Provinces empowered to fix sugar price, LHC rules

LAHORE: The Lahore High Court (LHC) on Thursday declared that the provincial government had the power to control the prices of sugar and other essential food items.

The provincial government can exercise these powers through appropriate legislation by the provincial assembly, it said.

The decision came as a two-judge bench, comprising Justice Shahid Karim and Justice Sultan Tanvir Ahmad, allowed a set of petitions filed by sugar mills.

Through those petitions, the mills had primarily challenged the Price Control and Prevention of Profiteering & Hoarding Order, 2021 issued by the federal government, invoking sections 3 and 4 of the Price Control and Prevention of Profiteering and Hoarding Act 1977.

The mills had assailed the legislative competence of parliament to enact a law and the federal government’s jurisdiction to determine the sugar price within the province of Punjab.

They also challenged last year’s judgement, issued by a single judge bench, on a public interest litigation regarding the fixation of sugar price.

Lawyers representing the appellants/mills submitted that they had taken issue with the federal government’s power to fix sugar price and at no point of time was there a concession on their part. They said the single judge bench held that the 18th Amendment had not taken away or affected the federal government’s powers under the 1977 Act.

Deputy Attorney General Asad Ali Bajwa defended the federal government’s powers relying on Article 151 of the Constitution read with entry 13 of the Federal Legislative List (FLL).

He said the federal government believes the power in question resides in parliament and its intention was to have uniformity in prices across all the provinces.

However, Justice Karim observed that this was not the intention of Article 151, nor was there any such power conferred on parliament by virtue of FLL’s entry 13.

Additional Advocate General Samia Khalid argued that Punjab had the capacity and the competence to control and fix prices of essential food commodities, including sugar, and it was outside the authority of the federal government under the Constitution.

The judge observed that the 1977 Act essentially deals with price control, yet there is no power under the Constitution for parliament to enact such a law which relates to price control of essential food commodities being manufactured and produced in a province and regarding which that province has the exclusive jurisdiction to make laws.

He said the power of parliament is limited to regulating inter-provincial trade and commerce, and no more.

“This does not include the power of price control or price fixation of an essential commodity,” the judge maintained.

He noted that a provincial government is best suited to determine the price considering various circumstances which exist in that province and it will do so upon consideration of the factors necessary to be taken into account while fixing the price of an essential commodity.

Justice Karim further noted that price control of an essential commodity is not required to be undertaken at all times and it can vary from one province to another and it may not be necessary to be done in one province as against another province.

The judge ruled that the federal government cannot be conferred the power to do so across all provinces without regard to the fact that the action to control price of an essential commodity is not required to be undertaken in a particular province.

The bench declared that under the 1977 act, the power of parliament to the extent of controlling prices of essential food commodities and prevention of profiteering and hoarding in relation to Punjab is ultra vires.

It ruled that the 1977 act, to the extent that it extends to the whole of Pakistan, is unconstitutional.

Consequently, the bench set aside the actions taken by the federal departments and the Punjab government and struck down the notifications issued under the Price Control and Prevention of Profiteering & Hoarding Order 2021.

However, the bench refrained from giving an opinion on whether the 1977 Act still applies to the Islamabad Capital Territory, as that question did not arise before it.

The bench said that Constitution and law will take its own course in this regard.

Published in Dawn, October 6th, 2023