2014 (5) TMI 1159 - HC - Customs

Grant of Additional License - renewal of its certificate of recognition as a trading house - delay in filing application - case of Revenue is that though it is true that the petitioner filed an application for grant of an additional licence on 28-5-1984 but as the application was not accompanied by a trading house certificate and no fresh application was filed after renewal of trading house certificate on 18-2-1992, the petitioner cannot be granted any relief on the basis of applications dated 26-5-1984 or 26-2-1992. Held that - The respondents have, in essence, taken a stand that application dated 18-2-1992, though filed within time cannot be entertained as it cannot be construed to be a fresh application filed after receipt of the renewed certificate but is for renewal of an application that was not maintainable. After a delay of nearly nine long years, certificate of recognition as a trading house, valid from 1-4-1983 to 8-11-1983, was issued, in accordance with the 1983-84 policy, on 18-2-1992. The petitioner, in accordance with rights conferred by Para 203(1) of the 1983-84 policy, allowing the petitioner to apply for an additional licence within two months of renewal, addressed letter dated 26-2-1992, within eight days of issuance of the certificate, to the Joint Chief Controller of Imports and Exports, Ludhiana, informing him that as it has received a trading house certificate on 18-2-1992, and while referring to a letter dated 27-8-1991 and in continuation of earlier letters, prayed that an additional licence be issued at the earliest - A perusal of the letter reveals that though it states that it may be read in continuation of letter dated 27-8-1991, which in turn relates back to application dated 26-5-1984, which as referred to earlier was filed when the application for renewal of the certificate was still pending, clearly prays for grant of an additional licence. The reasons assigned for rejecting the petitioner s application are neither tenable nor germane to the controversy in hand but are based upon a perverse and arbitrary attempt to twist facts and misread application dated 26-2-1992 - The respondents have, in our considered opinion and for reasons we are unable to fathom, intentionally and by a technical play of words construed, this letter as a mere letter for revival of application dated 26-5-1984. The letter does not by any words whether specific or inferential pray for revival of application dated 26-5-1984 but instead specifically prays that an additional licence be issued. The use of the words in continuation etc. does not raise an inference, as held by the respondents that letter dated 26-2-1992 merely seeks revival of application dated 26-5-1984. Petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Legality of the denial of an additional licence to the petitioner.
2. Entitlement to 20% premium on the face value of the additional licence as per REP Circular No. 11/93.
3. Interpretation and application of Para 203(1) of the Import and Export Policy for the year 1983-84.
4. Validity and timing of the application for an additional licence.

Detailed Analysis:

1. Legality of the denial of an additional licence to the petitioner:
The petitioner sought the quashing of letters/orders denying the issuance of an additional licence. The petitioner argued that the denial was illegal as it ignored relevant facts and Para 203(1) of the 1983-84 policy. The petitioner was recognized as an export house on 28-12-1982, and the certificate expired on 31-3-1983. The petitioner applied for renewal on 25-7-1983 and for an additional licence on 26-5-1984. The respondents rejected the application, citing the absence of a valid trading house certificate and a delay of seven months and 25 days. The court found that the petitioner was eligible for an additional licence under Para 203(1) and had applied within the prescribed period after receiving the renewed certificate on 18-2-1992. The court concluded that the denial was arbitrary and perverse, necessitating the setting aside of the impugned orders.

2. Entitlement to 20% premium on the face value of the additional licence as per REP Circular No. 11/93:
The petitioner also sought a direction for the respondents to pay a 20% premium on the face value of the additional licence in terms of REP Circular No. 11/93. The circular allowed exporters to surrender additional licences and receive a 20% premium. The petitioner opted for this payment on 17-5-1993. The court directed the respondents to consider the petitioner's application for the premium payment afresh, in accordance with the law.

3. Interpretation and application of Para 203(1) of the Import and Export Policy for the year 1983-84:
Para 203(1) allowed trading houses to apply for additional licences within two months of securing a renewed trading house certificate. The petitioner applied for renewal on 25-7-1983 and for an additional licence on 26-5-1984, believing the certificate would be renewed. The respondents argued that the application was invalid due to the lack of a valid certificate and the delay. The court found that the petitioner applied for an additional licence within eight days of receiving the renewed certificate on 18-2-1992, thus complying with Para 203(1). The court held that the respondents' rejection of the application was based on a misinterpretation of Para 203(1).

4. Validity and timing of the application for an additional licence:
The respondents argued that the petitioner did not file a fresh application within two months of receiving the renewed certificate and only sought the revival of the 1984 application. The court found that the petitioner's letter dated 26-2-1992, submitted within eight days of receiving the renewed certificate, clearly requested an additional licence and did not merely seek the revival of the earlier application. The court concluded that the petitioner's application was valid and timely, and the respondents' rejection was unjustified.

Conclusion:
The court allowed the petition, set aside the impugned orders, and directed the Director General of Foreign Trade to decide the petitioner's application for an additional licence and the 20% premium payment afresh within three months. The court emphasized that the respondents' actions were arbitrary and based on a misinterpretation of the relevant policy provisions.