2008 (7) TMI 388 - HC - Customs

Discrimination - Ban on export of maize - Violation of Article 14 - fundamental right - Foreign Trade Policy (FTP) - Notification of the Government dated 5-7-2008 is self-explanatory, which makes it clear and distinguishable to that of the petitioner s case. The petitioner cannot say that he is an exporter and the other three exporters who have been given permission were also exporters and therefore, all of them should be treated equal. The equality concept which is applicable as far as policy making in this case depends upon the factual situation which can be comparable to taxable event in taxing law - In the present case, it is only when the goods pass on to the Customs Authority under its custody, the question of completion of the export will arise and in cases where the permission has been granted in respect of the three other exporters, they are distinct and they have crossed the first stage and in some cases the second stage has also been crossed where Let Export Order has been issued and the goods are awaiting for shipment. - writ petition dismissed.

Issues Involved:
1. Prohibition on Export of Maize.
2. Discrimination and Violation of Articles 14 and 19(1)(g) of the Constitution of India.
3. Judicial Review of Government Policy.
4. Applicability of Legitimate Expectation and Promissory Estoppel.
5. Procedural Compliance by Exporters.

Issue-wise Detailed Analysis:

1. Prohibition on Export of Maize:
The petitioner's partnership firm, engaged in the export of commodities like Salt and Maize since 1993, entered into contracts for exporting Maize based on the existing Foreign Trade Policy, which allowed free export of Maize. However, a Notification issued on 03-07-2008 by the first respondent prohibited the export of Maize with immediate effect. The petitioner argued that the change in policy affected their right under Article 19(1)(g) of the Constitution of India, as it imposed unreasonable restrictions on their trade.

2. Discrimination and Violation of Articles 14 and 19(1)(g) of the Constitution of India:
The petitioner alleged that the first respondent allowed export of Maize from Kakinada, Jam Nagar, and Kandla Ports for some exporters, despite the prohibition. This selective permission was claimed to be discriminatory and violative of Articles 14 and 21 of the Constitution of India. The petitioner contended that they were similarly situated to those exporters and should have been granted the same permission.

3. Judicial Review of Government Policy:
The respondents argued that the Government's policy decisions, especially those related to Foreign Trade, are made considering public interest and are not subject to judicial review. The Government's authority to frame and change policies under the Foreign Trade (Development and Regulation) Act, 1992, was emphasized. The respondents cited various judgments to support the view that policy decisions, especially those concerning economic and trade matters, are within the executive domain and not subject to judicial scrutiny.

4. Applicability of Legitimate Expectation and Promissory Estoppel:
The petitioner's counsel argued that the principle of legitimate expectation should apply, as the shipping bills were submitted before the prohibition notification. However, the respondents contended that there is no legitimate expectation in commercial fields regarding policy applicability. The Supreme Court's judgment in P.T.R. Export (Madras) Pvt. Ltd. v. Union of India was cited, which clarified that policy changes in public interest are permissible and do not attract the doctrine of legitimate expectation.

5. Procedural Compliance by Exporters:
The petitioner had not completed the necessary procedural steps for export, such as obtaining the "Let Export Order" from the Customs Authority. The third respondent, Customs Department, stated that the petitioner's cargo was not presented for Customs Examination before the prohibition. In contrast, the exporters from Kakinada, Jam Nagar, and Kandla Ports had either obtained the "Let Export Order" or were at an advanced stage of the export process. The court concluded that the petitioner's case was at a preliminary stage, and thus, they could not claim equality with the other exporters who had partially completed the export process.

Conclusion:
The court found no merit in the petitioner's claims of discrimination and violation of constitutional rights. The prohibition on export of Maize was a policy decision made in public interest, and the petitioner had not completed the necessary procedural steps to be considered similarly situated to the other exporters. The writ petitions were dismissed, and the court upheld the validity of the Government's policy notification and the selective permissions granted to certain exporters.

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