Khadim Hussain Soomro J.:- Through this judgment, I intend to decide the instant petition as well as Writ Petitions mentioned in the Schedule attached as Mark "A" as a common question {challenging vires of the off the Grid Captive Power Plants Levy Ordinance, 2025 (The Ordinance)} is involved in all the petitions. In all the petitions following prayers have been made:- "(a) Declare that the impugned Notification is without jurisdiction and of no legal effect;
(b) Declare that the 2025 Ordinance is unconstitutional;
(c) Prohibit the respondents from taking any adverse or coercive actions for collecting and/or recovering the levy.
(d) Grant such other relief as may be deemed fit and proper;and
(e) Grant costs."
2. Leaned counsels for the petitioners (Mr. Makhdoom Ali Khan, ASC, Mr. Raashid Anwar, and ASC, along with other counsels mentioned above) submitted that the petitioners are limited liability companies running various usinesses, including generating electricity through their power plants using natural gas or LNG. These plants primarily meet their internal energy needs, with any extra power sold to third parties. Under Section 8 of the Oil & Gas Regulatory Authority Ordinance, 2002, the Federal Government is required to notify OGRA of the maximum gas prices for retail consumers within 40 days, which are then published in the official gazette. It was emphasized that any additional levy above this notified price is unlawful.
3. It was further submitted that the petitioners qualify as captive power plants under Section 2(c) of the off the Grid (Captive Power Plant) Levy Ordinance, 2025, which defines such plants as industrial units producing power mainly for self-use, with the option to sell surplus electricity to distribution companies or bulk consumers. Learned counsel has also pointed out that the petitioners already pay sales tax on natural gas under the Sales Tax Act, 1990, meaning the new levy amounts to double taxation, which is unconstitutional.
4. Additionally, the counsels argued that the contested levy is not a valid tax under the Constitution, and explained that the Federation lacks the authority to impose a tax on natural gas consumption unless it is for nuclear power generation. Since the petitioners use gas only for electricity production (for themselves or third parties), the levy is illegal. He also clarified that it cannot be considered a fee, as no specific service is provided in return. To support this, he cited the Federation of Pakistan through the Secretary of the Ministry of Petroleum and Natural Resources and another (PLD 2015 Supreme Court 354), where a similar argument against gas fees was rejected.
5. Lastly, the learned counsel contended that under Article 77 of the Constitution of Pakistan 1973, only Parliament (Majlis-e-Shura) can authorize federal taxes, and no such law exists for this levy.
Engineer Iqbal Zafar Jhagra and another Vs Federation of Pakistan and others [2013 SCMR 1337], Cyanamid Pakistan Ltd. v. Collector of Customs (PLD 2005 SC 495), where it was held that legislative authority to levy taxes cannot be delegated to executive bodies. Reliance was placed on Government of Pakistan v. Muhammad Ashraf (PLD 1993 SC 176) and All Pakistan Textile Mills Association v. Province of Sindh (2004 YLR 192). He also claimed the levy violates the petitioners' fundamental rights (Articles 3, 4, and 9) since it was imposed without proper legal authority.
Learned counsels in support of their submissions, placed reliance on the judgments cited as "Federation of Pakistan and another v. Durrani Ceramics and others (2014 SCMR 1630), Federation of Pakistan and another v. Durrani Ceramics, (PLD 2020 SC 641), Ardeshir Cowasjee and 10 others v. Karachi Building Control Authority and 4 others (1999 SCMR 2883), Shafqat @ Shafqat v. The State (PLD 2019 SC 43), The Province of East Pakistan v. Dr. Aziz-ul-Islam (PLD 1963 SC 296), Multiline Associates v. Ardeshir Cowasjee and 2 others (PLD 1995 SC 423), Land Acquisition Collector and 6 others v. Muhammad Nawaz and 6 others (PLD 2010 SC 745)".
6. Learned Attorney General for Pakistan and Learned counsels for the respondents have submitted that the levy under Section 3 of the Off the Grid (Captive Power Plants) Levy Ordinance, 2025 is constitutionally valid, drawing authority from Entry 51 of Part-I of the Federal Legislative List (FLL) as affirmed by the Supreme Court in Khurshid Soap and Chemical Industries (Pvt) Ltd v. Federation of Pakistan (PLD 2020 SC 641). The Court clarified that Entry 51 must be read disjunctively, allowing taxes on natural gas and mineral oil independent of nuclear energy use, thereby overruled the earlier Durrani Ceramics (2014 SCMR 1630) judgment, which had erroneously interpreted Entry 51 conjunctively.
7. Learned Attorney General contented that where conflicting judgments of equal bench strength exist, the later decision prevails as established in Govindanaik G Kalaghatigi v. West Patent Press Co. Ltd (AIR 1980 Karnataka 92). The Durrani Ceramics judgment was deemed per incuriam due to its fundamental misinterpretation of constitutional provisions. Such per incuriam decisions lack binding force as they arise from "ignorance of statutory terms or serious constitutional misinterpretation, he placed reliance in the case of "Muhammad Rafique Goreja v. Pakistan, (2006 SCMR 1317)".
8. He further contended that the legislature possesses plenary authority to impose taxes unless expressly prohibited by the Constitution, he placed reliance in the case of "D.G. Khan Cement Co.
Ltd v. Federation of Pakistan, 2020 PTD 1186)". This includes the power to impose multiple taxes on the same subject, as the authority to tax twice is as inherent as the power to tax once, reliance was placed in the case of "Pakistan Industrial Development Corp. v. Pakistan, 1992 SCMR 891)". The learned Attorney General lastly contended that the Petitioners' reliance on Durrani Ceramics is fundamentally flawed and a judgment per incuriam and subsequent overruled in the Khurshid soap case. The disjunctive reading of Entry 51 adopted in Khurshid Soap, combined with the legislature's plenary taxing power, conclusively validates the levy's constitutionality. The counsel lastly submits that the Petitions lack merit and are liable to be dismissed.
