ISLAMABAD: The Supreme Court has noted that the government`s Nov 3, 2015 notification for paying Rs20 billion in subsidies under the Prime Minister`s Kissan Package to manufacturers of single super phosphate fertiliser lacl(s the backing of any statute or rule.

`This fiat of the governance was not supported by precedent,` Justice Qazi Faez Isa said in a judgement authored by him.

But the two-member bench, also comprising Justice Ejaz Afzal Khan, decided not to dilate further upon the issue since the government has already disbursed more than half of the subsidy amount and the matter had only incidentally arisen during the court proceedings.

Through the verdict issued onMonday, which was reserved on May 27, the court disposed of the federal government`s appeal against a Peshawar High Court judgement of Dec 8, 2015.

The high court had held that if the fertiliser met the standards, then there should be no legal justification to deny the subsidy to the manufacturer.

The Supreme Court also avoided discussing the grant of subsidy in detail in view of the assurance held out by Attorney General Ashtar Ausaf Ali that the government intended to lay before the National Assembly a supplementary budget statement this month to comply with Article 84 of the constitution and to legalise the subsidy.

Prime Minister Nawaz Sharif had announced the Rs341bn Kissan Package around the time of local government elections. One of the components of the package is Rs20bn subsidy to be given to manufacturers of single super phosphate fertiliser with the con-dition that the end-product should be made by using imported, not local, rock.

Of Rs20bn, the federal government had to pay Rs10bn, the Punjab government Rs7bn and the Balochistan government Rs400 million. The rest of the amount was to be paid by the governments of Sindh and Khyber Pakhtunkhwa.

During the proceedings, the attorney general admitted that the subsidy was not part of the annual budget statement and had also not been incorporated in the finance act. But, he said, the subsidy was approved by the federal cabinet and, as a result, the secretaries of the ministries of National Food Security and Research and Finance were empowered to issue the notification.

With the verdict, the Supreme Court issued a directive that all manufacturers of the fertiliser wanting to avail ofthe subsidy would have to undergo a test at the Pakistan Standards and Quality Control Authority`s Standards Development Centre (Chemical Division) to ascertain whether the phosphate content in the fertiliser was 18 per cent or not.

If the fertiliser met the standard and possessed18pc phosphate content then there should be no legal justification to deny the manufacturer the subsidy as per the notification, the judgement said.

It said that the attorney general had argued that the government could exercise its executive powers under Article 84 to authorise the expenditure incurred in providing the subsidy.

The AG had also referred to Article 164 which deals with miscellaneous financial provisions.

The provision empowers the government to allocate grants for any purpose even if the purpose is not such that par-liament or a provincial assembly may make laws about it.

Assisting the court, senior advocate and Leader of Opposition in the Senate Aitzaz Ahsan argued that Article 84 enabled the government to authorise expenditure exceeding the budgeted amount already approved by the National Assembly or when an emergency situation had arisen necessitating expenditure to be made.

But the matter of the subsidy was not covered by the language of Article 84 of the constitution, he pointed out.

Barrister Ahsan said that though the incumbent and previous governments had sought to have recourse to Article 84 in such situations, the wrong practice should be rectified and prior approval of the National Assembly must be sought before making any expenditure in such situations, which werenotcoveredbythelanguageofthe constitutional provision.

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