The Sindh High Court has dismissed a series of petitions filed by 16 sugar mills seeking the release of an inland freight subsidy that was approved years earlier but never disbursed. The court ruled that the subsidy had effectively lapsed and could not be revived through judicial intervention, marking a significant decision for Pakistan’s sugar industry.

In its judgment, the court held that subsidies fall under the category of financial incentives and not fundamental rights. As a result, the mills could not invoke Article 199 of the Constitution to compel the federal government to allocate funds. The decision draws a firm line between administrative discretion and enforceable legal entitlements.

The petitions were initiated after the Economic Coordination Committee (ECC) had approved the subsidy to support sugar exports, but the Ministry of Commerce stopped the process following a National Accountability Bureau inquiry involving multiple mills. The mills’ counsel argued that the federal government publicly committed to the subsidy and that withholding it amounted to an unlawful reversal.

During the proceedings, Barrister Asad Ahmed, representing the Trade Development Authority of Pakistan (TDAP), informed the bench that the disbursement could not move forward because formal approvals and required funds were not available. He noted that TDAP was bound by the ministry’s directions and could not independently release payments.

The ruling comes at a time of heightened regulatory scrutiny on the sugar sector. On 29 October, the Federal Board of Revenue announced mandatory installation of GPU-based, real-time video analytics systems at all sugar mills nationwide. The surveillance will monitor production lines through a centralised electronic network, allowing the FBR to detect discrepancies and curb tax evasion.

The notification warned that mills without the approved monitoring system in place would not be allowed to operate in the upcoming crushing season. Authorities say the reforms aim to address longstanding issues of under-reporting, revenue leakage and manipulation of production data.

With the court confirming that the lapsed subsidy cannot be revived, sugar mills now face a tighter regulatory environment and additional compliance obligations as they head into the next production cycle.