PESHAWAR, June 13: After the Islamabad High Court, the Peshawar High Court, too, has declared the levy of Gas Infrastructure Development Cess (GIDC) by the federal government for the execution of gas projects, including Iran-Pakistan gas pipeline scheme, as unconstitutional.

A bench comprising Chief Justice Dost Mohammad Khan and Justice Qaiser Rashid on Thursday issued a short order to accept around 65 petitions filed by owners of several industrial units and CNG stations against GIDC.

The detailed verdict will be issued later on.

Since last year, the court had granted interim relief to petitioners by stopping the federal government from the recovery of GIDC through the 2011 enactment of an act of parliament.

The Islamabad High Court has already declared the imposition of the said cess illegal and unconstitutional against which the government has filed appeals with the Supreme Court.

The respondents in the petitions were the federation of Pakistan through the petroleum and natural resources secretary, Sui Northern gas Pipelines Limited (SNGPL) through its chief executive and general manager, and Oil and Gas Regulatory Authority (Ogra) through its chairman.

The GIDC Act 2011 was passed by the National Assembly in 2011 with the objective of executing Iran-Pakistan (IP) Gas Pipelines Project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipelines Project, LNG Import Project and LPG Supply Enhancement Project.

Lawyers for the petitioners, including Shumail Ahmad Butt and Ishtiaq Ahmad, said the Islamabad High Court had already declared the GIDC Act 2011 unconstitutional and therefore, the law was no longer on the statutory books.

Arbab Tariq and other lawyers for the federal government said their client had filed appeals against the IHC judgment.

They, however, failed to respond when the bench asked about the status of the appeals and whether the Supreme Court has suspended the IHC order.

The bench also asked when the agreement about IP Gas Pipelines Project was signed a few weeks ago, then how the government had been receiving cess on gas for around three years.

Again, no satisfactory reply was given by the government’s lawyers. Mr Shumail Butt said the controversial cess on natural gas by SNGPL was introduced through ‘Money Bill’ passed by the National Assembly and approved by the president in 2011.

He said the levy of infrastructure cess was beyond the legislative competency of the federation and parliament and that the passage of GIDC Act 2011 as ‘Money Bill’ was opposed by the Senate.

The lawyer said the federal government first moved a summary to the Council of Common Interest but later withdrew it due to strong opposition of the provinces.

He said the government enhanced the burden on the petitioners by increasing the said cess for industrial consumers through the Finance Act, 2012.

Mr Shumail Butt said the cess was increased from Rs13 per MMBTU (million metric British thermal unit) to Rs100 per MMBTU worsening the situation as that not only increased the overall industrial tariff by more than 20 per cent but the cess itself saw an unbearable increase by 770 per cent.

Lawyer Ishtiaq Ahmad said prior to the enactment of the GIDC Act, cess at the rate of Rs141 per MMBTU was imposed on CNG stations but under the controversial law, it had been enhanced up to Rs263 per MMBTU.