2017 (8) TMI 504 - HC - Customs

Import of restricted item - Boric acid used for non-insecticidal purposes - restrictions brought about on import of Boric acid by Agriculture Ministry via notification dated 7.4.2006 amending the import policy by amending the Schedule - case of petitioner is that it is not within the power of the Government of India to impose such restriction - whether the Ministry of Agriculture has power to bring such restrictions on import of Boric Acid for non-insecticidal purposes? - Held that - Section 27 gives powers to the Central Government or the State Government to impose immediate ban on sale, distribution or use of the insecticide or batch of it, where in the opinion of the Government use thereof is likely to involve such human risk or risk to animals as to render it expedient or necessary to impose such immediate ban pending such investigation. Offences have been prescribed under section 29 of the Act. Special Courts could be set up for speedy disposal of such cases - the legislation framed section 38 providing for exemptions. Under subsection( 1) nothing in the Act would apply to the use of any insecticide by any person for his own household purposes or for kitchen garden or in respect of any land under his cultivation. Under clause(b) nothing in the Act would apply to any substance specified or included in the Schedule or any preparation containing any one or more of them, if such substance or preparation is intended for purposes other than preventing, destroying, repelling or mitigating any insects, rodents, fungi, weeds and other forms of plant or animal life not useful to human beings. Under subsection( 2) of section 38, the Central Government is authorised to issue notification exempting all or any of the provisions of this Act in case of educational, scientific or research organization engaged in carrying out experiments with insecticides. Subsection( 1) of section 38 which is a general exemption is divided in two parts. Under clause(a), insecticides for household and kitchen purposes etc. are kept out of the purview of the Act. Under clause(b), insecticides intended for the purposes other than agricultural and incidental purposes are exempted such as preventing, destroying, repelling or mitigating any insects, rodents, fungi, weeds and other forms of plant or animal life not useful to human beings. Clause(b) of subsection( 1) exempts the use of insecticides for non insecticidal purposes from the purview of the Act. Subsection (2) of section 38 gives powers to the Central Government to grant exemption for use of insecticides for educational, scientific or research purposes. The Central Insecticide Board and Registration Committee under the Ministry of Agriculture is only assigned the task of processing applications by the prospective importers for granting the import permit. There is nothing either unreasonable in this Act or impermissible in the statute for the Government of India so to do. Under the Act of 1992, the Government of India has ample powers to regulate the import policy. While doing so, it is either open for the Government of India to prohibit or restrict import of a certain item or subject it to regulatory measures. In the present case, Government of India was of the opinion that looking to the toxic nature of the substance, it was necessary to regulate its import. It may be that such regulation is provided for import of the substance for non insecticidal purposes. However, the philosophy behind such regulatory measure cannot be faulted - the Insecticides Act, 1968 makes detailed provisions for regulation and control of any insecticides including boric acid for the purposes of insecticidal uses. Its manufacture, trade, storage etc, can be subject to control and supervision. Section 38 of the Act when exempts all uses of insecticides for non insecticidal purposes from the provisions of the Act, would still leave the residual power in the Ministry of Agriculture to ensure that use of the substance is actually being made for non insecticidal purposes and not for insecticidal purposes. The impugned notification issued by the Government of India does not lack the authority nor specifications of Central Insecticide Board and Registration Committee under the Ministry of Agriculture as the permitting authority, is impermissible under the law. The petitioners as well as the private respondents i.e. the local manufacturers of boric acid have presented different data of import permission sought and granted. These figures show a huge cleavage. The data produced by the petitioners would suggest permission was granted for a small proportion of the quantity demanded by the importer. Whereas the data produced by the respondents would suggest, much of the demand was met. Such data picked for a small period without anything further cannot establish mala fides nor lack of it. In any case, policy formation through subordinate legislation is entirely different from its implementation. The former may be perfectly valid whereas the later may be defective. Petition dismissed - decided against petitioner.

Summary

Issues Involved:
1. Validity of the notification dated 7.4.2006 regulating the import of boric acid for non-insecticidal purposes.
2. Authority of the Ministry of Agriculture to regulate imports under the Insecticides Act, 1968.
3. Allegations of mala fide intent behind the notification.
4. Reasonableness and arbitrariness of the notification.
5. Judicial review of policy decisions and subordinate legislation.

Detailed Analysis:

1. Validity of the Notification Dated 7.4.2006:
The petitioners challenged the notification dated 7.4.2006, which amended the import policy to require an import permit for boric acid for non-insecticidal purposes issued by the Central Insecticide Board and Registration Committee under the Ministry of Agriculture. The notification was issued under the Foreign Trade (Development and Regulation) Act, 1992, which grants the Central Government the power to regulate imports and exports through policy measures.

2. Authority of the Ministry of Agriculture:
The petitioners argued that it was not within the purview of the Ministry of Agriculture to regulate the import of boric acid for non-insecticidal purposes under the Insecticides Act, 1968. However, the court clarified that the regulation was imposed under the Foreign Trade (Development and Regulation) Act, 1992, and not the Insecticides Act. The Ministry of Agriculture was merely assigned the task of processing import permits.

3. Allegations of Mala Fide Intent:
The petitioners alleged that the notification was issued to benefit local manufacturers of boric acid, making the decision mala fide. The court found no evidence of mala fide intent, noting that the government is open to representations from various quarters, and the policy was consistent with similar regulations imposed since 1991.

4. Reasonableness and Arbitrariness of the Notification:
The petitioners contended that the notification was arbitrary and unreasonable, arguing that more toxic substances were allowed to be imported freely. The court held that the regulation was reasonable given the toxic nature of boric acid and the potential risks associated with its misuse. The court emphasized that judicial review of policy decisions is limited and that the government has the necessary expertise to make such decisions.

5. Judicial Review of Policy Decisions and Subordinate Legislation:
The court reiterated that subordinate legislation carries a presumption of constitutionality and that policy decisions of the government are subject to limited judicial review. The court cited precedents to support the view that policy decisions should not be easily overturned unless they are manifestly unjust, oppressive, or unreasonable.

Conclusion:
The court dismissed the petition, upholding the validity of the notification dated 7.4.2006. The court found that the regulation was within the authority of the government under the Foreign Trade (Development and Regulation) Act, 1992, and was neither arbitrary nor unreasonable. The allegations of mala fide intent were not substantiated, and the court emphasized the limited scope of judicial review in policy matters.