2019 (6) TMI 692 - HC - Customs

Restriction on import of yellow peas - section 3 of the Foreign Trade Act read with the Foreign Trade Policy - relevant date for import - HELD THAT - It is manifest that the respondent authorities have taken due care in terms of paragraph 1.05 of the Handbook of Procedure. Under the circumstances, it cannot be said that the impugned notifications suffer from any legal infirmity so as to warrant interference. This court had called upon the respondents to explain this position, whereupon the Development Commissioner, AP and SEZ, Mundra has filed an affidavit regarding import of yellow peas in the interregnum period when the notification of withdrawal of the ban on import was issued on 29.8.2018 till 30.8.2018 when the restriction on import was again imposed. A perusal of the Bills of Entry reveals that they were presented between 7 20 pm to 8 05 pm and at a later period than that. From the details furnished by the learned counsel for the Central Government, there is nothing to show that as to at what time the letter dated 29.8.2018 was received by the Government of India Press for the purpose of publishing the same in the Official Gazette. Be that as it may, the respondents have come up with a plausible explanation insofar as the manner in which the Bills of Entry in case of two parties were cleared within the short window between the time of withdrawal of the restriction and reimposition thereof. Besides, just like the petitioner came to know about the notification withdrawing the restriction and placed import orders immediately, the said parties upon coming to know of such withdrawal appear to have acted immediately to take advantage of the same. Therefore, no further inquiry is required to be made in this regard by this court. In the opinion of this Court, in light of what is discussed hereinabove, the contention of the petitioner that he had entered into contract on the date when the restriction came to be removed and, therefore, he is entitled to import of such goods, does not merit acceptance. The relevant date for the purpose of import of peas as described in the impugned notifications is the date of import and the date on which the contract has been entered into by the petitioner is not relevant for the present purpose - in the light of the clear language of the notification dated 29.8.2018 withdrawing the notification dated 2.7.2018, the petitioner in the second petition had no reason to believe that import of peas would be free thereafter and that there would be no restriction thereon. Petition dismissed.

Issues Involved:
1. Validity of Notification No. 32/2015-2020 dated 30th August 2018 and Notification dated 28th December 2018 restricting the import of peas.
2. Whether the notifications were retrospective and affected vested rights of the petitioners.
3. Whether the notifications violated the principle of legitimate expectation and promissory estoppel.
4. Whether the notifications were arbitrary and lacked rationale.
5. Scope of judicial review in policy decisions related to import restrictions.

Detailed Analysis:

1. Validity of Notification No. 32/2015-2020 dated 30th August 2018 and Notification dated 28th December 2018:
The petitioners challenged the notifications restricting the import of peas under Exim Code 0713 10 00. The court observed that the notifications were issued by the Central Government in exercise of powers under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, and were part of a policy decision to balance interests of domestic producers and importers. The court noted that the restrictions were imposed to protect local farmers from the adverse impact of large-scale imports on domestic prices. The court held that the notifications were valid and within the powers of the Central Government.

2. Retrospective Effect and Vested Rights:
The petitioners argued that the notifications affected their vested rights as they had entered into contracts before the restrictions were imposed. The court clarified that policy decisions cannot be formed based on prior contracts and that no person has a vested right to import any goods. The court found that the notifications were not retrospective as they imposed restrictions from the date of issuance and did not affect past transactions. The court also noted that the government had taken steps to address the grievances of traders who had made advance payments before the restrictions.

3. Principle of Legitimate Expectation and Promissory Estoppel:
The petitioners contended that the notifications violated the principle of legitimate expectation and promissory estoppel. The court rejected this argument, stating that the withdrawal of the earlier notification was to comply with a technical defect pointed out by the Madras High Court and did not constitute a promise that import of peas would be free henceforth. The court emphasized that the government’s policy decisions were aimed at protecting public interest and were not arbitrary or whimsical.

4. Arbitrariness and Lack of Rationale:
The petitioners claimed that the re-imposition of restrictions was arbitrary and lacked rationale. The court found that the restrictions were imposed after due deliberation among various government departments and were aimed at protecting the interests of domestic farmers. The court held that the policy decision was not arbitrary or irrational and was made in public interest.

5. Scope of Judicial Review:
The court reiterated that judicial review of policy decisions, especially in economic matters, is limited. The court stated that it would not interfere with policy decisions unless they were arbitrary, irrational, or not in public interest. The court cited precedents to emphasize that policy decisions must be respected if they are backed by cogent material and are within the parameters of Article 14 of the Constitution. The court concluded that the impugned notifications were valid policy decisions and did not warrant interference.

Conclusion:
The petitions challenging the notifications restricting the import of peas were dismissed. The court upheld the validity of the notifications, stating that they were part of a policy decision aimed at protecting domestic farmers and were not arbitrary or retrospective. The court also emphasized the limited scope of judicial review in policy decisions related to economic matters.

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