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2006 (11) TMI 10 - SC - CustomsEXIM Foreign Trade Export should be restricted due to Govt regulation passed during that period with prospective effect By reason of a policy, a vested or accrued right cannot be taken away Gujrat High Court allow the loading of the goods Delhi High Court declared the notification dated 4.7.2006 as ultra vires
Issues Involved:
1. Validity and applicability of the Central Government's notification banning the export of pulses. 2. Interpretation of the terms 'restriction' and 'regulation' in the context of the Foreign Trade Policy. 3. Compliance with statutory provisions under the Customs Act, 1962. 4. Retrospective effect of policy amendments and notifications. Detailed Analysis: 1. Validity and Applicability of the Notification Banning Export of Pulses: The Central Government issued a notification banning the export of pulses on 27-6-2006, under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (the 1992 Act). This decision was widely reported in the media on 22-6-2006. The notification prohibited the export of various goods for six months from the date of issuance. The Superintendent (Customs) directed that no further consignment be shipped after 28-6-2006, and the Assistant Traffic Manager informed that goods cleared by Let Export Orders should not be loaded on shipping vessels. Another notification on 4-7-2006 allowed export against irrevocable letters of credit opened before 22-6-2006. 2. Interpretation of 'Restriction' and 'Regulation': The key question was whether the terms 'restriction' and 'regulation' in Clause 1.5 of the Foreign Trade Policy included prohibition. The Court noted that a citizen has a fundamental right to carry out export business, subject to reasonable restrictions imposed by law. The 1992 Act allows the Central Government to prohibit, restrict, or regulate exports. The terms 'restriction' and 'regulation' vary in degree, with 'regulate' meaning to control or adjust by rule and 'prohibit' meaning to forbid by authority. 3. Compliance with Statutory Provisions under the Customs Act, 1962: The Customs Act, 1962 (the 1962 Act) empowers the Central Government to prohibit importation and exportation of goods. Section 16 provides the date for determining the rate of duty and tariff valuation of export goods, while Section 51 provides for the clearance of goods for exportation. The proper officer must be satisfied that the goods are not prohibited and that the exporter has paid the duty before permitting clearance and loading. The Court held that the procedures laid down for export must be complied with once permission is granted by the proper officer. 4. Retrospective Effect of Policy Amendments and Notifications: The Court examined whether the amendments to the Foreign Trade Policy and the notification dated 4-7-2006 had a retrospective effect. It was argued that the amendments should only have a prospective effect and not take away vested or accrued rights. The Delhi High Court declared the notification dated 4-7-2006 as ultra vires, stating that a policy or its amendment cannot take away vested rights by retrospective application. High Court Judgments: The Gujarat High Court allowed the writ petition by invoking Paragraph 9.12 of the Handbook, stating that the respondents were entitled to export the goods despite the notification dated 27-6-2006. The Delhi High Court declared the notification dated 4-7-2006 as ultra vires. Submissions: The Additional Solicitor General contended that Clause 1.5 of the Foreign Trade Policy would not apply to a total prohibition of export and that the procedures under Sections 16 and 39 of the 1962 Act must be complied with. The respondents argued that the amendments should not have a retrospective effect and that the Handbook of Procedures supplements the Foreign Trade Policy. Conclusion: The Court upheld the judgment of the Gujarat High Court, allowing the export of goods cleared by customs before the notification. However, it set aside the judgment of the Delhi High Court, stating that the notification dated 4-7-2006 could not be considered based on media publicity. The Court emphasized that policy amendments should not have a retrospective effect and must protect vested rights. The appeal in the case of M/s. Asian Food Industries was dismissed with costs, while the appeal in the case of M/s. Agri Trade India Services P. Ltd. was allowed, with parties bearing their own costs.
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