RAMESH CHHOTALAL DOSHI Vs. UNION OF INDIA

JUDGEMENT

(1.) The Government of India issued the Imports (Control) Order, 1955 in exercise of powers under Section 3 of the Imports and Exports (Control) Act, 1947. The Act was enacted to enable the Central Government to restrict and regulate or prohibit imports and exports of goods by issuing an order. The Central Government publishes the import policy in the form of a book which is popularly known as 'Red Book' for every year. The Central Government from the year 1954 devised a scheme known as 'Export Promotion Scheme.' Under this Scheme, traders were to get themselves registered, then export goods and earn foreign exchange for the country and in return the Government gives certain incentives in the form of replenishment licences and also cash incentives. The Import Policy for the year 1983-84 prescribes that the Export House will be allowed to import OGL items against the REP Licence issued in their own name or transferred to them by others. The petitioner is carrying on business of financing REP Licences and Commission Agent in the name of M/s. Prashant Trading Company, and the petitioner is the sole proprietor of the firm. M/s. Andhra Pradesh Fisheries Corporation Ltd., Visakhapatnam are the registered exporters and two REP licences bearing Nos. 2851264 and 2851265, both dated March 16, 1983 were issued in their favour. The licences were in respect of items in Column 4 of Appendix 17 of the Import Policy. M/s. Andhra Pradesh Fisheries Corporation transferred the licences in favour of the petitioner for valuable consideration. The petitioner in turn, transferred the licence No. 2851264 in favour of M. Pransukhlal Pvt. Ltd. and licence No. 2851265 in favour of respondent No. 5. Both, M. Pransukhlal Pvt. Ltd. and respondent No. 5 are recognised export houses. Two separate applications were made by the transferees M. Pransukhlal Pvt. Ltd. and respondent No. 5 to the Controller of Imports & Exports, Bombay for endorsement on the REP Licences in respect of OGL items. Respondent No. 4 carried out the required endorsement on the licence transferred in favour of M. Pransukhlal Pvt. Ltd., but declined to do so in respect of the licence transferred in favour of respondent No. 5. It appears that initially endorsement was not made on the licence of respondent No. 5 because some corrections were required in the application, but subsequently after the corrections were carried out the endorsement was turned down in view of the circular issued by the Chief Controller of Imports & Exports on June 1, 1983 to all the Licensing Authorities. This circular provided that additional import entitlements are not allowed to be used for import of OGL item by Export Houses against REP licences under the provisions of Para 185 and against such additional entitlements, only the items specifically permitted in Column 5 will be allowed. The refusal to make the requisite endorsement on the licence of respondent No. 5 has given rise to filing of the present petition under Article 226 of the Constitution of India in this Court on October 21, 1983.

(2.) To appreciate the contentions of the petitioner, it is necessary to make reference to certain provisions of the Import Policy for the year April 1983 to March 1984. Paragraph 136(1) of this Policy provides that the items permissible for import against each export product covered by the policy are given in column 4 of the Policy statement given in Appendix 17, read with column 5. The licence transferred by the petitioner in favour of respondent No. 5 gives the description of goods as O.T.S. Containers and further provides that the licence represents additional replenishment at the rate of the 15 per cent. Now, turning to Appendix 17/F. 1.3, which comes under the heading 'Fish and Fish Products', the import entitlements is shown in column 3 as 5% Column 4 reads as under :

(3.) Shri Rana, learned counsel appearing on behalf of the petitioner, submits that the import policy permits the holder or REP licence to import OGL items in accordance with para 185 and therefore it was not permissible for the respondent authorities to decline to make the requisite endorsement on the licence transferred in favour of respondent No. 5 in accordance with paragraph 185(3) of the Policy. The learned counsel urged that respondent No. 4 declined to make an endorsement in view of the circular issued by the Chief Controller of Imports & Exports. It was submitted that as long as the circular was not received in the office of respondent No. 4, the requisite endorsement was effected on the REP licence and indeed it was so effected on the licence transferred by the petitioner in favour of M. Pransukhlal Pvt. Ltd. In answer to the petition, on behalf of the respondent authorities, return sworn on January 14, 1985 by Capt. Shafaat Ahamed, Deputy Chief Controller of Imports and Exports has been filed. The authorities denied that the decision not to make the endorsement on the licence of respondent No. 5 was taken in view of there circular. Shri Lokur, learned counsel appearing on behalf of the authorities, stated at the outset that the decision was not taken because of the circular but independent of that by construction of the relevant part of the policy. Shri Rana was obviously right in his submission that it is not permissible for the authorities to deprive the importers of the advantage conferred by the Policy by issue of departmental circulars, but as Shri Lokur concedes that the decision was not based on the circular, it is not necessary to investigate his aspect of the matter any further.