1988 (9) TMI 61 - HC - Customs

Summary

Issues Involved:
1. Legality of Para 183 of Chapter XV of the Import Policy for Registered Exporters for 1988-91.
2. Alleged violation of Articles 14, 19(1)(g), and 21 of the Constitution of India.
3. Free transferability of REP licences and its impact on indigenous industry.
4. Discrimination against the Petitioner-Association.
5. Judicial review of economic policy decisions.

Detailed Analysis:

1. Legality of Para 183 of Chapter XV of the Import Policy for Registered Exporters for 1988-91:
The Petitioner-Association challenges the legality of Para 183 of Chapter XV of the Import Policy for Registered Exporters for 1988-91, arguing that it is illegal, arbitrary, and violates constitutional rights. Para 183 allows REP licences to be issued in the name of Registered Exporters and transferred to any other person, without being subject to 'Actual User' conditions. The Petitioner-Association contends that this free transferability should be restricted to actual users to prevent misuse by non-manufacturers.

2. Alleged Violation of Articles 14, 19(1)(g), and 21 of the Constitution of India:
The Petitioner-Association claims that Para 183 violates Articles 14 (right to equality), 19(1)(g) (right to practice any profession or to carry on any occupation, trade, or business), and 21 (right to life and personal liberty) of the Constitution. They argue that the policy discriminates against indigenous manufacturers of zip fasteners by allowing non-manufacturers to import and trade zip fasteners, thereby threatening the indigenous industry.

3. Free Transferability of REP Licences and Its Impact on Indigenous Industry:
The Petitioner-Association asserts that the free transferability of REP licences under Para 183 allows non-manufacturers to import zip fasteners, which undermines the indigenous industry. They argue that zip fasteners are a restricted item under Appendix 2 Part-B and should only be imported under 'actual user' conditions. The counter-affidavit by the respondents states that free transferability ensures easy availability of essential imported inputs to exporters and promotes exports, which is a cornerstone of the Import and Export Policy 1988-91.

4. Discrimination Against the Petitioner-Association:
The Petitioner-Association argues that the policy discriminates against them by allowing non-manufacturers to import zip fasteners, thus putting them at a disadvantage. However, the court finds that the Petitioner-Association can also secure REP licences and import zip fasteners, as they are freely available in the market. Therefore, there is no discrimination or inequality before the law.

5. Judicial Review of Economic Policy Decisions:
The court emphasizes that while it can review economic policy decisions, it should exercise judicial restraint. The Import and Export Policy 1988-91, including the free transferability of REP licences, has been carefully formulated by the Government of India to promote exports. The court concludes that the policy does not suffer from any illegality or arbitrariness that would infringe upon the fundamental rights of the Petitioner-Association.

Conclusion:
The court dismisses the writ petition, stating that the free transferability of REP licences under Para 183 of the Import and Export Policy 1988-91 is legal and does not violate Articles 14, 19(1)(g), and 21 of the Constitution. The policy aims to promote exports and does not pose a threat to the indigenous industry. The Petitioner-Association is not discriminated against, as they can also participate in the import of zip fasteners. The court exercises judicial restraint in reviewing the economic policy, recognizing the expertise and careful consideration involved in its formulation. The writ petition is dismissed with no order as to costs.