9911796707
TMI Blog1989 (10) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... posed. The Petitioner is carrying on the business of importing rough diamonds and exporting out and polished diamonds in this metropolis. He is duly registered with the Directorate of Small Scale Industries and, according to him, he has lot of experience to his credit in this field. He has also now started manufacturing of engineering products which is in addition to his earlier vocation. The 1st Respondent is the Deputy Chief Controller of Imports and Exports while the 2nd Respondent is the Chief Controller of Imports and Exports and the 3rd being the Union of India and they have a statutory obligation in the matter of renewal of certificate which are initially granted for Export House under the Imports and Exports (Control) Act, 1947 read with Import Control Rules, 1955. 3. The Petitioner has been holding a valid certificate for such an Export House since 1979 and which was to expire on 30-6-1982. It is for the purpose of renewal of such certificate that he applied to the said two Respondents on 26-5-1982 which was obviously under the Import and Export Policy for the year 1982-83 and that Policy is more germane to this proceeding. He was entitled to be placed in two categories, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the firm has already started manufacturing activity the Directorate of Industries, Gujarat State has granted the provisional certificate on 29-3-1982 though the permanent certificate was issued thereafter and granting of provisional certificate was good enough for the purpose of renewal. As regards the third query, it was submitted that during the period 1980-81 there was only one export of auto accessories to Singapore and the details of f.o.b. manufactured by Small Scale Industry was given. During the next year there was also one consignment of auto accessories and silk fabrics and the Petitioner under this letter declared that the said two consignments of auto accessories and one of silk fabrics have been manufactured by SSI and they have not been allotted SSI registration number by the Directorate of Industries. He then gave in respect of the items the manufacturers names and addresses. As regards the fourth query, he made it clear that the statements of the export for the year 1976 to 1979 duly certified by the Chartered Accountant have already been submitted. However, as a precaution a fresh copy was enclosed for ready reference. 5. It was ultimately requested that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescription under this Policy in paragraph 180(2). 8. As regards the first point is concerned, it can be disposed of within no time as it furnished hardly any difficulty. The Export House Certificate was initially granted in the year 1979 and it was to lapse on 30-6-1982. An application for renewal was made on 26-5-1982. However, it is not controverted that the provisional certificate has been issued in favour of the Petitioner on 29-3-1982 while the permanent certificate has been granted on 7-5-1982. The contention raised by Shri Master is to the fact that as per paragraph 176(b) of the Relevant Policy the certificate should have been issued prior to 1st April 1982, and since the permanent certificate in the instant case is subsequent thereto, i.e. on 7-5-1982 it will not validate the application and it would not wipe out the deficiency and the requirement of paragraph 176(b) of the Relevant Policy. I am afraid that would be putting too narrow construction on such a situation. We have three comparable dates, the first is 29-3-1982 on which provisional certificate is granted, 7-5-1982 when the permanent certificate is granted while the application is admittedly on 26-5-1982 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hree years and logically those three years would proceed the base period and by simple calculation the pre-base period would be comprising of three years, viz. 1976-77,1977-78 and 1978-79. Those two spans of period are thus fixed under the Policy itself. Then is the relevant provision contained in paragraph 176 which relates to application for renewal. The first para is carved out in sub-clause (a) which is not very relevant in the instant case. However, sub-clause (b) is the most relevant portion which reads as : - The prescribed minimum set down above shall be only Rs. 25 lakhs and Rs. 2 crores respectively in the case of small scale unit registered with the concerned State Director of Industries before 1-4-1982 or a consortium of small scale unit. It would thus be apparent that the minimum has been prescribed as Rs. 25 lakhs which would be the criterion in the instant case because it pertains to a small scale unit registered with the concerned State Director of Industries, whereas the second clause of Rs. 2 crores has no relevance in the controversy because admittedly the petitioner s case is not attracted to that clause. The net result, therefore, would be, insofar as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the result as suggested by him and this, according to him, depends on the phraseology used as also the insertion of the coma at a particular time of punctuation. The sum and substances of his argument qua such an interpretation is that two alternatives are provided for to find out the 20% annual average growth. The first alternative relates to the base period itself, viz. between 1979 to 1982. According to him, initially find out the annual average growth for this base period of 3 years inter se and arrive at a particular figure answering such annual average growth which may be styled for the sake of argument as A then correspondingly undergo a similar exercise and find out the average annual growth of the pre-base period, i.e. 3 years prior to 1979 and arrive at a proper figure which may be styled as B . After arriving at these two figures for these two spans of periods of 3 years each, the base period commencing between 1979-82 and pre-base period being between 1976-79, compare the figures arrived at A and B and find out if there is 20% growth rate between these two figures, i.e. in other words, find out if the figure arrived at A qua the base period is the 20% annua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the