Page 130 - CCL AR 2017 Final

certain objections against the release of said refund including an objection that as the burden of this
levy has been passed on to the end customers, thereby this refund does not belong to the Company. The
Company has challenged this show cause notice in the Honourable Peshawar High Court and has taken
the stance that this matter had already been dealt with at the Honourable Supreme Court level, based on
the doctrine of res judicata. The Honourable Peshawar High Court granted a stay order to the Company
against any adverse proceeding by the Department in this case on June 24, 2008.

In April 2011, the Honourable Peshawar High Court settled the writ petition by giving instructions
to the Federal Board of Revenue (FBR) to appoint an independent firm of Chartered Accountants for
verification of this refund claim. However, based on an out of court settlement, the Regional Tax Office
(RTO) Peshawar carried out the verification of this refund claim. This exercise was carried out based
on the terms of reference advised by the Federal Tax Ombudsman (FTO). RTO Peshawar finalized the
report against the Company without giving any consideration to the facts of the case and the factual
and legal submissions of the Company. This report was also not in line with the parameters given by
the FTO. Accordingly, the FTO made a ruling for verification of the adverse observations of the RTO
Peshawar through an independent firm of Chartered Accountant. This ruling of FTO was challenged by
the FBR to the President of Pakistan who is the ultimate authority in such matters. The company made the
presentation to the President of Pakistan upon its invitation through secretariat. The President of Pakistan
rejected the representation of FBR and approved the recommendations of FTO with slight modifications
that this verification will be carried out by two reputed audit firms.

Subsequently, being aggrieved of the orders, the FBR filed a writ petition in the Honourable Peshawar
High Court against the authority of FTO to pass such an order. The Honourable Peshawar High Court has
granted stay as an interim relief to the FBR.

In view of the inherent uncertainties involved and delays associated with such matters, this amount has
not been recognised as income in the profit and loss account.

22.1.2 The Company has filed various refund cases of Rs. 57 million (2016: Rs. 57 million) which are pending
at different adjudication levels. However, keeping in view of the inherent uncertainties involved in such
matters and the fact that it is difficult to determine the outcome of these cases at this stage, no amount
has been recognised as income in the profit and loss account.

22.1.3 The Competition Commission of Pakistan (CCP) had issued a show cause notice to the Company on a
Suo Moto action for an increase in prices of cement across the country on March 20, 2008. The similar
notices were also issued to other cement manufacturers. The Company filed a writ petition before the
Honourable Islamabad High Court (HIHC) challenging the Competition Ordinance, 2007. The HIHC
granted a stay order restricting the CCP to pass any adverse order(s) against the show cause notices issued
to the cement manufacturers.

The HIHC finally dismissed the writ petition and vacated the stay order. However, the Company filed a
writ petition in the Honourable Lahore High Court (HLHC) on this issue. The HLHC allowed the CCP to
issue an order but restricted them from taking adverse action against the cement companies. The CCP in
its order dated August 27, 2009 imposed a penalty of Rs. 6,312 million on the cement industry including
a penalty of Rs. 226 million on the Company. The Company simultaneously filed a writ petition in the
Honourable Supreme Court of Pakistan challenging this order and also challenging the vires of law.
This appeal is still pending adjudication. In line with historic judgement of Honourable Supreme Court
of Pakistan dated July 31, 2009 the CCP Ordinance required approval of the National Assembly. The
CCP Ordinance was repromulgated as an Ordinance twice with some changes creating further legal

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