By Cyril Almeida
CJ Iftikhar's stock is higher than ever, but his court has veered into dangerous separation-of-powers terrain that could undermine institutional stability.
WHEN CJ Iftikhar got his job back in March, all eyes were on him and President Zardari to detect any signs of friction.
In a dysfunctional country like Pakistan, opportunities for conflict between institutions of the state abound. Few though would have guessed that something as mundane as petrol would be the next flashpoint.
Petrol, diesel and kerosene, the lifeblood of society and the economy, are heavily taxed in Pakistan. Back in March, days after being restored, the chief justice had made it clear he didn’t like the idea of high fuel prices.
Heading a three-member bench of the Supreme Court that was looking into the government’s petroleum pricing policy, CJ Iftikhar remarked that ‘the welfare state had the authority to recover tax on petroleum but not to make profit’. He also made a revealing statement about his judicial philosophy: ‘The people are distressed and the courts are compelled to do the work of the government organisations.’
So, armed with the idea that he has to do the government’s work, in May CJ Iftikhar ordered the government to reduce the price of petroleum products. The government ‘complied’ and reduced prices by a token amount, but by then it was already drawing up plans to thwart CJ Iftikhar’s persistence.
The answer: replace the controversial petroleum development levy, authorised under an obscure 1961 ordinance, with a ‘carbon tax’ that the National Assembly would approve as part of the Finance Bill, 2009. There are other charges and taxes on petrol, but the development levy had proved the most controversial.
So with a stamp of approval from parliament for a carbon tax, the government thought it would be in the clear and could easily raise Rs120bn, in addition to the other taxes, from petroleum products. But CJ Iftikhar isn’t deterred so easily.
The carbon tax was challenged in the Supreme Court by, among others, the PML-N secretary general, Iqbal Zafar Jhagra, and the court decided to suspend the tax on Tuesday. In the short order issued by CJ Iftikhar, more evidence is available of his court’s activist, highly interventionist approach; the pricing issue, the order states, involves matters of fundamental rights and social justice guaranteed by the constitution. Perhaps marginally more relevantly, CJ Iftikhar queried the purpose of the carbon tax and wrote that no evidence had been furnished to demonstrate that it was in any way connected to environmental concerns.
The chief justice is right; the tax has nothing to do with the environment - it has everything to do with the government trying to raise money easily. And yes, it is grossly unfair of the government to tax petroleum products so brazenly simply because it won’t do anything about raising taxes from elsewhere in the economy. Tax on petrol, diesel and kerosene hurts the poor more than the rich and the people have every right to be angry. But what is the right forum for addressing such issues? Should we gladly cede such concerns to the judiciary? There may or may not be sound legal reasons against the carbon tax, but there is no denying that overtly social concerns have been weaved into the debate from the very beginning.
The petitioners and lawyers arguing against the government’s pricing policy in the Supreme Court have constantly harped on the social angle. And CJ Iftikhar has made his similar concerns clear. But the National Assembly approved the Finance Act, 2009 unanimously on June 26, and in doing so also approved the carbon tax contained in it. Speaking on the floor of the assembly, the chief whip of the PML-N, Sheikh Aftab Ahmed, claimed his party supported the government in the budget process ‘with a view to creating new democratic norms and strengthening the system’.
Someone should have sent that memo to Iqbal Zafar Jhagra, for if he was so worried about the legality of the carbon tax he should have first asked his party members why they didn’t vote against it before rushing to the Supreme Court. Of course, this being Pakistan, political opportunism comes out on top - fuel prices are a good stick to beat an already unpopular government with - and ‘strengthening the system’ be damned. But why blame just the PML-N? President Zardari has gone and demonstrated how much he cares about the system and its strengths - and, surprise surprise, it isn’t much.
With the Supreme Court set to hear the carbon tax issue on Thursday morning, Mr Zardari had a late-night brainstorm and decided to float a new ordinance to do away with the carbon tax and re-impose the petroleum development levy. It looks rather neat: when CJ Iftikhar was going after the petroleum development levy, the government replaced it with a carbon tax, and when CJ Iftikhar began to look into the carbon tax, the government brought the old petroleum levy back.
Except it’s too clever by half. The right thing for the government to have done was to defend the carbon tax in the Supreme Court as legal - parliament approved it, there is no prima facie evidence that it is illegal (however unfair) and a marker could have been laid down regarding the boundaries of the respective powers of the executive, legislature and judiciary.
There was always the possibility that CJ Iftikhar would have struck down the carbon tax anyway, but the government could have reassessed its options at that point.
Instead Mr Zardari ordered Attorney General Latif Khosa to make an extraordinary U-turn in court - Latif Khosa told the Supreme Court that the carbon tax was a ‘mistake’. A mistake? What sort of mistake? Political or legal? We’ll never know.
The battle isn’t over - the new petroleum development levy ordinance will be challenged and CJ Iftikhar can continue to probe the pricing of fuel generally - but already some things are apparent.
CJ Iftikhar’s stock is higher than ever, but his court has veered into dangerous separation-of-powers terrain that could undermine institutional stability.
Zardari looks bad from both an institutional and a populist point of view. The opposition looks good in the public eye, but has missed a chance to make a stand for strengthening the institutions of democracy. Sound familiar? Welcome to Pakistan.
(Source: DAWN)
