CHERAT CEMENT CO. LTD., NOWSHERA vs FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources

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CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources O.XXVI, R. 8---Civil Procedure Code (V of 1908), O. XLVII, R.1---Constitution of Pakistan, Art. 188---Review petition, hearing of---Constitution of Bench---Scope---Application/petition for review shall, as far as practicable, be posted before the "same Bench" that delivered the judgment or order sought to be reviewed---Judge who dissented from the majority judgment should be Member of the Bench that was to hear the review petition, as a judgment pronounced in terms of the majority opinion of a larger Bench could not be reviewed by a smaller Bench consisting of only the Judges holding the majority opinion---Jurisdiction and judicial power of the Judge who earlier dissented from the majority judgment of the Bench was similar and co-extensive with that of those Judges whose opinion became the majority judgment of the Bench, in hearing the review petition against that majority judgment. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Ss. 3 & 4---Constitution of Pakistan, Fourth Sched., Pt. I, Entry No. 27 & Pt.II, Entry Nos. 2 & 15---Industrial and commercial consumers of natural gas---Gas Infrastructure Development Cess ('GIDC cess')---Whether Entry No.27 of Part I of the Federal Legislative List justified the legislative power of the Federation to enact the Gas Infrastructure Development Cess Act, 2015 ('the GIDC Act')---Held, that Entry No. 27 of Part I of the Federal Legislative Listread that "Import and export across customs frontiers as defined by the Federal Government, inter-provincial trade and commerce, trade and commerce with foreign countries; standard of quality of goods to be exported out of Pakistan."---Said entry clearly related to trade with foreign countries (import and export), and inter-provincial trade and commerce, and in no way covered the subject of "natural gas"---Gas Infrastructure Development Cess Act had not taxed or charged fee on the foreign or inter-provincial trade and commerce; it had charged fee on use of natural gas---Entry No.27, in no terms, justified the legislative power of the Federation to enact the GIDC Act---Gas Infrastructure Development Cess Act fells under Entry No. 2 read with Entry No.15 of Part II of the Federal Legislative List---Parties were not heard on said point at the time of original hearing of the case; which point, therefore, escaped notice of the Bench that heard the judgment under review---Such error appeared to be apparent on the face of the record and was liable to be recalled---Review petitions were allowed. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Ss. 3 & 4---Constitution of Pakistan, Fourth Sched., Pt. I, Entry No. 51---Industrial and commercial consumers of natural gas---Gas Infrastructure Development Cess ('GIDC cess')---Tax imposed on natural gas through a Money Bill---Constitutionality---In the judgment under review while interpreting Entry No.51 of Part I of the Federal Legislative List contained in the Fourth Schedule to the Constitution, the majority took a view contrary to that of a Bench of co-equal strength expressed in Federation of Pakistan through Secretary Petroleum and Natural Resources v. Durrani Ceramic (2014 SCMR 1630 : PLD 2015 SC 354: 2014 PTD 2016) ('the Durrani Ceramic case') by stating that "the National Assembly was fully competent to impose tax on natural gas through a Money Bill on the strength of Entry No. 51 of the Federal Legislative List."---Said finding was against settled principles of the law of precedent and needed to be recalled---Review petitions were allowed. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources O. X, R. 1---Judgment/order delivered by a Bench of the Supreme Court---Majority view/opinion---Scope---Judgment pronounced or Order made in terms of the majority opinion was the judgment or order of the Bench, and not of the Judges holding the majority opinion. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Scope---Visible co-relation must exist between the collection of Cess and its expenditure---In a case where the fee was to be utilized for service that was to be rendered in future, it was important to see how the moneys collected were being expended and whether there was a transparent and confidence inspiring co-relation between the two---Furthermore amount of Cess so collected was for a specified purpose and must be accounted for accordingly---Cess was not the collection of general revenue which could be utilized anywhere. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Ss. 3 & 4---Industrial and commercial consumers of natural gas---Gas Infrastructure Development Cess ('GIDC cess')---Whether there was any co-relation between the collection of the GIDC cess and expenditure therefrom---Held, that the data provided by the Government showed that it already had Rs.101.357 billion of GIDC cess in excess after factoring in the expenditure to be incurred on certain gas pipelines and gas storage projects ('the Projects') unless another gas pipeline project was put into motion---Co-relation between the collection and expenditure of GIDC cess stood completely frozen since the year 2011 raising fingers on the credibility and transparency of the Projects and on the availability of service (supply of natural gas) against the fee charged, in the near future---Further collection of arrears (in terms of the majority view of the judgment under review) in the sum of Rs. 456.946 billion, leading to an excess of Rs. 355.589 billion unduly promoted unjust enrichment and seriously offended the right to property and business of the petitioners guaranteed under the Constitution---After a decade of charging GIDC cess from gas consumers and after having collected Rs 295.40 billion to-date there was no sign of development of the gas pipeline projects in the country---Absence of the said projects and emphasis on the import of LNG suggested that the Government was either not willing to or was unable to complete the Projects and therefore the shortfall in gas supply was being increasingly plugged through imported LNG---Direction to recover arrears given by the majority in the judgment under review, was, therefore, not justified and legally sustainable and was liable to be recalled---Review petitions were allowed. