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Issues Involved
1. Validity of Notifications and Public Notice. 2. Retrospective application of subordinate legislation. 3. Clarificatory nature of the notifications. 4. Vested rights of the petitioners. 5. Doctrine of promissory estoppel. 6. Levy of fees by DGFT. Detailed Analysis 1. Validity of Notifications and Public Notice The primary issue in this petition is the validity of the Notifications and Public Notice issued by the Central Government and DGFT. The petitioners argue that the impugned Notifications, which amend the Exim Policy with retrospective effect, are ultra vires as there is no power conferred by Parliament to do so. The respondents contend that these clarifications were issued to prevent misuse of the scheme by status holders who were artificially inflating their export figures. 2. Retrospective Application of Subordinate Legislation The petitioners argue that delegated or subordinate legislation can only operate prospectively unless expressly provided otherwise by the statute. The Supreme Court's decisions in State of Bihar vs Krishna Kumar Kabra and others support this view. The respondents argue that the amendments are merely clarificatory and thus can be applied retrospectively. 3. Clarificatory Nature of the Notifications The court examines whether the Notifications dated 28th January 2004 and subsequent ones are merely clarificatory or introduce new conditions. The Central Government issued these Notifications to clarify the correct meaning of the scheme and prevent its misuse. The court finds that the provisions of the Notification dated 28th January 2004 are clarificatory and align with the basic objective of the scheme. 4. Vested Rights of the Petitioners The petitioners contend that their right to receive duty-free entitlement crystallized upon achieving the prescribed incremental growth. The court agrees, stating that the right vests immediately upon achieving the incremental growth, and subsequent amendments cannot take away this vested right. The court refers to the Supreme Court's decisions in Bejgam Veeranna Venkata Narasimloo vs State of Andhra Pradesh and Samtel India Ltd vs Commissioner of Central Excise to support this view. 5. Doctrine of Promissory Estoppel The petitioners argue that the Central Government is bound by the doctrine of promissory estoppel and cannot withdraw the benefits after exports have been completed. However, the court notes that this issue is not seriously pressed in light of the Supreme Court's decisions in Kasinka Trading and anr vs Union of India and The Sales Tax Officer vs Shree Durga Oil Mills. 6. Levy of Fees by DGFT The petitioners challenge the levy of fees by the DGFT based on the value of the application for duty-free certificates. The court finds no substance in this challenge. Conclusion The court partially allows the petition, quashing and setting aside the Public Notice dated 28th January 2004. It declares that the Notifications dated 21st and 23rd April 2004 will have only prospective operation. The exports made by the petitioners prior to these Notifications will be computed for determining their entitlement. No order as to costs.
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