2023 (11) TMI 1233 - HC - Customs

Seeking to permit the export Of non basmati Indian White Rice with HS code 1006 30 90 - issuance of Notification No. 20/2023 - banning/ prohibiting export of Non-basmati white rice - contracts entered into prior to the date of the impugned notification - HELD THAT - There is no dispute regarding existence of concluded contracts prior to issuance of the impugned notification. The impugned notification fetters the petitioner from discharging its obligations under concluded contracts. The interim direction granted by this Court only permits the petitioner to supply the rice that was stored in the warehouse before 20.07.2023. That would only facilitate the petitioner to discharge his obligations partially. It is fairly settled that notifications issued imposing restrictions shall not be permitted to operate retrospectively. No doubt the restrictions imposed in the notifications operate retrospectively and impede the traders from honouring their obligations. Such impediment is impermissible being in violation of the doctrine legitimate expectation. Thus without expressing any opinion on the constitutional validity of the impugned notification the interim orders dated 19.10.2023 passed in I.A. No. 1 of 2023 is modified and the petitioner is permitted to export 18, 900 Mts. of non-basmati Indian White Rice with HS Code 1006 30 80 in discharge of the contractual obligation under concluded contracts. Accordingly I.A. No. 2 of 2023 is allowed. Therefore in view of the modification done to the interim relief granted vide orders dated 19.10.2023 passed in I.A. No. 1 of 2023 and since the petitioner has not pressed part of the relief sought in the writ petition the writ petition is closed.

Summary

Issues Involved:
The judgment involves the legality of a notification banning the export of non-basmati white rice with immediate effect, the clarification issued, and the subsequent actions preventing the export of rice under existing contracts. The key issues include the arbitrary nature of the ban, violation of natural justice principles, and infringement of fundamental rights guaranteed under the Constitution of India.

Details of the Judgment:

Issue 1 - Legality of Notification Banning Export:
The court granted interim relief directing the respondents to permit the petitioner to export non-basmati white rice stored before the ban date, subject to payment of export duty. The petitioner subsequently filed a modification plea to export rice under specific contracts entered before the ban date, emphasizing the contractual obligations and Letters of Credit issued. The court acknowledged the oversight in the previous order and amended it to allow the export of 18,900 Mts. of non-basmati Indian White Rice in compliance with the concluded contracts.

Issue 2 - Arguments of the Parties:
The petitioner's counsel argued that the retrospective ban on rice export was illegal, illogical, and would result in significant financial losses. In contrast, the Central Government Counsel contended that the notification's restrictions were reasonable and necessary for the welfare of citizens, asserting the government's sovereign powers to impose such measures. The petitioner sought to export rice to fulfill contractual obligations, challenging the restrictions imposed by the notification.

Issue 3 - Modification of Interim Relief:
The court recognized the existence of concluded contracts before the ban and noted that the notification hindered the petitioner from fulfilling these obligations. While the initial interim direction allowed partial export of stored rice, the court emphasized that retrospective restrictions impeding traders from honoring contracts were impermissible. Consequently, the court modified the interim order to permit the export of 18,900 Mts. of non-basmati Indian White Rice under the specific contracts, considering the peculiar circumstances of the case.

Conclusion:
As a result of the modification to the interim relief and the petitioner's decision not to pursue the challenge to the notification's constitutional validity, the writ petition was closed. With no remaining relief for adjudication, the court ordered the closure of the petition without any costs. Any pending miscellaneous petitions were also closed, and any interim orders were vacated as a sequel to the main judgment.