Single Sugar Phosphate fertilizer subsidy to be available to all who pass the 18 % phosphatic content threshold

Supreme Court of Pakistan: The Bench, comprising of Ejaz Afzal Khan and Qazi Faez Isa, JJ., upheld, with one modification, the decision of the Peshawar High Court regarding the grant of phosphate fertilizer subsidies. The proposed modification is that, all wanting to avail the subsidy must subject their products to the required test by the Pakistan Standards and Quality Control Authority Standards Development Center (Chemical Division), in order to evaluate the desired 18% phosphatic content in an SSP (Single Sugar Phosphate) fertilizer.  Various legal and constitutional questions and the contentions of the parties were outlined by the Court.

Via notifications dated 15th October and 3rd November, the Ministry of Food Security and Research had notified subsidies on Di-ammonium phosphate (DAP), Nitrophos, NPK fertilizers and Single Sugar Phosphate, based on P-content. Aggrieved by item 3 of the notification dated 3rd November, which restricted subsidy to be “given to SSP manufactured by using imported rock”, a Writ Petition was preferred under Article 199 of the Constitution of the Islamic Republic of Pakistan by the Respondent-Company to the Peshawar High Court. The Company argued that the fertilizer manufactured by using ‘imported rock’ did not constitute intelligible criteria to discriminate between those entitled to receive the subsidy, and that subsidy should also be given to those, whose fertilizer had phosphatic content of not less than18 % . Furthermore the company’s products had been tested and deemed to have more than 18 % phosphatic content as certified by the Pakistan Standards and Quality Control Authority, however, competitor companies either importing fertilizer or creating fertilizer using imported rock, had not been subject to these tests.

The Peshawar High Court in its judgment had stated that the 18 % P-content should be the ‘litmus test’ or the ‘sine qua non’ for qualifying for the subsidy announced by the Federal Government, and accepted the contention that the proposed classification was unreasonable and had no rational nexus with the object of the proposed scheme. Neither could imported rock or fertilizer escape the required test by the Statutory Body; and if a product were to meet the standards, there would be no legal justification to a denial of subsidy. The observations of the High Court were well accepted by the Division Bench adding that, “the criteria that can be quantified should be quantified and it must be objective and reasonable.   [The Federation of Pakistan v. Agritech Limited, Civil Petition No. 1067 of 2016, decided on 06-06-2016]

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