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.
The views expressed in this article are those of the author and do not necessarily represent the views of CourtingTheLaw.com or any other organization with which she might be associated.
In the very first line of this article article, the author writes, “Electricity as a subject falls within Part II of the Federal Legislative list, on which both the federation and the provinces can legislate.” which is a completely wrong statement since the Federal Legislative List enumerates the legislative competence of the Federation, and not of the provinces. Since after the Eighteenth Constitutional Amendment, the Concurrent List has been omitted, now there is only the Federal Legislative List on which subjects, only the Federal Legislature may legislate. It is also pertinent to mention that besides this list of legislative competence, there exists Article 142 (b) of the Constitution, wherein three subjects are mentioned namely “criminal law, criminal procedure, and evidence”, which are only the Concurrent subjects, and both the Federal as well as provincial governments can legislate on. As such, I find this statement wrong. Moreover, the subject of “electricity” is completely different from the subjects regarding levying of taxes, and imposition of duties, which argument seems confused in the article.
However, I am happy to be corrected if I have misunderstood the stance of author at any point.
Dear Haseeb Ahsan Javed,
You definitely need to be corrected since the statement is not wrong in any way.
You are right that after 18th Amendment, the Concurrent List has been omitted and there remained only Federal Legislative List. But, it does not mean that Provincial Legislatures cannot legislate now and only federal legislature will legislate. Also, you need to be clarified that just because of the name “Federal Legislative List” you must not presume that Federation has exclusive powers over the subjects enlisted therein. You should also know that the Federal Legislative List has two parts (Please refer to IV Schedule of the Constitution). Upon Part I, Federation has exclusive jurisdiction and for Part II it needs to consult Council of Common Interest. (Please refer to Article 154, Clause 1). You can also check the composition of Council of Common Interest from Article 153 of the Constitution as amended by 18th Amendment to get further clarity that how Provincial participation in subjects of Part-II of FEDERAL Legislative list is ensured. Also, Please refer to “PLD 2014 Islamabad 83” and you’ll know whether subjects enlisted in Federal Legislative List (even part II of it) attract exclusive jurisdiction of Federation or Provinces also have a role to the extent of part II. There is a vast pool of research available on this point. You can even consult CCI manuals to clarify this point.
Coming to the second issue, you said that by virtue of Article 142(b) it is only Criminal Law, Criminal Procedure and Evidence that both federation and provinces can jointly legislate over and there’s nothing else. I thank you for drawing my attention towards this Article as this was really not in my mind while writing this article due to its irrelevance to the subject under discussion. Anyhow, the very opening of this Article, “Subject to the Constitution” addresses your confusion very well. Before any of the clauses of Article 142 (including the one you quoted), it says “subject to the Constitution” which means any other Provision which is part of the Constitution and applies/relates to the same matter is to be read along with it and is not to be ignored. Or, in simple terms, Subject to the Constitution means that this Provision or the following provisions (as in this case) are not disconnected with the Constitution and are to be read in consonance with the Constitution. So, the provisions of Article 154 of the Constitution cannot be ignored/read out. (Please refer to the Rules of constitutional Interpretation).
For the third question that you raised, there is no confusion as to subject of electricity and subject of levying taxes being distinct. The scope of this Article includes Electricity and the Constitutional 18th Amendment Act. Since it was 18th Amendment Act that gave powers to provinces also for levying taxes/tariff on consumption and distribution of ELECTRICITY, it is quite clear and relevant to explain the extent of powers that provinces can exercise. (Please refer to Article 157 of the Constitution and Constitutional 18th Amendment Act of 2010)
Please feel free to raise any further queries/ disagreements etc.