Sell Sugar at Rs 40 Per kg: Supreme Court

ISLAMABAD : The Supreme Court of Pakistan on Friday dashed all hopes of sugar millers for a reprieve. Not only has the apex court adopted the Lahore High Court (LHC) decision of fixing sugar prices at Rs 40 per kg, it extended the scope of the judgement to the entire country. It also established a one-man commission to be headed by the reinstated Chairman Competition Commission of Pakistan (CCP) despite reservations of the government.

– “Price fixation is not the duty of the court, if government had performed its due function, we [the Supreme Court] would not have passed this order”.

Chief Justice Iftikhar Muhammad Chaudhry said in the order, “for the time being we direct that sugar be sold at Rs 40 per kg in retail in all provinces and in order to achieve this objective the federal government is required to issue a notification under Section 6 of Price Control and Hoarding Act 1977. We are of the considered opinion that by issuing such notification rates would be maintained in all provinces temporarily till CCP submits a detailed report on the subject”.

“We expect the issuance of notification by the government as early as possible and utilisation of all recourses for the implementation of the order passed by the court”, the order further says. A three-member bench of the apex court comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Ghulam Rabbani and Justice Jawwad S. Khawaja observed in its order: “Price fixation is not the duty of the court, if government had performed its due function, we would not have passed this order”.

The court authorised the Competition Commission of Pakistan headed by Khalid Mirza to call on any person for his/her input, including the Federal Board of Revenue (FBR) for calculating tax due (GST, tax paid per kg) for the determination of price after hearing all the stakeholders such as millers, federal and provincial governments, representatives of consumers (Advocate Shafqat Chohan, Advocate Farooq Bajwa) and others.

The court asked the commission to work out the cost of production of sugar and to determine the profits earned through this commodity. “If the commission faces any difficulty in exercising its function, it can approach the SC for passing an appropriate order under the circumstance,” said the Chief Justice to forestall any effort to block commission’s working. The court asked the one-man commission to submit its report within two weeks before the next date of hearing.

The court directed the federal and the provincial governments to regularise distribution of sugar by appointing duly recognised dealers. The order explained further that “there are federal and provincial laws on the subject, reference was made to Section 3 of the Sugar Products Control Ordinance 1948 which specifies that only those recognised or specially authorised can acquire sugar”.

The court passed this direction being cognisant of the fact that there is a lack of mechanism for the purpose of supply to the consumer and presence of middlemen who act as profiteers. In order to ensure sugar supply in all provinces, the court said: “If no laws are available, then recognised dealers can be appointed by the provincial governments in different areas who are registered under Sales Tax Act and have independent income tax numbers”.

Giving reference of Article 190 of the Constitution which reads “all executive and judicial authorities throughout Pakistan shall act in aid of the Supreme Court” the court directed all government functionaries including Chief Secretaries, Home Secretaries, IGs and other law enforcing agencies to implement the order.

The court also noted that sugar crisis had cropped up on account of non-adherence to relevant laws on the subject and concession extended by the financial institutions to mill owners by extending the period of payment of outstanding amounts. Earlier, Iskander Khan, president Pakistan Sugar Mills Association (PSMA) told the court that he would convene a general body meeting of the association and take every step for the implementation of the court orders in letter and spirit.

The court referred the matter of PSMA to Securities and Exchange Commission of Pakistan (PSMA) when Javed Kiani (acting Chairman of PSMA who was found to have signed a fake document) informed the court that the association was lacking the minutes of the meeting which passed a resolution to challenge the LHC decision. Advocate Shafqat Mehmood Chohan voted for the establishment of an independent commission and suggested registration of sugar dealers.

This would not curb the hoarding but also bring the dealers in tax network, he added. Advocate Khawaja Haris, counsel for the Punjab government, pleaded for bringing prices of sugar at par in all the provinces saying Punjab was ready to sell sugar at Rs 40 per kg. He said that if the commodity is sold at higher rates in other provinces, then there would be acute shortage in Punjab because profiteers would take all steps to export sugar to other provinces. Link...