IHC rejects intra-court appeal by sugar mill owners against inquiry commission

ISLAMABAD: The Islamabad High Court rejected the intra-court appeal by sugar mill owners against the formation of the Sugar Inquiry Commission, whose report made startling revelations about the scandal.

The SIC report released last month had laid bare startling revelations about how the prices of sugar are 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.

The court announced its verdict in the case today (Tuesday) which it had reserved on July 24.

Justice Mian Gul Hasan Aurangzeb and Justice Lubna Saleem Pervez, in the verdict, rejected the appeal by the owners, upholding the earlier decision of the single bench.

On July 25, the IHC reserved its judgment on an appeal of the Sugar Mills Association against the constitution of the sugar inquiry commission.

The petitioners had called for the sugar inquiry report released on May 21 to be declared void and the actions ordered by the prime minister in this regard suspended.

The plea, filed by Advocate Salman Akram Raja, stated: "The scope of the Impugned report clearly exceeds the constitutional mandate and limitations of a Federal Commission of Inquiry constituted under the 2017 Act, as it trespasses into matters within the exclusive legislative and executive domains of the Provinces. The entire inquiry has been carried out in a completely illegal, unlawful, opaque, biased and discriminatory manner."

"It has been conducted in complete contravention to the requirements of the 2017 Act and the relevant terms of reference. The principle of natural justice as well as the Fundamental Rights of the petitioners including the right to due process, fair trial and non-discrimination have been violated," read the petition.

It was filed after the government’s announcement that it is forwarding cases to the National Accountability Bureau, FIA and other federal agencies to take punitive actions against those involved in the scandal.

Sugar Inquiry Commission's report

The Sugar Inquiry Commission report had revealed how the price of sugar is fixed 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.