RAWALPINDI: The Lahore High Court (LHC) has granted interim relief to major oil and gas companies by staying the recovery of electricity duty, a move that could significantly affect the provincial government’s tax collection strategy.
A division bench comprising Justice Jawad Hassan and Justice Tariq Mahmood Bajwa issued the order while hearing constitutional petitions filed by Pakistan Oilfields Limited (POL) and Attock Refinery Limited (ARL).
The petitions challenged the constitutional validity of amendments introduced through the Punjab Finance (Amendment) Act, 2025. Representing the petitioners, Asad Ladha, Advocate, argued that the amendments to the Punjab Finance Act 1964 specifically targeted electricity generated by industrial units through captive power plants for self-consumption.
According to the petitioners, the provincial legislature attempted to impose electricity duty on power produced internally by industrial facilities, a move they claim contradicts an earlier ruling of the Supreme Court of Pakistan.
The companies’ counsel argued that the amendments were designed to “circumvent and neutralise” the apex court’s judgment in the Kunjah Textile Mills case, in which the court had ruled that electricity duty cannot be levied on electricity generated and consumed by a company for its own use.
The counsel further contended that the legislative action was “manifestly arbitrary” and sought to override a binding judicial interpretation, which would be unconstitutional under Articles 189 and 190 of Pakistan’s Constitution that make Supreme Court decisions binding on all courts and authorities.
After reviewing the arguments, the LHC bench observed that the petitioners had established a strong prima facie case, particularly in light of the relief previously granted by the Supreme Court.
Consequently, the court issued an interim order staying the recovery of electricity duty from the petitioning companies until further proceedings, providing temporary relief to the oil and gas sector while the constitutional challenge to the amended law is adjudicated.
Story by Malik Asad
