LHC stays recovery of electricity duty

RAWALPINDI: In a significant legal development that could impact the provincial exchequer’s tax collection strategy, the Lahore High Court (LHC) has granted major interim relief to the oil and gas sector by staying the recovery of electricity duty from major industrial players.

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 petitioners, represented by Asad Ladha, Advocate, challenged the constitutional validity of the Punjab Finance (Amendment) Act, 2025.

The companies argued that the provincial legislature had introduced amendments to the Punjab Finance Act 1964, specifically targeting electricity generated by industrial units through their captive power plants for self-consumption.

Counsel for the oil companies contended that the amendments were an attempt to “circumvent and neutralise” an authoritative pronouncement of the Supreme Court of Pakistan.

He argued that in the Kunjah Textile Mills case, the apex court had already ruled that electricity duty is not leviable on self-generated electricity used for a company’s own use.

The counsel further submitted that the legislative action is “manifestly arbitrary” and seeks to override a binding judicial interpretation, which is impermissible under Articles 189 and 190 of the Constitution.

The bench observed that the petitioners had established a “good prima facie case” based on the previous relief secured from the Supreme Court.

Published in Dawn, March 14th, 2026

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