LAHORE, June 7: Declaring that the imposition of the maximum penalty amount on as many as 10 sugar mills in the province was unlawful, Justice Umar Ata Bandial of the Lahore High Court has directed the Punjab cane commissioner to reassess the amount and also work out a schedule for its payment. The Haseeb Waqas, the Yousuf and the Abdullah sugar mills of the Haseeb Waqas group, headed by Mian Meraj Din family of the former Ittefaq group, the JDW Sugar Mills of federal minister Jahangir Khan Tareen, the Tandlianwala Sugar Mills of federal minister Humayun Akhtar Khan and his brother Haroon Akhtar Khan, the Chishtia Sugar Mills of Shakeel Ahmad Bhatti, the Sheikhoo Sugar Mills of Sheikh Anis Ahmad and the Ashraf Sugar Mills of PPP leader Zaka Ashraf had challenged the imposition of the penalty through a writ petition on the plea that it was unconstitutional and illegal after they had paid arrears of the sugarcane cess under an agreement with the government.

The court observed that the imposition of the penalty for default in the payment of the sugarcane cess was not illegal, but the maximum fine was legally void. The court directed the Punjab cane commissioner (secretary food) to reduce the penalty after reassessment in accordance with the Punjab Finance Act-1964.

Their counsel advocate Ijaz Ahmad Awan submitted that the sugar mills had paid the cess arrears under an agreement with the food department on March 5, 2002, in 12 equal instalments. The accumulative arrears in the case of the Asharaf Sugar Mills alone were more than Rs6.67 million for the years 1997-1999. But after that the cane commissioner levied a penalty of 14 per cent and issued notices to the mills. The penalty amount against the same mills stood at Rs3.4 million.

The counsel submitted that the penalty was an execution of mistaken authority by the cane commissioner who was not empowered to levy the maximum penalty which contravened section 14 of the Punjab Finance Act of 1964, which provided that the levy of penalty should be on the outstanding amount. The cane commissioner, he stated, had calculated the penalty on total liability which was unlawful.