Cotton Cess Act, 1923

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THE COTTON CESS ACT, 1923 
 
 
   
 
CONTENTS 
1.  Short title and extent. 
2.  Definitions. 
3.  Imposition of Cotton Cess. 
4.  Constitution of Pakistan Central Cotton Committee. 
5. [Omitted]. 
6.  Delivery of monthly returns. 
7.  Collection of cess by Collector. 
8.  Collection of cess on exported cotton. 
9.  Finality of assessment and recovery of unpaid cess. 
10.  Power to inspect mills and take copies of records and accounts. 
11.  Information acquired to be confidential. 
12.  Application of proceeds of cess. 
12A.  [Omitted]. 
13.  Validation. 
14.  Dissolution of Committee. 
15.  Power of the Federal Government to make rules. 
16.  Power of the Committee to make rules. 
17.  Publications of rules. 

 
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THE COTTON CESS ACT, 1923 
1ACT No. XIV of 1923 
[16th March, 1923] 
An Act to provide for the creation of a fund for the improvement and development of the growing, 
marketing and manufacture of cotton 2* *. 
 WHEREAS it is expedient to provide for the creation of a fund to be expended by a 
Committee specially constituted in this behalf for the improvement and development of the growing, 
marketing and manufacture of cotton 2* * It is hereby enacted as follows:― 
 1. Short title and extent. —(1) This Act may be called the 3* Cotton Cess Act, 1923.  
 4[(2) It extends to the whole of Pakistan.]  
 2. Definitions. In this Act, unless there is anything repugnant in the subject or context,— 
(a)  “Collector” means, in reference to  cotton consumed in a mill in 5[Pakistan], 
the Collector of the district in which the mill is situated 6[or any other officer 
appointed by the 7[Federal Government] to perform the dutie s of a collector 
under this Act];  
(b)  “the Committee” means the 8[Pakistan Central Cotton Commit tee] constituted 
under this Act;  
(c)  “cotton” means raw cotton, whether baled or loose, which has been ginned;  
9[(d)  “Collector of Customs” means an officer appointed as such under section 3 of 
the Customs Act, 1969 (IV of 1969);  
(dd)  “Customs airport” and “customs-port” mean, respectively, a customs - air-port 
and customs port as defined in section 2 of the Customs Act, 1969 (IV of 
1969);] 
 
 
 
 
1For Statement of Objects and Reasons, see Gaz. of India, 1923, Pt. V, p. 59; and for Report of Joint Committee, see ibid, 1923, Pt. V, p. 97. This Act 
has been extended to the Leased Areas of Baluchistan, see the Leased Areas (Laws) Order, 1950 (G.G.O. 3 of 1950) ; and applie d in the Federated 
Areas of Baluchistan, see Gazette of I ndia, 1937, Pt. I, p. 1499. The Act has also been extended to the Baluchistan States Union, see the Baluchistan 
States Union (Federal Laws) (Extension) Order, 1953 (G.G.O. 4 of 1953), as amended. The Act has been and shall be deemed to have been brought into 
force in Gwadur with effect from the 8th September, 1958 by the Gwadur (Application of Central Laws) Ordinance, 1960 (37 of 1960), s. 2.  
2 The words “in India” rep. by the Federal Laws (Revision and Declaration) Act, 1951 (26 of 1951), s. 3 and II Sch.  
3 The word “Indian” omitted by A.O., 1949.  
4 Subs. by the Central Laws (Statue Reform) Ordinance, 1960 (21 of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1955), for sub-section 
(2), as amended by A.O., 1937, A.O., 1949 and Act 26 of 1951.  
5 Subs. by Ordinance 21 of 1960, s. 3 and 2nd Sch. (with effect from the 14th October, 1955), for “the Provinces and the Capital of the Federation ” 
which had been subs. by A.O., 1949, for “British India”.  
6 Ins. by the Indian Cotton Cess (Amdt.) Act, 1924 (1 of 1924), s. 2.  
7 Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” which was previously amended by A.O., 1937, for “L.G.”.  
8 Subs. by the Cotton Cess (Amdt.) Act, 1948 (30 of 1948), s. 2, for “Indian Central Cotton Committee” (with effect from the 11th January, 1949).  
9 Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and Sch., II, for clause (d). 
 
