2000 (1) TMI 65 - HC - Customs

Summary

Issues Involved:
1. Validity of Public Notice No. 38/(PN) 1997-2002 dated 1st September 1997.
2. Discrimination and arbitrary classification under the Public Notice.
3. Extension and revalidation of Advance Licences.
4. Jurisdiction and power of the court under Article 226 of the Constitution of India.

Detailed Analysis:

1. Validity of Public Notice No. 38/(PN) 1997-2002 dated 1st September 1997:
The appellant questioned the validity of the Public Notice, particularly Clause (vi), which prohibited revalidation of licences where endorsement of transferability had been effected by the licensing authority. The court held that the policy decision by the Central Government was not arbitrary or fanciful. The policy aimed to grant exemptions only to actual users and not to those who transferred licences for a premium. The court emphasized that the Advance Licence was valid until 31-12-1997, and no further revalidation could be directed by the court.

2. Discrimination and Arbitrary Classification under the Public Notice:
The appellant argued that the Public Notice resulted in hostile discrimination by making a two-fold classification of licence holders. The court found that the classification was based on an intelligible differentia and had a rational nexus with the object of encouraging exports. The classification was between licence holders who fulfilled their export obligation and those who did not. The court rejected the contention of discrimination, stating that all licence holders who fulfilled their export obligation were treated alike.

3. Extension and Revalidation of Advance Licences:
The court noted that the EXIM Policy allowed licence holders who fulfilled their export obligation to transfer licences for the balance period of validity or six months from the date of endorsement, whichever was more. The Public Notice dated 1st September 1997 granted an extension only to licence holders who had not completed their export obligation. The court highlighted that the object of the policy was to encourage exports by extending the time for those who had not completed their export obligation.

4. Jurisdiction and Power of the Court under Article 226 of the Constitution of India:
The court held that it could not direct the grant of any relaxation or exemption, which is primarily the statutory function of the appropriate authority under Section 25(1) of the Customs Act. The court emphasized that it had no power to override mandatory provisions of law based on sympathetic considerations. The court referred to the Supreme Court's ruling in State of M.P. v. Dharambir, which stated that the power to relax rules vests exclusively in the Governor and cannot be usurped by the court.

Conclusion:
The appeal was dismissed, and the court upheld the validity of the Public Notice No. 38/(PN) 1997-2002 dated 1st September 1997. The court found no merit in the appellant's contention of discrimination and held that the classification under the Public Notice was rational and aimed at encouraging exports. The court also reiterated its limited jurisdiction under Article 226, stating that it could not grant exemptions or relaxations that were within the statutory powers of the Central Government.