LHC Suspends Electricity Duty on Captive Power Plants

The Lahore High Court has temporarily halted the collection of electricity duty from leading oil and gas companies after granting interim relief in petitions challenging amendments introduced through the Punjab Finance (Amendment) Act, 2025, according to a report by Dawn.

A divisional bench comprising Justice Jawad Hassan and Justice Tariq Mahmood Bajwa issued the order while hearing constitutional petitions filed by Pakistan Oilfields Limited and Attock Refinery Limited.

The petitioning companies questioned the legality of amendments made to the Punjab Finance Act, 1964, contending that the revised provisions seek to levy electricity duty on power generated by industrial units through captive power plants solely for internal consumption.

During the proceedings, counsel representing the petitioners submitted that the amendments were enacted with the apparent objective of circumventing an earlier ruling of the Supreme Court of Pakistan in the Kunjah Textile Mills case.

The petitioners further maintained that the apex court had previously clarified that electricity duty cannot be imposed on power generated and consumed by an entity for its own operational use.

It was argued that the amendments are inconsistent with constitutional provisions, particularly Articles 189 and 190, which make the judgments of the Supreme Court binding on all courts and authorities across the country.

After considering the submissions, the bench observed that the petitioners had established a prima facie case based on the earlier Supreme Court ruling and consequently granted interim relief by suspending the recovery of electricity duty.