PESHAWAR: The Peshawar High Court has temporarily stopped the Khyber Pakhtunkhwa government from levying cess on the transportation of tobacco from other provinces by dealers.

A bench consisting of Chief Justice Ishtiaq Ibrahim and Justice Wiqar Ahmad issued the order over a petition jointly filed by three tobacco dealers against the levy of tobacco cess on the item brought in from other provinces.

It sought the provincial government’s comments on the petition through the secretary of the excise and taxation department and the Pakistan Tobacco Board within 10 days, and fixed the next hearing for Nov 12.

The bench observed that notice was issued to the respondents including the excise and taxation secretary and PTB chairman, but despite service none appeared on their behalf, therefore, the court was constrained to grant interim relief to the petitioners and that the tobacco cess should not be levied on transportation of tobacco from other provinces to this province till the next date of hearing.

The petitioners include Qudratullah, Shafiullah and Shahid Farooq belonging to Kohat, Khyber and Peshawar districts, respectively.

Advocate Shaheer Hamza appeared for the petitioners and requested the bench to declare as illegal the demanding of the tobacco development cess from the petitioners upon the imported tobacco from other provinces.

The lawyer said that the petitioners were dealers of tobacco who transported tobacco to the snuff industry across the province. He said that for the very same purpose, the petitioners purchased tobacco from Punjab and sold the same locally in KP.

While giving historical background of the levy of the tobacco development cess by the provincial government, the lawyer said that Section 11 of the KP Finance Act of 1997 clearly used the words ‘exit points’ in the said section, which meant that the said cess could only be levied upon the tobacco grown here and transported outside the province.

He pointed out upon purchase of tobacco from growers of the Punjab province, the petitioners firstly paid the required cess to Pakistan Tobacco Board (PTB) at a certain rate fixed by the board. The counsel said that on the exit points from Punjab, his clients had to pay the cess for the second time to the Punjab excise department.

He added that the petitioners had to pay the cess for the third time to the KP excise department, which was an illegal act and a violation of a high court judgement.

Mr Shaheer contended that cess collected by the PTB and Punjab excise department was not disputed by the petitioners and had been paying the same to the concerned contractors, but they disputed the levy of the cess on tobacco imported from other provinces by the KP excise department.

He argued that the high court, in a judgement on Dec 11, 2003, held that the tobacco development cess was levied only on tobacco grown in this province. The counsel added that the said judgement was also upheld by the Supreme Court.

He contended that that action of the provincial government was blatantly illegal, so the interference of this high court in the matter was required.

Published in Dawn, October 13th, 2024