ISLAMABAD: The Federal Constitutional Court, during the hearing of a case concerning the Government of Punjab’s imposition of royalty on cement production, granted time on Wednesday to the government’s counsel to seek further instructions from the provincial government and adjourned the case for a date-in-office (indefinitely).
The court also expressed serious concern over the decision to charge royalty on each bag of cement, observing that collecting royalty on a finished product is effectively equivalent to placing an additional burden on the public.
A three-member bench, headed by Justice Hasan Azhar Rizvi, heard the case. Counsel for the factory owners argued that under the law, the government has the authority to collect royalty only on minerals. He submitted that imposing royalty on a bag of cement is not actually royalty but amounts to the imposition of a new tax and, in effect, results in the public being charged double excise tax.
In response, Justice Hasan Azhar Rizvi remarked that the government should collect royalty only on minerals rather than on bags of cement. He questioned how the government could impose royalty on a finished product and asked how much the price of a bag of cement had increased as a result of this royalty. He further stated that government law officers should inform the government that such an application of royalty is entirely inappropriate.
Justice Rozi Khan observed that the real burden of imposing royalty on cement bags would fall on the public rather than on factory owners. He noted that factory owners would simply pass the cost of royalty on to consumers, thereby increasing the financial burden on ordinary citizens.
During the proceedings, the Additional Advocate General of Punjab requested time from the court to obtain fresh instructions from the Punjab government regarding the case. The court accepted the request and adjourned further hearings in the case for an indefinite period.
