2019 (1) TMI 337 - HC - Customs

Jurisdiction - authority of Director General of Foreign Trade (DGFT) to exercise powers u/s 3 of the Act - converting certain items from free to restricted - delegation of power - sub-section (3) of section 6 of the Act - Validity of N/N. 19/2015-2020 dated 5.8.2017 - direction to the respondents to allow the petitioners to import the goods in terms of the contract at Annexure-A to the respective petitions - Restricted item or not - Held that - A perusal of the impugned notification reveals that the same has been issued by the Government of India, Ministry of Commerce and Industries, Department of Commerce, Directorate General of Foreign Trade. Thus, by the impugned notification the amendment made by the Central Government in the import policy in exercise of powers under section 3 of the Act has been notified which relates to the Directorate General of Foreign Trade, accordingly, the same is authenticated by the Director General of Foreign Trade. Therefore, it is crystal clear that the DGFT has not exercised powers under section 3 of the Act but has merely authenticated an order which relates to the Directorate General of Foreign Trade in accordance with the Authentication Rules. The Authentication Rules do not envisage the authentication of only administrative orders but of all executive orders of the Government of India. The contention that the authentication by the DGFT can be only in respect of administrative orders, is, therefore, not in consonance with the provisions of clause (2) of article 77 of the Constitution. Laying of the notifications before the Parliament - Held that - On a plain reading of sub-section (3) of section 19 of the Act, it is evident that the requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order. In other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament. Apart from a bare assertion, there is nothing to show that the provisions of sub-section (3) of section 19 of the Act have not been satisfied, even otherwise, the contention based upon non-compliance with the provisions of sub-section (3) of section 19 of the Act deserves to be rejected. The challenge to the validity of the impugned notifications, fails - petition dismissed.

Summary

Issues Involved:
1. Validity of Notification No.19/2015-2020 dated 5.8.2017 and other related notifications.
2. Authority of the Director General of Foreign Trade (DGFT) to issue notifications under section 3 of the Foreign Trade (Development and Regulation) Act, 1992.
3. Compliance with section 19(3) of the Foreign Trade (Development and Regulation) Act, 1992 regarding the laying of orders before Parliament.

Detailed Analysis:

1. Validity of Notification No.19/2015-2020 dated 5.8.2017 and other related notifications:
The petitioners challenged the notifications on the grounds that they were issued by the DGFT, who allegedly lacked the authority to do so under section 3 of the Foreign Trade (Development and Regulation) Act, 1992. They argued that the sudden change in the import policy caused significant financial losses and operational disruptions. The respondents countered that the notifications were issued by the Central Government and merely authenticated by the DGFT, in accordance with the Authentication (Orders and Other Instruments) Rules, 2002.

2. Authority of the DGFT to issue notifications under section 3 of the Foreign Trade (Development and Regulation) Act, 1992:
The petitioners contended that under section 6(3) of the Act, the powers under sections 3, 5, 15, 16, and 19 could not be delegated to the DGFT. They cited the Supreme Court's decision in Director General of Foreign Trade v. Kanak Exports, which held that such powers must be exercised by the Central Government. The respondents argued that the DGFT only authenticated the notifications, which were issued by the Central Government. The court agreed with the respondents, noting that the notifications were indeed issued by the Central Government and merely authenticated by the DGFT as per the Authentication Rules.

3. Compliance with section 19(3) of the Foreign Trade (Development and Regulation) Act, 1992 regarding the laying of orders before Parliament:
The petitioners argued that the requirements of section 19(3) were not met, as the notifications were not laid before both Houses of Parliament. The court, referencing the Indian Evidence Act and the Supreme Court's decision in Atlas Cycle Industries Ltd. v. State of Haryana, concluded that the requirement to lay orders before Parliament is directory, not mandatory. The court presumed that official acts are regularly performed unless proven otherwise.

Conclusion:
The court dismissed the petitions, holding that the impugned notifications were validly issued by the Central Government and merely authenticated by the DGFT. The court found no merit in the petitioners' arguments regarding the delegation of powers and compliance with section 19(3) of the Act. The notifications were upheld, and the petitions were dismissed with no order as to costs.