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(e)  “mill” means any place which is a factory a s defined in section 2 of the 
1[Factories Act, 1934], and in which cotton is converted into yarn or thread 
either for sale as such or for  conversion into cotton goods 2[which includes all 
tissues and other articles (except yarn and thread) woven, knitted or otherwise 
manufactured, wholly or partly from cotton yarn]; 3*  
(f)  “prescribed” means prescribed by rules made under this Act.  
 4*   *   *   *   *   *   * 
 3. Imposition of Cotton Cess. —5[(1) There shall be levied and collected on all cotton either 
exported from the Provinces of Pakistan to any place outside Pakistan or consumed in any mill in the 
Provinces of Pakistan a cess at such rate as the 6[Federal Government] may fix by notification,7in the 
official Gazette. 
 8*   *   *   *   *   *   *  
 9[4. Constitution of Pakistan Central Cotton Co mmittee. —(1) As soon as may be after 
the commencement of this Act the 6[Federal Government] shall set up the Committee. 
 (2) The Committee shall c onsist of such members as the 6[Federal Government] may, by 
notification in the official Gazette, appoint to be members, and the 6[Federal Government] shall 
appoint from among them one to be the President and another to be the Vice-President.  
 (3) The Committee shall be a body corporate by the name of the Pakistan Central Cotton 
Committee, having perpetual succe ssion and a common seal with powers to acquire and hold 
property both movable and immovable, and to contract, and shall by the said name sue and be sued.]  
 10[(4) Nothing contained in the Industrial Relations Ordinance, 1969, (XXIII of 1969) shall 
apply to or in relation to the Committee or any of the officers, advisers and employees appointed by 
it.] 
 5.[Incorporation of the Committee.]  Omitted by the Cotton Cess (Amendment) Act, 1948 
(XXX of 1948), s. 5. 
 6. Delivery of monthly returns. —(1) The owner of every mill shall furnish to the Collector, 
on or before the seventh day of each month, a return stating the total amount of cotton consumed or 
brought under process in the mill during the preceding month, together with such further information 
in regard thereto as may be prescribed: 
 Provided that no return shall be required in regard to cotton consumed or brought under 
process before the commencement of this Act. 
 
 
1 Subs. by Act 30 of 1948, s. 2, for “Indian Factories Act, 1911”. (with effect from the 11th January, 1949).  
2 Subs. by Ord. 27 of 1981, s. 3 and Sch. II, for “as defined in section 3 of the (Cotton Duties Act, 1896) ”. The words in crotchets were previously 
amended by the Indian Finance Act, 1926 (19 of 1926), s. 3.  
3The word “and” omitted by the Indian Cotton Cess (Amdt.) Act, 1939 (5 of 1939), s. 2.  
4 Clause (g) which was added by Act 5 of 1939, s. 2, rep. by the Federal Laws (Revision and Declaration) Act, 1951 (26 of 1951), s. 3 and Sch. II.  
5 The original section 3 was re -numbered by the Indian Cotton Cess (Amdt.) Act, 1924 (1 of 1924), s. 3, as sub -section (1) of that section, which has 
been subs. by Act 30 of 1948, s. 3 (a).  
6 Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”.  
7 For such notifin., see Gaz. of P., 1957, Pt. I, p. 13.  
8 The proviso to sub-section (1), and sub-section (2) omitted by Act 30 of 1948, s. 3 (b).  
9 Subs. ibid., s. 4, for section 4, as amended by A.O., 1937 and Acts 14 of 1929, s. 2, 5 of 1939, s.3 and 34 of 1939.  
10 Sub-section (4) added by the Cotton Cess (Amdt.) Ordinance, 1980 (13 of 1980), s. 2. 
 
