LHC stays recovery of electricity duty from oil and gas companies

The Lahore High Court has suspended the recovery of electricity duty from major oil and gas companies after granting interim relief in petitions challenging amendments introduced under the Punjab Finance (Amendment) Act, 2025, Dawn reported. 

A division 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 companies challenged the validity of amendments made to the Punjab Finance Act, 1964, arguing that the changes imposed electricity duty on power generated by industrial units through captive power plants for their own consumption.

Counsel for the petitioners told the court that the amendments were introduced to override a previous ruling of the Supreme Court in the Kunjah Textile Mills case.

According to the petitioners, the Supreme Court had already ruled that electricity duty cannot be charged on electricity generated and consumed by a company for its own use.

The counsel argued that the amendments were contrary to the constitutional principle that judgments of the Supreme Court are binding under Articles 189 and 190 of the Constitution.

After hearing the arguments, the bench observed that the petitioners had established a prima facie case based on the earlier Supreme Court judgment and granted interim relief by staying the recovery of electricity duty.