JUDGMENT

RANGANATHAN, J.:- Import Trade Control was introduced in India as a war-time measure in the early stages of the Second World War, initially by a notification issued in exercise of the powers conferred under the Defence of India Rules. The primary object of notification was to conserve foreign the exchange resources and restrict physical orts so as to reduce the pressure on the 1imited available shipping space. To start with, the import of only 68 commodities, mainly consumer items, were brought under control. Subsequently, as foreign exchange resources came under pressure, import control was extended to cover other commodities as well.

2. Soon after the second world war came to an end, the control of imports and exports was statutorily provided for. The Imports and Exports (Control) Act, 1947 (18 of 1947) came into force with efffect from 25th March, 1947, initially for a period of three years and was extended from time to time. The Act was substantially amended by the Imports and Exports (Control) Amendment Act, 1976. Section 3 of the Act is relevant for our present purposes. It reads:

"3. Powers to prohibit or restrict imports and exports - (1) The Central Government may, by order published in the Official Gazette, make provisions for prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the order:-

(a) the import, export carriage coastwise or shipment as ships stores of goods of any specified description;

(b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried

(2) All goods to which any order under subsection (1) applies shall be deemed to be goods of which the import or export has been prohibited under Section 11 of the Customs Act, 1962 (52 of 1962), and all the provisions of that Act shall have effect accordingly.

(3) Notwithstanding anything contained in the aforesaid Act, the Central Government may, by order published in the Official Gazette prohibit, restrict or impose conditions on the clearance whether for home consumption or for shipment abroad of any goods or class of goods imported into India.

3. Several notifications were issued under S.3 of the above Act from time to time setting out the lists of controlled items. At the relevant time with which we are concerned, the notification governing Imports was the Imports (Control) Order, 1955 as amended from time to time and the one governing exports was the Exports (Control) Order, 1988 which came into force on 30th March, 1988. The broad scheme of the Imports Control Order is that the items of goods set out in Schedule 1 to the said order cannot be imported except under a licence or customs clearance permit issued in terms of Schedules 11, 111 and V to the order. Clause 11 (4) of the Order, however, also envisages the issue of an Open General Licence or Special General Licence by the Central Government permitting the import of such goods by such persons and subject to such conditions as may be specified. Clause 3 of the Exports Control Order likewise imposes restrictions on exports from the country in the following terms

"3. Restrictions on export of certain goods - (1) Save as otherwise provided in this Order no person shall export any goods of the description specified in Schedule I, except under and in accordance with a licence granted by the Central Government or by an officer specified in Schedule II.

(2) Notwithstanding anything contained in sub-clause (1) goods specified in Schedule 111 may be exported on fulfilment of the terms and conditions specified therein.

(3) If in any case, it is found, that the value, specification, quality and description of the goods to be exported are not in conformity with the declaration of the exporter in those respects or the quality And specification of such goods are not in ac