LAHORE: The Lahore High Court on Thursday sought a reply from the federal government on two identical petitions challenging up to 55 per cent sales tax on petroleum products and the standard mechanism for setting prices of the products in international market.

In the first petition filed by Pakistan Justice Party before Justice Mamoon Rashid, Advocate Azhar Siddique argued that according to existing prices, after adding the sales tax along with allied levies, the rate of the oil should not be increased from Rs30 per litre with any stretch of imagination. However, he said, in the instant case the government functionaries were adamant to sell the oil to the public at the rate of Rs71.25 per litre.

The counsel said the federal government had no authority and jurisdiction to fix the petroleum prices in view of the provisions of Ogra Ordinance, 2002 and any policy which was taking away such power was violation of the Constitution.

He said the government was defrauding the nation of million of rupees by fixing petroleum prices and that too at exorbitant rates.

The lawyer pleaded that the government should be directed to charge the prices of the oil according to the existing international market rate in the large interest of public welfare.

Justice Rashid directed the government to submit its reply by Feb 24.

Hearing a similar petition filed by Punjab opposition leader Mian Mahmoodur Rasheed, Justice Shahid Waheed issued notices to the government, Ogra and FBR.

Representing the petitioner, Advocate Sheraz Zaka argued that section 3(2) & (6) of Sales Tax Act 1990 was repugnant to the Constitution.

He also challenged the latest notification through which fixed amount of sales tax had been imposed on the petroleum products inflating the prices for commoners.

The counsel pointed out that the impugned notification was issued without getting approval from the parliament. He said the government by imposing a fixed sales tax on petroleum products deprived the citizens of the actual benefit of the reduction in prices in international market. The purpose for this unlawful taxation was to extort maximum tax from consumers, he added.

The counsel prayed to the court to set aside the impugned section of the sales tax law and the notification of increased prices of petroleum products.

Justice Waheed adjourned hearing till March 15 and directed the respondents to submit their replies.

Published in Dawn, February 12th, 2016