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 (2) Every such return shall be made in such form and shall be verified in such manner as may 
be prescribed. 
 7. Collection of cess by Collector . —(1) On receiving any return made under section 6 , the 
Collector shall assess the cotton cess payable in respect of the period to which the return relates, and 
if the amount has not already been paid shall cause a notice to be served upon the owner of the mill 
requiring him to make payment of the amount assessed within ten days of the service of the notice.  
 (2) If the owner of any mill fails to furnish in due time return referred to in section 6 or 
furnishes a return which the Collector has reason to believe is incorrect or defective, the Collector 
shall assess the amount payable by him in such manner, if any, as may be prescribed, and the 
provisions of sub-section (1) shall thereupon apply as if such assessment had been made on the basis 
of a return furnished by the owner:  
 Provided that, in the case o f a return which he has reason to believe is incorrect or defective, 
the Collector shall not assess the cess at an amount higher than that at which it is assessable on the 
basis of the return without giving to the owner a reasonable opportunity of proving the correctness 
and completeness of the return. 
  (3) A notice under sub-section (1) may be served on the owner of a mill either by post or by 
delivering it or tendering to it the owner or his agent at the mill. 
 1[8. Collection of cess on exported cotton. —(1) In respect of cotton exported by air, land or 
sea, cess shall be assessed and levied by the Collector of Customs at the customs -airport or customs-
port of export, and, subject to the provisions of this Act and of any rules made thereunder, shall, fo r 
all or any of the purposes of the Customs Act, 1969, (IV of 1969) be deemed to be a duty of customs. 
 (2) The Central Board of Revenue constituted under the Central Board of Revenue Act, 1924, 
(IV of 1924) may make rules providing, on such conditions as may be specified in the rules, for the 
refund of the cess levied where cotton is exported by land and subsequently imported into Pakistan]. 
 9. Finality of assessment and recovery of unpaid cess .—(1) An assessment made in 
accordance with the provisions of section 7 or section 8 shall not be questioned in any Court.  
 (2) Any owner of a mill who is aggrieved by an assessment made under section 7 may, within 
three months of service of the notice refe rred to in sub -section (1) of that section, apply to the 
2[Federal Government] for the cancellation or modification of the assessment and, on such 
application, the 2[Federal Government] may cancel or modify the assessment and order the refund to 
such owner of the whole or Part, as the case may be, of any amount paid thereunder.  
 (3) Any sum recoverable under section 7 may be recovered as an arrear of land revenue. 
 10. Power to inspect mills and take copies of records and accounts.—(1) The Collector or 
any officer empowered by general or special order of the 3[Federal Government] in this behalf shall 
have free access at all reasonable times during working hours to any mill or to any part of any mill.  
 
 
1 Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and Sch. II, for section 8, which was previously amended by 
various enactments.  
2 Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” which was previously amended by A.O., 1937, for “L.G.”. 
3 Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” which was previously amended by A.O., 1937, for “L.G.”.  
 
