federal government which could impose taxes on a corporation.

The respondents, including the Nazim, defended the levy and contended that by virtue of powers granted to them by the ordinance they were empowered to impose such cess. They contended that these taxes had been imposed with the consent of the provincial government and added that they had been empowered by the legislature to impose the disputed cess on the product, including sugar and coca cola.