Pakistan : Sugar mills generating over 500KW for self use not liable to pay electricity duty: SC
The Supreme Court of Pakistan ruled that sugar mills and others using private generators over 500KW for self-use are not liable to pay electricity duty on that usage. This decision came after the Punjab government imposed the levy through the Punjab Finance Ordinance, 2001, which was later challenged in the Lahore High Court.
ISLAMABAD – The Supreme Court of Pakistan has ruled that the sugar mills and others, which used private generators of more than 500KW capacity to generate electricity for self use, are not liable to pay the electricity duty on their own self use of the power/energy.
A three-member bench of the apex court headed by Justice Munib Akhtar Tuesday announced the judgment reserved on 29-02-24.
The Punjab government on 25-08-2001 had issued the Punjab Finance Ordinance, 2001 to make changes in Section 13 of the Act that resulted in the application of the levy known as the electricity duty on the respondents.
This levy was challenged in the Lahore High Court by writ petitions on various grounds. The constitutionality of Section 13 was also brought into play. The provincial government took its stand on constitutionality in terms of Article 157(2)(b) of the Constitution.
The single bench of the LHC dismissed the petitions. Consequently, the intra-court appeals were filed before a Division Bench of the High Court, which reversed the judgment. Being aggrieved by this decision, the Punjab provincial government approached the apex court.
The respondents on the other hand claim that when s. 13 is read as a whole (including, in particular, the Fifth Schedule), and the well settled principles of interpreting fiscal statutes applied to it, the respondents were not liable to the payment of the duty notwithstanding the change in the definition of “licensee”.
The Additional Advocate General (AAG) submitted that the taxable event in s. 13 was encapsulated in the following words in subsection (1): “on the units of energy consumed”. The electricity duty was a general levy that was imposed on every person who did not come within the scope of any its exclusions or exemptions, as contained in the provisos to subsections (1) or (2), or the Sixth Schedule. The latter schedule admittedly did not apply to the respondents and the benefit of any exemption in terms of the 1985 notification stood withdrawn because of the 2001 notification. The definition of “licensee” had been altered in such manner that it specifically brought the respondents within its scope. Therefore, they were liable to pay the duty. The AAG submitted that subsection (3) of s. 13 related only to the third stage of taxation, i.e., recovery. The first two stages (i.e., leviability and assessment) stood determined in the case of the respondents in terms of subsection (1) (first stage) and the Fifth Schedule (second stage).
Source Link : https://www.nation.com.pk/09-Oct-2024/sugar-mills-generating-over-500kw-for-self-use-not-liable-to-pay-electricity-duty-sc
