ISLAMABAD: The Supreme Court (SC) reserved on Friday its verdict on an appeal against the alleged discriminatory grant of Rs20 billion in subsidies on fertiliser under the much-trumpeted Prime Minister’s Kisan Package.
A two-judge Supreme Court bench, comprising Justice Ejaz Afzal Khan and Justice Qazi Faez Isa, closed the proceedings on the federal government’s challenge to the Dec 8, 2015, Peshawar High Court (PHC) ruling with an observation that the government should keep a uniform standard in the grant of subsidies being given on taxpayers’ money without discriminating against any company or individual.
The high court verdict had held the grant of subsidy only to fertiliser producers that use imported rock to be discriminatory.
Fertiliser company alleges discrimination in subsidy grant
The subsidy package was part of the Rs341bn Kisan Package announced by Prime Minister Nawaz Sharif around the time of the local government elections. One of its components was the Rs20bn subsidy for manufacturers of Single Super Phosphate (SSP) with the condition that the end product would be made using imported rock and not its local counterpart.
Of the Rs20bn, the federal government was to pay Rs10bn, Punjab Rs7bn while the government of Balochistan Rs400m. The remaining amount was to be borne by the governments of Sindh and Khyber Pakhtunkhwa (KP).
SSP manufactured from imported rock was subsidised because the presence of phosphate in local rock was below 18 per cent as declared by the 1995 chemical evaluation, infrared spectral, thermal and up-gradation studies of Bataknala, Hazara.
Feeling aggrieved, Agritech Limited which manufactures fertiliser from local rock challenged the government package before the PHC, claiming it was being discriminated against. The court ruled that if a product meets the standards of the Pakistan Standards and Quality Control Authority and Standards Development Centre (Chemical Division), there was no legal justification to deny the manufacturer the subsidy.
On Friday, Advocate Salman Akram Raja representing Agritech Limited argued that the high court order had attained finality as the federal government appeal before the Supreme Court was time-barred, adding that his client should also be included in the subsidy since it was also producing phosphate fertiliser.
During the proceedings, the Supreme Court also questioned why the federal government had appealed against the high court judgment when the latter did not issue any adverse order against it. The high court had only held that if the product met the required standards, there was no legal justification to deny the manufacturer the subsidy, the court observed.
Pointing towards the Attorney General, the judges asked if they should issue directions for a fresh laboratory test of the product being produced by Agritech Limited.
The AG had no objection over the proposal but said that the test should not be done on the end product, rather the material at the manufacturing stage since the company used chemicals to show a misleading result of 18pc phosphate content in the final product.
However, Mr Raja opposed the idea saying the final product should be tested at the concerned laboratories, adding that only his client was being discriminated against when a number of fertiliser companies were being given the subsidy.
Published in Dawn, May 28th, 2016
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