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Ss. 3 & 4---Civil Procedure Code (V of 1908), S. 11---Industrial and commercial consumers of natural gas---Gas Infrastructure Development Cess ('GIDC cess')---Res judicata, principle of---Scope and applicability---Four-Member Bench of the Supreme Court in the case of Pir Bukhsh and others v. Chairman, Allotment Committee (PLD 1987 SC 145) ('the Pir Bukhsh case') elaborately discussed the principle of res judicata and concluded that in a controversy raising a dispute inter parties, the matter adjudged was conclusive as between the parties both on question of fact and question of law---However, an exception to said principle was created in the judgment under review, heard by a three-member Bench, by holding that it would be difficult to apply such a principle in matters where a power or a right or an obligation solely depended upon the very legitimacy of the enactment that had come under challenge in a Court of law on the touchstone of the Constitution---It was, not appropriate for the Three-Member Bench hearing the judgment under review to deviate from principle of res judicata laid down by an earlier Four-Member Bench---Three-Member Bench had two options: first, to follow the law declared earlier by the Four-Member Bench; or second, to refer the matter to a Four-Member Bench to decide whether that opinion should be reconsidered by a larger Bench---As the majority in the judgment under review did not opt for the second option, the principle of res judicata as settled in the 'Pir Bukhsh case' was fully applicable to the decree holders/petitioners in the suit decided by the (Sindh) High Court---Review petitions were allowed. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Ss. 3 & 4 & Second Sched.---Constitution of Pakistan, Art. 25---Industrial and commercial consumers of natural gas---Gas Infrastructure Development Cess ('GIDC cess')---Different rates of GIDC cess for different industrial and commercial consumers---Discrimination---Judgment under review did not consider the rationale behind fixing different rates for GIDC cess within different sectors but instead discussed the question of discrimination between the industrial/commercial consumers and the domestic consumers, which was not the question agitated by the petitioners---No intelligible differentia seemed to exist amongst the different industrial and commercial gas consumers mentioned in the Schedule for the purposes of the Gas Infrastructure Development Cess Act, 2015 ('the GIDC Act')---Discrimination in providing maximum limit of GIDC cess for different sectors was overlooked in the judgment under review, and thus provided a valid ground to review it---In terms of Art. 25 of the Constitution which ensured equality and equal treatment among equals, the Federal Government could not charge the GIDC cess at the rate more than Rs.100 per MMBTU from any category of gas consumers---Review petitions were allowed. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Ss. 3 & 4---Constitution of Pakistan, Arts 78(1) & 78(2)---Industrial and commercial consumers of natural gas---Gas Infrastructure Development Cess ('GIDC cess')---Whether GIDC cess was to be deposited in the 'Federal Consolidated Fund' or the 'Public Account' of the Federation---GIDC cess amount collected under the Gas Infrastructure Development Cess Act, 2015 (GIDC Act) was to be credited in the Public Account with an entity distinct from the other revenues credited to it, and must be earmarked for utilization for the purposes specified in the GIDC Act only---No disbursement could be made from the GIDC cess amount for general governmental expenditures or any other purpose---Observations (of the majority in the judgment under review) regarding deposit of the GIDC cess amount in the Federal Consolidated Fund without appreciating the difference between the Federal Consolidated Fund and the Public Account under Article 78 of the Constitution, were, therefore, liable to be recalled. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources Ss. 3 & 4---Industrial and commercial consumers of natural gas---Gas Infrastructure Development Cess ('GIDC cess')---Gas Infrastructure Development Cess Act, 2015 ('GIDC Act, 2015'), vires of---[Per Mushir Alam, J: Supreme Court in the judgment under review had declared the GIDC Act, 2015 as intra vires the Constitution---When, the GIDC Act, 2015 had been declared to be intra vires by the Supreme Court then every provision of it, which either created an obligation or granted any relief was enforceable in law---None of the grounds urged by the petitioners called for reviewing the judgment under review---Review petitions were dismissed and the Gas Infrastructure Development Cess Act, 2015 (by a majority of 2:1, with Syed Mansoor Ali Shah, J dissenting) was held to be intra vires the Constitution. Citation Name: 2021 PLD 327 SUPREME-COURTBookmark this Case CHERAT CEMENT CO. LTD., NOWSHERA VS FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources O. X, R. 1 & O.XI---Judgment of larger Bench of the Supreme Court---Scope---Such judgment was binding on the Benches of the Supreme Court consisting of Judges less than the larger Bench---Smaller Bench could not request for constitution of a larger Bench to revisit the opinion of a larger Bench on any question or principle of law; only a Bench of co-equal strength could make such request.

CHERAT CEMENT CO. LTD., NOWSHERA vs FEDERATION OF PAKISTAN through Ministry of Petroleum and Natural Resources O — 2021 PLD 327 SUPREME-COURT

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