' This judgment shall dispose of Writ Petitions Nos. 5216, 9969 of 1992 and 13161, 11641, 16642, 11643 and 11644 of 1993 in which common questions of law arise for determination.
2. The case of the petitioners as explained by their learned counsel, in brief is, that the Cotton Cess Act, 1923 though legal at the time of its enactment, has ceased to be a valid law after the enforcement of the Constitution of Islamic Republic of Pakistan, 1973, inasmuch as the ginning of cotton on which the cess has been levied is neither a federal nor a concurrent subject and as the Act has not been brought in conformity with the Constitution within a period of two years prescribed by Article 268, it has lost its validity.
2-A. Mr. Imtiaz R. Siddiqui, Advocate also argued that, in any case, notification dated 16-5-1993, whereby the rate of cess has been increased from Rs,6 to Rs,10 per standard bale, was bad in law.
3. In reply, Mr. Ijaz Ahmad, learned Deputy Attorney-General relying upon Article 279 of the Constitution of Islamic Republic of Pakistan, 1973 submitted that the validity of the cess cannot be questioned on the touchstone of the other provisions of the Constitution. The learned Deputy Attorney-General also refuted the argument that the levy of cotton cess was not covered by the 4th Schedule to the Constitution.
4. Taking up the first contention raised by the learned counsel for the petitioners, it is correct that under Article 268 of the Constitution, all laws in force as on the day of enforcement of the Constitution were to remain operative subject to the Constitution and in case of conflict, those laws were to be brought in conformity with the Constitution within 2 years from the commencement day. The position, however, with regard to taxes, fees and cesses was different as under Article 279 of the Constitution which operates notwithstanding any other thing contained therein, all taxes and fees levied under any law in force immediately before the commencing day shall continue to be levied until they are varied or abolished by Act of the appropriate Legislature. This provision is in the nature of an exception to Article 268 of the Constitution and has an overriding effect in view of the non-abstante clause.
5. In this view of the matter, the validity of these taxes, fees, cesses cannot be questioned on the touchstone of a provision in the 1973 Constitution. This view is supported by The Peracha Textile Mills Ltd. v. Pakistan and others PLD 1963 (W.P.) Kar. 319, Qazi Abdul Majid v. The Province of Sindh through Secretary, Excise & Taxation etc. PLD 1974 Kar. 417, Kazi Abdul Majid v. Province of Sindh through Secretary, Excise and Taxation, Government of Sindh Kar. And another PLD 1976 Karachi 600 and Ilirjine and Co. v. Islamic Republic of Pakistan and another 1993 SCMR 1342.
6. If the matter had rested there, a serious question would have arisen as to whether the rate of taxation could be varied except by an Act of the appropriate Legislature. On that premises perhaps, it could be argued that the notification dated 16-5-1993 enhancing the levy was not valid.
However, this question does not requires any adjudication as I am of the view that it is within the legislative competence of the Federal Legislature to levy cotton cess even under the 1973 Constitution.
7. The only argument in support of invalidity of the Act was that as ginning of cotton as also cotton cess is one of the subjects mentioned in the Federal or the concurrent list given in the 4th Schedule to the Constitution the Provincial Legislature alone could impose such a cess.
8. I regret my inability to agree with the learned counsel for the petitioners. It is a well-accepted principle that the entries in the legislative list do not confer any powers but generally demarcate the areas of legislative fields reserved for each Legislature. As early as 1941, it was pointed out by the Federal Court in United Provinces v. Mt. Atiqa Begum AIR 1941 FC 16 that it is the pith and substance of the enactment which has to be considered to find out its true nature and character and the competency of the Legislature. It was also observed that the entries should be read and interpreted in broadest possible manner and not in a narrow and pedantic sense. The law on the subject has been summed up by the Honourable Supreme Court in Fauji Foundation and another v.
Shamimur Rehman PLD 1983 SC 457 in the following words:- "...Here I would refer to the observations of Maurice Gwyer, C.J., in the United Province v. Atiqa Begum 1940 FCR 110 'I think, however, that none of the items in the lists is to be read in a narrow or restricted sense, and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it'. This opinion was accepted by this Court in Haider Automobile Ltd. v. Pakistan PLD 1969 SC 623 Syed Ghulam Ali Shah v. State PLD 1970 SC 253 and Pir Rashidud Daula v. Chief Administrator of Auqaf PLD 1971 SC 401 Hamoodur Rehman, C.J. In F.B. Ali's case at pp. 523-524 on a review of the case-law, held; "I have myself tabulated some five principles, which are deducible from decided case, for the resolution of the controversy, as to whether one or the other Legislature is encroaching on the other's field. Such controversy is, in my view inevitable in any scheme of division of legislative fields, because, "no matter how careful the draftsman or how exhaustive the legislative lists it is not possible to provide for all conceivable eventualities or to categories each subject of legislation under a specific label".
Finally, it was observed, "The pith and substance of rule still holds good and we have to consider as to what in reality is the true nature and character of the impugned legislation if any controversy arises as to the competency of the Federal Legislature to legislate with regard .To a subject not directly covered by any specific item in the list." In the milieu of the rule stated above, Item No,1 as worded should be construed, not in narrow or' restricted sense but in a wider sense so as to include all ancillary or subsidiary matters which can reasonably be included within it."
7. On proper analysis and examination of the Cotton Cess Act, 1923, it would be seen that it provides for establishment of Cotton Cess Authority with a view to generate funds for research and advancement of technology so far as cotton and its growth was concerned. It is so provided in the preamble. Under section 4, the Federal Government is required to set up Pakistan Central Cotton Committee. Section 12 provides that the cess recovered shall, after deduction of expenses of collection and recovery, be paid to the Committee which shall apply the same to meeting the expenses of the Committee and on such measures as may be taken by it with the previous approval of the Federal Government to undertaken or promote agriculture and technological research in the interest of cotton industry in Pakistan.
8. From the above, it is evident that the cess has been levied in order to generate funds for the advancement and growth of cotton and to acquire latest technology in this behalf. I am, therefore, in agreement with the learned Deputy Attorney-General that the levy of cess in question is covered by and is relatable to items No,16 and 32 of the Schedule to the Constitution which reads as under:- -- "Item No,16. Federal agencies and institutes for the following purposes, that as to say, for research, for professional or technical training, or the promotion of special studies."
"Item No,32. National planning and national economic co-ordination including planning and coordination of scientific and technological research."
9. Consequently, it is idle on the part of the petitioners to contend that the subject covered by the legislation in question is neither in the Federal nor in the concurrent list. It may also be mentioned that in the case of the Peracha Textile Mills Ltd. v. Pakistan and others (PLD 1963 (W.P.) Kar. 319), the Division Bench observed that cotton cess is one of the duties of excise.
' In view of what has been stated above, all these petitions fail and are dismissed with no order as to costs.