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 (2) The Collector or any such officer may at any time, with or without notice to the owner, 
examine the working records, sale records and account s of any mill and take copies of or extracts 
from all or any of the said records or accounts for the purpose of testing the accuracy of any return or 
of informing himself as to the particulars regarding which information is required for the purposes of 
this Act or any rules made thereunder.  
 (3) Where any officer other than the Collector proposes to examine under sub -section (2) any 
record or account containing the description or formulate of any trade process, the owner of the mill 
may give to the said of ficer, for transmission to the Collector, a Written notice of objection and the 
officer shall thereupon seal up the record or account pending the orders of the Collector. 
 11. Information acquired to be confidential .—(1) All such copies and extracts and al l 
information acquired by a Collector or any other officer from an inspection of any mill or warehouse 
or from any return submitted under this Act shall be treated as confidential.  
 (2) If the Collector or any such officer discloses to any person other th an a superior officer 
any such information as aforesaid without  the Previous sanction of the 1[Federal Government], he 
shall be punishable with imprisonment which may extend to six months an d shall also be liable to 
fine : 
 Provided that nothing in this section shall apply to the disclosure of any such information for 
the purposes of a prosecution in respect of the making of a false return under this Act. 
 12. Application of proceeds of cess .—(1) On the last day of each month, or as soon 
thereafter as may  be convenient, the proceeds of the cess recovered during that month shall, after 
deduction of the expenses, if any, of collection and recovery, be paid to the Committee.  
 (2) Subject to such conditions as may be prescribed, the said proceeds and any othe r monies 
received by the Committee shall be applied to meeting the expenses of the Committee and the cost of 
such measures as it may, with  the previous approval of the 2[Federal Government], decide to 
undertake for promoting agricultural and technological research in the interests of the cotton industry 
in 3[Pakistan]. 
 12A. [Payment to Government of Burma.]  Omitted by the Cotton Cess (Amendment) Act, 
1948 (XXX of 1948), s. 8. 
 13. Validation. No Act done or proceeding taken under this Act shall be question ed on the 
ground merely of the existence of any vacancy in or any defect in the con stitution of the Committee 
or 4[any of its sub-committees]. 
 14. Dissolution of Committee . The 2[Federal Government] may, by notification in the 
5[official Gazette], declare that, with effect from such date as may be specified in the notification, the 
Committee shall be dissolved, and on the making of such declaration all funds and other property 
vested in the Committee shall vest 6[in the 7[Federal Government] and] this Act shall be deemed to 
have been repealed. 
1 Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” which was previously amended by A.O., 1937, for “L.G.”.  
2 Subs. by F.A.O. 1975, Art. 2 and Table, for “Central Government” which was been Subs. by A.O., 1937, for “G.G. in C.,”  
3 Subs. by the Cotton Cess (Amdt.) Act, 1948 (30 of 1948), s. 7, for “India”.  
4 Subs. ibid., s. 9, for “the Standing Finance Sub-Committee, if any” 
5 Subs. by A.O., 1937, for “Gazette of India”.  
6 The words “in His Majesty and” have successively been amended by A.O., 1937 and A.O., 1961, Art. 2 and Sch. (with effect from  the 23rd March, 
1956), to read as above.  
7 Subs. by F.A.O. 1975 Art. 2 and Table for “Central Government”.  
 
 
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 15. Power of the Fe deral Government to make rules .—(1) The 1[Federal Government] 
may make rules2 for the purpose of carrying into effect all or any of the provisions of this Act. 
 (2) In particular, and without prejudice to the generality of the foregoing power, such rules 
may provide for all or any of the following matters, namely:— 
(a)  for prescribing the time within which nominations shall be made under section 
4 whether in the first instance or on the occurrence of vacancies;  
(b)  for prescribing the term of office of the members of the Committee;  
(c)  for prescribing the circumstances in which and the authority by which any 
member may be removed;  
(d)  for the holding of a minimum number of meetings of the Commi ttee during 
any year;  
(e)  for the maintenance by the Com mittee of a record of all business transacted 
and the submission of copies of such records to the 3[Federal Government];  
(f)  for the definition of th e powers of the Committee and 4[its officers] to enter 
into contracts which shall be binding on the Committee, and the manner in 
which such contracts shall be executed;  
(g)  for the regulation of the travelling allowances of members of the Committee 
and of their remuneration, if any;  
(h)  for the definition of th e powers of the Committee and 4[its officers] in respect 
of the appointment, promotion and dismissal of officers and servants of the 
Committee, and in respect of the creation and abolition of appointmen ts of 
such officers or servants;  
(i)  for the regulation of the grant of pay and leave to officers and servants of the 
Committee, and the payment of leave allowances to such officers and servants, 
and the remuneration to be paid to any person appointed to act for any officer 
or servant to whom leave is granted;  
(j)  for the regulation of the payment of pensions, gratuities, compassionate 
allowances and travelling allowances to officers and servants of the 
Committee;  
(k)  for prescribing the establishment and maintenance of a pro vident fund for the 
officers and servants of the Committee, and for t he deduction of subscriptions 
to such provident fund from the pay and allowances of such officers and 
servants, other than Government servants whose services have been lent or 
transferred to the Committee; 
 
1 Subs. by F.A.O.1975, Art.2 and Table, for “Central Government” which was been Subs. by A.O, 1937, for “G.G.inc.,.”  
2 For such rules, see Gen. R. & O.  
3 Subs. F.A.O., 1975, Art. 2 and Table, for “Central Government” which was previously amended by A.O., 1937, for “G.G. in C.”.  
4 Subs. by the Cotton Cess (Amdt.) Act, 1948 (30 of 1948), s. 11 (a), for “of the Secretary”.  
 