first alternative is complete by itself. If, however, in a contingency where such 20% growth rate is not possible to be found out as in a case that can be contemplated, then the second alternative will come into effect, but in that process also, according to him, the comparison with the entire base period is not contemplated. What he suggests is that in this alternate mode it is taken into account the figure that is reflected in the proceeding year, viz. 1981-82 which, as stated, is accepted by the Respondents. Thereafter one need not go to entire pre-base period of 3 years, but add one year from the pre-base period, i.e. the last out of the said 3 years from the earlier and join that last year with the two remaining years from the base period and thereby arrive at an average growth which can be styled as C . The figure for 1981-82 is already there which can be styled as X . Compare X with C and if you find that X reflects 20% growth then the alternative is satisfied, In other words, according to him, the first two years of the pre-base period would not be relevant, but only the third year which by addition to the remaining two years of the base period would furnish t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minimum export performance shall be taken as the annual average of the three years of the base period or the exports in the immediately preceding year, provided the applicant does not have nil exports in any of the prescribed three years of the base period. Even a cursory reading of this footnote makes it quite clear reinforcing the contention that is put by Shri Kamdar on sub-clause (2) of paragraph 180. This embraces both the situation, viz. regarding the issuance of the certificate at the inception itself or for the renewal of the certificate also and what is expected is that there should be minimum export performance that is to be taken into account in respect of annual average growth of the 3 years of the base period or the exports in the immediately preceding year. Thus, on the contrary, it negatives the contention raised by Shri Master about any comparison with reference to the pre-base period. What is expected is only about the annual average of the 3 years of the base period and that is precisely what is contemplated by sub-clause (2) of paragraph 180 as rightly submitted by Shri Kamdar. 13. The same situation would arise insofar as the alternative mode is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be made by said coma, would really not so effective but may be even redundant and in any event that will have to be tagged with the second mode relating to the preceding year, viz. 1981-82 and what is of relevance is that insofar as this mode is concerned, the clause is as compared to the preceding 3 years which itself indicates that the only requirement is the composition of 3 years preceding year 1981-82 which would, therefore, be the starting point being 1978-79 which again would not be necessarily the entire span of 3 years from the pre-base period. The user of the words preceding 3 years serves again a pointer in favour of the interpretation, i.e. sought to be put by Shri Kamdar which would be available to the alternative mode when the figure of 1981-82 is to be compared not with the figures for the 3 years from 1976 to 1979, but only with the figures from 1979 to 1981. There is yet another inbuilt pointer in support of this contention inasmuch as in sub-clause (2) itself it is indicated that such a comparison which is available in the record mode is available only if there is no nil export in any of the 3 years of the base period . This, in my opinion, really tilt t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the very first clause, viz. that the comparison inter se of the base period of the 3 years would itself abundantly make it clear that the annual growth rate is on the acceleration being 20%. These figures are mentioned in the Petition and which are acceptable to the Respondents. Thus, for the year 1979-80 the f.o.b. value of exports is Rs. 86,604.76, for 1980-81 it is Rs. 25,12,911.80 and for 1981-82 is Rs. 46,76,388.24. On simple arithmetic calculation it leaves no doubt that inter se comparison between these 3 years it completely satisfies the requirement of the first clause of sub-clause (2) of Paragraph 180 that the annual average growth of at least 20% in the prescribed base period does exist in the instant case. If that be so, then the Petitioner is definitely entitled to the renewal of the Export House Certificate. Incidentally, Shri Kamdar is also justified in submitting that the fallacy is also reflected inasmuch as if the interpretation sought to be made by Shri Master is accepted, then the Petitioner may not be entitled to have even a fresh certificate issued in his favour even though in that event the minimum of Rs. 25 lakhs is satisfied and along with that the av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Master about the maintainability of this petition which objection, in my opinion, is utterly futile. It was submitted that the appeal is maintainable and no appeal has been filed by the Petitioner. However, paragraph 198 of the relevant Policy make the situation quite clear which provides that if a person is dissatisfied with the order rejecting the application for renewal then he has to apply for review of that order within 45 days. In the instant case, after getting the first order in August-1982, the Petitioner did make a representation to the authority obviously for the review of the order and the authority declined to review the order but by the subsequent one confirmed the previous order and, therefore, prescription under paragraph 198 is satisfied, and therefore it can be challenged under Article 226 of the Constitution of India. What is of more relevance is that this it ipso facto eliminates any remedy of appeal, but prescribes the only remedy for review and that remedy has been pursued by the Petitioner and only after it was exhausted that this petition is filed and thus it is maintainable. There is thus no substance in the contention. 19. Rule made absolute in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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