9. I have heard the learned counsel for the parties and perused the available record with their able assistance.
10. Ordinarily, it is the duty of the Court to examine and address the contentions raised by learned counsel for the parties, and to engage in a detailed discussion of each and every legal point and issue arising in the petitions. However, during the pendency of the above petitions, the Parliament enacted the off the Grid (Captive Power Plants) Levy Act, 2025, which has materially altered the legal landscape. It is an admitted position that the impugned notification dated 17.03.2025 was issued by the Federal Government under the purported authority of the off the Grid (Captive Power Plants) Levy Ordinance, 2025, whereby it was notified that the rate for the purposes of subsection
(1) of the said Ordinance shall be Rs. 791 per million British Thermal Units (MMBTU). However, it is equally undisputed that the said Ordinance is no longer in the field, having been repealed and replaced by the Off-the-Grid (Captive Power Plants) Levy Act, 2025, a statute duly enacted by the Parliament. Once the Ordinance ceased to exist, any notification issued under its authority lost its legal sanctity. Consequently, the impugned notification, having been issued under a repealed and non-existent legislative instrument, is rendered Non est in law, and does not carry any binding legal effect. Any action or determination based on such a notification is therefore legally untenable.
11. Pakistan is a democratic state governed under a parliamentary system, as enshrined in the Constitution of the Islamic Republic of Pakistan, 1973. In such a system, the sovereign legislative authority rests with the Parliament, which comprises the National Assembly and the Senate. Article 50 of the Constitution affirms that the Parliament shall consist of the President and the two Houses.
It is the exclusive prerogative of the Parliament to enact laws on matters enumerated in the Federal Legislative List. In the exercise of this legislative authority, the Parliament has enacted the off the Grid (Captive Power Plants) Levy Act, 2025, which reflects its competence to legislate in matters concerning Captive Power Plants.
12. The petitioners in the instant petitions have impugned the notification which was issued on the basis of an ordinance 2025 promulgated by the President of Pakistan as unconstitutional. During the pendency of the petitions, the Parliament enacted the off the Grid (Captive Power Plants) Levy Act, 2025 (The Act). Neither the act nor its vires have been challenged in the instant petitions.
13. Prior to the 26th Constitutional Amendment, the High Courts exercised broad equitable jurisdiction under Article 199 of the Constitution, and it was well-established that the Court, while exercising constitutional jurisdiction, could mould the relief in accordance with the facts and circumstances emerging during proceedings even if such relief had not been specifically prayed for so long as it was in furtherance of justice. However, after the enforcement of the Constitution (Twenty-Sixth Amendment) in the existent constitution, a significant restriction has been introduced. The amendment has curtailed the discretion of the High Courts to grant unprayed relief, thereby reinforcing the principle that the Courts are to remain within the bounds of the relief expressly sought by the petitioner.
"(1A) For removal of doubt, the High Court shall not make an order or give direction or make a declaration on its own or in the nature of a suo motu exercise of jurisdiction beyond the contents of any application filed under clause ( 1)".
14. It may be noted that through an interim order dated 08.04.2025, this Court had directed the Federal Government to deposit the tax amount collected from the petitioners, under the impugned Ordinance, into the Federal Consolidated Fund. Furthermore, it was ordered that such amount shall not be appropriated, transferred, or expended for any purpose other than those provided under the said Ordinance. However, in view of the subsequent legislative development, whereby the off the Grid (Captive Power Plants) Levy Act, 2025, has been enacted by the Parliament, effectively repealing and replacing the earlier Ordinance, the basis of the said interim arrangement no longer exists. Accordingly, the interim order dated 08.04.2025, being provisional in nature and having served its purpose, is hereby recalled.
15. In view of the foregoing, as the impugned notification was issued under a repealed Ordinance which no longer holds the force of law, and in the absence of any challenge to the vires of the subsequently enacted Captive Power Plants Act, 2025, no relief can be granted to the petitioners within the permissible constitutional framework. Furthermore, in light of the constitutional restraint introduced through the Twenty-Sixth Amendment, this Court cannot grant any relief beyond what has been specifically prayed for. Accordingly, the instant petition as well as petitions mentioned in schedule stand dismissed.
Mark "A"
Sr.
No.CASE NUMBER TITLE 1 W.P. 1268-2025 M/s Nishat Chunain Limited V/S FOP etc 2 W.P. 1269-2025 M/s Umar Spinning Mills Limited etc V/S FOP etc 3 W.P. 1280-2025 M/s Premium Textile Mills Limited etc V/S FOP etc 4 W.P. 1281-2025 M/s Diamond Fabrics Limited etc V/S FOP etc 5 W.P. 1282-2025 Continental Biscuits Ltd etc V/S FOP etc 6 W.P. 1283-2025 Feroze 1888 Mills Limited V/S FOP etc 7 W.P. 1320-2025 M/s Popular Food Industries Pvt Ltd etc V/S FOP etc. 8 W.P. 1329-2025 M/s Liberty Mills Ltd etc. V/S FOP etc 9 W.P. 1372-2025 M/s Shafi Spinning Mills Ltd etc V/S FOP etc 10 W.P. 1384-2025 English Biscuit Manufactures Pvt Ltd etc V/S FOP etc. 11 W.P. 1599-2025 Indus Motor Company Limited V/S Federation of Pakistan etc 12 W.P. 1600-2025 Pakistan Refinery Limited V/S Fop etc 13 W.P. 1721-2025 Al-Karam Towel Industries Pvt. Ltd. V/S FOP etc