SC dismisses govt plea to set aside order barring action on sugar commission report

ISLAMABAD: The Supreme Court dismissed the federal government’s plea on Thursday to stop the implementation on the recommendations of the Sugar Inquiry Committee (SIC).

The apex court’s three-member bench under Chief Justice Gulzar Ahmed heard the case today on the plea filed against the Sindh High Court’s decision which had stopped the government from taking action against sugar mill owners held responsible for the sugar price hike earlier this year. 

In today’s hearing, the government’s lawyers asked the court to see whether the commission was impartial and also heard the stance of the sugar mill owners.

However, the AGP replied that there was no need to listen their stance as it was a fact-finding commission. He added that the report was an eye-opener, adding that all executive authorities have been activated against it.

The chief justice inquired as to how the SIC report can impact the mill owners, asking them about their concerns on the matter.

The CJP then turned to the lawyer for the sugar mill owners and asked him why he seeks a stay order as it was just a report by the commission.

Makhddom Ali Khan, the counsel for the sugar mill owners, then responded saying that the executive action has been challenged by some sugar mill owners in various courts. He added that reaching out too the high courts was not out of the ordinary.

Justice Gulzar Ahmed added that the situation was caused by the government itself as it opens an inquiry which leads to court cases.

Meanwhile, Justice Ahsan once again asked Makhdoom Ali Khan why the sugar mill owners approached the SHC after reaching out to IHC.

Advocate Makhdoom Ali Khan said that the Sugar Mills Association had approached the Islamabad High Court in its personal capacity and the commission only provided recommendations.

“If there are impactful fact-findings in any report then a claim can be made,” he told the judges.

To which Justice Ajaz-ul-Ahsan said that apparently the SIC did fact-finding and it identified ‘deal’ and several other aspects.

“If the state institutions issue show-cause notice then present your stance over there,” said the judge.

The CJP then remarked that so far no action has been taken against any sugar mills.

“Sugar mills will get nothing out of declaring the report illegal,” remarked CJP. While Justice Ahsan added that the regulatory authorities can take action without mentioning the report.

“Sugar mills have the complete right to defend themselves before the regulatory authorities,” remarked Justice Ahsan.

Justice Ahsan said that according to the SIC report the sugar mills owners were not heard, adding that their rights will be protected.

The attorney general, in his statement, said that the commission pointed out political nexus, however, he believes that no medial trial should be carried out against anyone.

“I have told the government not to give instructions to any institution on this matter,” he said, adding that he has urged the government to let the institutions work independently in this regard.

“The federal cabinet took back instructions earlier given to the institutions upon my recommendation,” said the AG.

He continued that the report brought forth the nexus behind the crisis, to which Justice Ahsan said that it seems that Federal Investigation Bureau and other institutions lack capabilities to perform well.

After the arguments, the apex court subsequently turned down the government's plea against barring action on the SIC report, adjourning the case until July 14.

The SC also directed that the plea should now be presented before a three-member bench.

Interior ministry challenges SHC's orders

Last week, the interior ministry approached the Supreme Court to challenge the Sindh High Court’s (SHC) decision barring the federal government from taking action on the recommendations of the Sugar Inquiry Commission report.

In its petition, the federal government said the top court was informed that the SHC gave relief to the sugar mills association without listening to the government.

Also read: Govt to challenge IHC decision regarding sugar commission report

It added that the stay order cannot be issued without listening to the other party involved in the case, appealing to the court to declare the order as null and void.

The petition also states that Islamabad High Court (IHC) has declared that the commission report does not affect the rights of the sugar mills association. 

SIC revelations

The Sugar Inquiry Commission report had laid bare some startling revelations about how the price of sugar is fixed, how exports of the commodity are faked to avail rebates on sales taxes, and how billions of rupees are overcharged by sugar mills owners.

According to sources, the report mentioned in depth how the amount of sugar exported to Afghanistan is routinely inflated to show as if 75 tonnes of the commodity were being exported per truck.

However, this is barely possible, given that the maximum capacity of a truck, even when overloaded, does not exceed 30 tonnes.

The scam also seemingly has another purpose: laundering money. If sugar is being exported to Afghanistan, the payment should also be coming in from the same country.

However, it was found by the commission that many sugar mill owners were receiving telegraphic transfers for payments for sugar sold to Afghanistan from the US and Dubai, therefore seemingly whitening money and earning dollars at the same time.

Another important finding highlighted in the report is that sugar mills paid an estimated Rs22bn in taxes to the Government of Pakistan, but out of that total amount, Rs12bn was reclaimed in rebates. Hence, the net contribution was close to around Rs10bn.