2025 (1) TMI 690 - HC - Customs

Mid-term review and revision of the Bullion Tariff Rate Quota (TRQ) allocations under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) for the Financial Year 2024-25 - decision was taken without granting an opportunity of hearing to the petitioner and without a sufficient prior notice - violation of principles of natural justice - HELD THAT - This Court had issued directions and other connected matters in KAKA GOLD LLP VERSUS DIRECTOR GENERAL OF FOREIGN TRADE ORS. 2024 (12) TMI 544 - DELHI HIGH COURT , which arose in a similar factual matrix and where it was held that ' since the review decision was made without affording the Petitioners an opportunity to be heard, and Ms. Shiva Lakshmi has also indicated that the Petitioners should have first approached the DGFT with their concerns, the Court is of the opinion that it would be more appropriate at this stage, without delving deep into the merits of the case, to direct the DGFT to examine all the issues raised by the Petitioners in the present petitions and issue a fresh decision on the basis thereof.' The petitioners are directed to file an application for review before the DGFT within one week from today whereupon the DGFT shall examine all the issues raised by the petitioners in the present petitions and issue fresh orders/directions, within a period of three weeks thereafter. Conclusion - i) The DGFT is directed to re-examine the issues raised by the petitioners and issue fresh decisions, maintaining current allocations during the review process. ii) The petitioners must be provided with an opportunity to be heard, and the criteria for TRQ revisions must be clearly communicated.

2024 (12) TMI 544 - HC

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

Whether the mid-term review and revision of the Bullion Tariff Rate Quota (TRQ) allocations under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) for the Financial Year 2024-25 were conducted lawfully.
Whether the petitioners were denied due process, specifically the right to a hearing and adequate notice, before the revision of their TRQ allocations.
Whether the criteria for revising TRQ allocations were validly established and communicated to the petitioners.
Whether the actions of the respondents in revising the TRQ allocations were within their jurisdiction and authority under the relevant legal framework.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Lawfulness of Mid-term Review and Revision of TRQ Allocations

Relevant legal framework and precedents: The revision of TRQ allocations is governed by the Foreign Trade (Development & Regulation) Act, 1992, and the Foreign Trade (Regulation) Rules, 1993. The Handbook of Procedures, 2023, also provides guidance on such matters.
Court's interpretation and reasoning: The court noted that the mid-term review was anticipated by the respondents as per the minutes of the meeting held on 15.04.2024. However, the criteria for such review were not specified, leading to a lack of transparency.
Key evidence and findings: The minutes of the meeting dated 08.11.2024 were crucial, as they outlined the revised allocation criteria based on TRQ utilization records.
Application of law to facts: The court found that the review process lacked clarity and proper communication, which could render the revision arbitrary.
Treatment of competing arguments: The petitioners argued that the revision was arbitrary and without due process, while the respondents claimed it was necessary to ensure TRQ compliance.
Conclusions: The court directed the Directorate General of Foreign Trade (DGFT) to re-examine the issues raised by the petitioners and issue fresh decisions.

Issue 2: Denial of Due Process

Relevant legal framework and precedents: Principles of natural justice require that affected parties be given an opportunity to be heard before adverse decisions are made.
Court's interpretation and reasoning: The court observed that the petitioners were not given prior notice or a hearing before the TRQ allocations were revised, which was a procedural lapse.
Key evidence and findings: The absence of prior notice and the lack of a hearing were significant procedural deficiencies.
Application of law to facts: The court found merit in the petitioners' claim of denial of due process.
Treatment of competing arguments: The respondents contended that the review was necessary for compliance, while the petitioners emphasized the lack of opportunity to present their case.
Conclusions: The court directed the DGFT to provide the petitioners with an opportunity to be heard in the review process.

Issue 3: Validity and Communication of Criteria for TRQ Revision

Relevant legal framework and precedents: The criteria for revising TRQ allocations should be clearly established and communicated to stakeholders.
Court's interpretation and reasoning: The court noted that the criteria for TRQ revision were not communicated to the petitioners, leading to uncertainty and confusion.
Key evidence and findings: The lack of a public notice or communication regarding the criteria for FY 2024-25 was critical.
Application of law to facts: The court found that the absence of communicated criteria undermined the validity of the revision process.
Treatment of competing arguments: The petitioners argued that they were unaware of the criteria, while the respondents did not provide evidence of communication.
Conclusions: The court directed the DGFT to clarify and communicate the criteria for TRQ allocations in future reviews.

Issue 4: Jurisdiction and Authority for TRQ Revision

Relevant legal framework and precedents: The authority to revise TRQ allocations is derived from the Foreign Trade laws and related procedures.
Court's interpretation and reasoning: The court questioned whether the respondents exceeded their authority by revising TRQs without proper legal basis.
Key evidence and findings: The lack of jurisdictional clarity in the minutes of meetings was a concern.
Application of law to facts: The court found that the respondents may have acted beyond their jurisdiction in revising TRQs.
Treatment of competing arguments: The petitioners claimed excess of authority, while the respondents maintained their actions were justified.
Conclusions: The court directed a re-evaluation of the jurisdictional basis for TRQ revisions by the DGFT.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning:

"In the opinion of the Court, there is significant merit in the contentions raised by the Petitioners. While Paragraph No. 7 of the Minutes of Meeting dated 15th April, 2024 does indicate that a review exercise would be conducted based on the imports up to September 2024, however, as correctly pointed out by Mr. Gulati, this review can be deemed a 'blind' review, given that no criteria were specified in the said Minutes with respect to the potential allocation."

Core principles established:

The necessity of clear communication and transparency in the criteria for TRQ allocation and revision.
The importance of adhering to principles of natural justice by providing affected parties an opportunity to be heard.
The requirement for jurisdictional clarity and adherence to the legal framework in administrative decisions.

Final determinations on each issue:

The DGFT is directed to re-examine the issues raised by the petitioners and issue fresh decisions, maintaining current allocations during the review process.
The petitioners must be provided with an opportunity to be heard, and the criteria for TRQ revisions must be clearly communicated.
The respondents must ensure their actions are within their jurisdiction and authority, as per the relevant legal framework.

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