 
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 (1)  for prescribing the preparation of budget estimates of the annual receipts and 
expenditure of the Committee and of supplementary estimates of expenditure 
not included in the budget estimates, and the manner in which such estimates 
shall be sanctioned and published;  
(m)  for defining  the powers of the Committee, 1[its subcommittees, if any, the  
President and its officers], in regard to the expenditure of the funds of the 
Committee, whether provision has or has not been made in the budget 
estimates or by reappropriation for such expenditure, and in regard to the 
reappropriation of estimated savings in the budget estimates of expenditure;  
(n)  for prescribing the maintenance of accounts of the receipts and expenditure of 
the Committee and providing for the audit of such accounts;  
(o)  for prescribing the manner in which payments are to be made by  or on behalf 
of the Committee, and the officers by whom orders for making deposits or 
investments or for withdrawals or disposal of the funds o f the Committee shall 
be signed;  
(p)  for determining the custody in which the current account of the Committee  
shall be kept, and the bank or banks at which surplus monies at the credit of 
the Committee may be deposited at interest, and the conditions on which such 
monies may be otherwise invested;  
(q)  for prescribing the preparation of a statement showing the s ums allotted to 
Provincial Departments of Agriculture or institutions not under the direct 
control of the Committee for expenditure on research, the actual expenditure 
incurred, the outstanding liabilities, if any, and the disposal of unexpended 
balances at the end of the year;  
(r)  the assessment, levy, and payment of the cotton cess in resp ect of cotton 
exported by sea 2[or by land]; and  
(s)  any other matter which is to be or may be prescribed. 
 16. Power of the Committee to make rules . The Committee m ay, with  the previous 
sanction of the 3[Federal Government], make rules4 consistent with this Act and with any rules made 
under section 15 to provide for all or any of the following matters, namely:— 
(a)  for the appointment of 5[appropriate sub -committees] and the delegation 
thereto of any powers exercisable under this Act by the Committee;  
(b)  for prescribing the method of appointment, removal and replacement and the 
term of office of members of the 6[sub-committees], and for t he filling of 
vacancies therein;  
 
1 Subs. by the Cotton Cess (Amdt.) Act, 1948 (30 of 1948), s. 11(d), for “the Standing Finance Sub -Committee, if any, the President and the Secretary, 
respectively”.  
2 ins by hidden cotton cess (amdt) Act, 1924(I of 1924), s.5. 
3 Subs. by F.A.O. 1975, Art and Table b are bore, Centrel Govt.  
4 For such rules, see Gen. R. & O. 
5 Subs. by the Cotton Cess (Amdt.) Act, 1948 (30 of 1948), s. 12 (a), for “a Standing Finance Sub-Committee”.  
6 Subs. ibid., s. 12(b), for “Standing Finance Sub-Committee”.  
 
 
 
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 (c)  for the appointment of the dates, times and places for meet ings of the 
Committee and the 1[Sub-committees], and for regulating the procedure to be 
observed at such meetings;  
(d)  for determining the circumstances in which securit y may be demanded from 
officers and servants of the Committee, and the amount and nature of such 
security in each case;  
(e)  for determining the times at which, and the circumstances in which, payments 
may be made out of the provident fund and the conditi ons on which such 
payments shall relieve the fund from further liability;  
(f)  for determining the contribution. if any, payable from the funds of the 
Committee to the provident fund;  
(g)  for regulating generally all matters incidental to the provident fund and the 
investment thereof;  
(h)  for defining the powers and duties of the 2[officers,] of the Committee. 
 17. Publications of rules. All rules made under section 15 or section 16 shall be published in 
the 3[official Gazette] and, on such publication, shall have effect as if enacted in this Act. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Subs. ibid., s. 12(b), for “Standing Finance Sub-Committee”.  
2 Subs. ibid., s. 12 (c), for “Secretary”.  
3 Subs. by A.O., 1937, for “Gazette of India”.