LHC suspends Lesco notices to steel mills

LAHORE:The Lahore High Court has suspended the notices issued by Lahore Electric Supply Company (Lesco) to various steel mills for recovery of arrears of general sales tax (GST). Justice Jawad Hassan passed the stay order on the petitions filed by dozens of steel mills.

On behalf of the millers, Advocate Mohsin Virk argued that the arrears of the GST could not be now imposed on on the petitioners as the relevant law – Sales Tax Special Procedures Rules 2007 – formulating such imposition had already been repealed through SRO in 2019.

He said the petitioners being consumers of the Lesco had been making regular payments of monthly electricity bills. He pointed out that during the tax period from July 2008 to June 2019, the petitioners had been paying the tax in the electricity bills under the 2007 rules. The counsel contended that the Lesco started sending notices to the steel mills for the recovery of the arrears under the head of increased rate of GST. He said the respondent company had no authority to add the arrears of the GST to the current bills of electricity. He argued that as per the dictum laid down by the superior courts, the discos had no powers to collect the arrears of sales tax under the provisions of the Sales Tax Act 1990.

He requested the court to set aside the notices issued by the Lesco for being unlawful. The judge issued notices to the respondents for submission of the replies and suspended the operation of the impugned recovery notices till the next date of hearing.