ISLAMABAD, June 4: The Supreme Court has observed that incentives for setting up industries are misused and imported duty-free goods are sold in the open market.

This was stated by Justice Khalilur Rehman Ramday on Friday while hearing a number of petitions filed by some industrialists of Gadoon Amazai against the withdrawal of incentives/ exemption in the power tariff and Customs duties.

A three-member SC bench, comprising Justice Iftikhar Mohammad Chaudhry, Justice Rana Bhagwandas and Justice Khalilur Rehman Ramday, heard the petitions. Wasim Sajjad, representing petitioners, argued before the bench that in 1987 Gadoon Amazai was declared a tax-free zone for industrialists after which many incentives were introduced by the government to promote industrial development in the country.

The Economic Coordination Committee of the cabinet (ECC) on Aug 24, 1994, also announced 50 per cent discount in power tariff, 25 per cent exemption in Customs duty on import of foreign goods and exemptions in the income tax for a period of five years.

The Water and Power Development Authority (Wapda) withdrew 50 per cent exemption in power tariff on Aug 24, 1997. At this Justice Ramday observed that the incentives given by the government for the industrialists were always misused which could be testified from the fact that duty-free goods imported for the industrials were being sold across the country.

However, Mr Sajjad clarified that Wapda was under the administrative control of the government and ECC orders could not be simply ignored by the power utility. He said amendments have been introduced in Section 3 of Wapda Act under which the authority was made to abide by all the administrative orders of the government.

"Wapda do suggest change in power tariff but a final decision is given with the approval of the government as such Wapda has no jurisdiction to override the decision of 5-year incentive package for the industrialists," he contended.

He said Wapda's unilateral decision to withdraw exemptions from the industries was in flagrant violation of the laws, as a subsidiary department of the ministry could not override cabinet's decisions. The case was later adjourned for a date to be fixed later.