Peshawar High Court (PHC) Wednesday stayed collection of Cotton Cess from the textile mills of Khyber Pakhtunkhwa by the federal government in the industrial zones till next order of the court. A divisional bench comprising Justice Irshad Qaiser and Justice Syed Afsar Shah issued the stay order in a writ petition filed by the Khyber Pakhtunkhwa chapter of All Pakistan Textile Mills Association. The bench also issued notice to Ministry of Textile Industries through its secretary, Directorate of Cotton Cess Management and Pakistan Central Cotton Committee, directing them to submit reply in the case before next hearing. During hearing, the petitioner’s lawyer Qazi Ghulam Dastageer submitted before the bench that the petitioners are the owners of Textile Mills in Khyber Pakhtunkhwa, which was running the industry in a worst law and order situation in the province.
The lawyer submitted that the Textile industry in the province was playing an important role in the country’s economy and was also paying millions of income tax to the government. In his arguments, the lawyer stated that the federal government’s amendments in the law for Cotton Cess Act was illegal as the government did not made constitutional amendments in the Cotton Cess Law as constitutional amendments in the law were necessary for Cess, Surcharge and Tax. He contended that the amended law was imposed on those traders, who are importing cotton from other countries and there was no cess on exporting of cotton. However, he stated that no constitutional steps were taken for the amendments regarding Cotton Cess. Furthermore, he stated that the cotton cess was imposed on the pattern of excise duty and under the law there was no excise duty on the locally made goods including raw materials. The lawyer argued that the Textile industry would further went into loss if the Cotton Cess was imposed on it and the industrialists of the country would be forced to transfer investment to foreign countries. He pointed out that the industry especially in the Khyber Pakhtunkhwa has already on the verge of collapse due to worst law and order situation for the law several years and imposing of the cess would further deteriorate the condition of the industry in the province. He prayed the court to declare the imposition of the Cotton Cess on Textile Mills of the province as illegal and against the law. The court after preliminary hearing stayed the collection of Cotton Cess form the Textile Mills of the province and sought reply from the government.