Electricity As A Subject After The 18th Amendment
Electricity as a subject falls within Part II of the Federal Legislative list. An important body which comes into play when the matters pertain to Part II of the Federal Legislative list is the Council of Common Interests (CCI). The CCI is a constitutional body which underwent a wide increase in powers after the Eighteenth Amendment to the Constitution of Pakistan in 2010.
Since the creation of Pakistan, electricity has been a central/federal subject but through the 18th amendment, electricity has been added as entry no. 4 to Part II of Federal Legislative list. Consequently, the provinces were also given powers over the subject of electricity. It was via the 18th Amendment that the power to levy taxes on the consumption of electricity and the power to determine the tariff for its distribution within the province was given to provinces as well.
The subject of electricity was added to Part II of the Fourth Schedule after 18th Amendment. Apart from this, it is dealt with separately in Article 157 of the Constitution which reads as follows:
“ 157. Electricity.—(1) The Federal Government may in any Province construct or cause to be constructed hydro-electric or thermal power installations or grid stations for the generation of electricity and lay or cause to be laid inter-Provincial transmission lines.
[Provided that the Federal Government shall, prior to taking a decision to construct or cause to be constructed, hydro-electric power stations in any Province, shall consult the Provincial Government concerned.]
(2) The Government of a Province may—
(a) to the extent electricity is supplied to that Province from the national grid, require supply to be made in bulk for transmission and distribution within the Province:
(b) levy tax on consumption of electricity within the Province:
(c) Construct power houses and grid stations and lay transmission lines for use within the Province; and
(d) determine the tariff for distribution of electricity within the Province.
(3) In case of any dispute between the Federal Government and a Provincial Government in respect of any matter under this Article, any of the said Governments may move the Council of Common Interests for resolution of the dispute.”
A plain reading of this Article suggests that as far as the construction of power installations, grid stations and inter-provincial transmission lines is concerned, the Federal government may make laws.
The word ‘may’ indicates that this is a directing provision and not a mandatory provision which in turn means that this subject is not under exclusive federal power, rather the concerned provincial governments are also to be taken into confidence.
Consultation with the respective provincial government, however, is mandatory as the provisionary clause (1) of Art. 157 says:
“The Federal Government shall, prior to taking a decision… shall consult the Provincial Government concerned.”
Another noteworthy point is that this provisionary clause which makes consultation with the provincial government mandatory was added by the 18th Amendment Act of 2010. So, in the pre 18th amendment scenario, provinces had little or no say. But in post 18th amendment scenario, certain amendments have also placed provinces at a pivotal point.
Mr. Shahid Hamid, a senior advocate of the Supreme Court of Pakistan, while presenting his paper titled “Constitutional Developments in Pakistan” at the Pakistan Institute of Legislative Development And Transparency (PILDAT) Conference in Islamabad on May 05, 2016 said:
“Federation shall not build new hydroelectric stations in any Province except after consultation with that Province.”
In 1997 AC (NLR) 217, the following principle was held:
“Provincial Government can determine tariff for distribution of electricity within province under sub-clause (d) of Art. 157 only when it purchases electricity in bulk from national grid station for distribution within province or when it constructs power houses and grid stations and lays transmission lines for use within province.”
Moreover, in Flying Cement Co. Ltd and others vs. Government of Pakistan through secretary Ministry of Water and Powers and others [PLD 2015 Lahore 146] the honourable Lahore High Court held that:
“….provincial Government had been empowered to levy tax on distribution of Electricity in the province but the said fact did not take away the powers of the Federal Government to do the same mainly because exercise of such powers by the provincial Government was not mandatory rather optional—When both Federal and provincial Governments had simultaneous jurisdiction to legislate qua a particular subject , preference should be given to the Federal Government—subject of Electricity was simultaneously on the Federal as well as provincial Legislative List, hence the Federal Government as well as the provincial Government could legislate qua the subject without entering into arena of each other.”
And the ‘arena’ of the provincial government has been limited (not in stricto senso, but to an extent) to levying taxes and duties within the bounds of provinces.
In JDW Sugar Mills Limited through GM Finance vs Province of Punjab through secretary Department of irrigation and Power, Lahore and another [PLD 2005 Lahore 596] the Punjab Government issued a notification (under S.13 of the Punjab Finance Act, 1964) dated 25-8-2001, whereby it was provided that any person generating electric power from a generator having the capacity of more than 500 KW shall pay the electricity duty with effect from 1-7-2001. This notification was assailed in the constitutional petition with a further contention that the notification in question was not retrospective in effect.
The Court held that, “issuance of notification in question was consistent with the legislative field of power of provincial Government and its will. Notification in question which was issued in supersession of all previous notifications on the subject thus had the backing of the statutory provisions, validity whereof was beyond any doubt. Levy of duty, therefore, could not be disputed or assailed on any sustainable ground.”
Therefore, it can concisely be said that on a subject of electricity which is not constitutionally bifurcated between the federation and provinces, the federal Legislature has the power to legislate to the maximum extent of its powers. To the extent of provinces, however, the federal legislature can legislate but with the “consultation” of the respective provincial governments. It is also to be noted that this consultation must be substantial and not be done merely as a procedural formality. However, relying on the principle in PLD 2015 Lahore 146, when both the federation and provincial legislature have simultaneous jurisdiction to legislate, the legislation done by the federation shall have a superior status.
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