The main legal point established in the judgment is that the State Government's encroachment into the exclusive jurisdiction of the Union Government by constituting a Committee to deal with the distribution of raw materials and the influence of the Committee on the actions of the Sponsoring Authority rendered the applications not disposed of in accordance with the law.

Govinda Bhat, J.—These Writ Petitions arise under the Imports and Exports (Control) Act, 1947, (Central Act XVIII of 1947), hereinafter called the Act. The petitioners have challenged the actions of the State Government (Respondent 2) and the Director of Industries and Commerce in Mysore (Respondent 1), taken in respect of the applications made by the petitioners for licences for import of stainless steel, for the period April-September, 1963, which resulted in the rejection of the applications by the Assistant Iron and Steel Controller, Madras (Respondent 3), on the ground that no Essentiality Certificate has been received from the Sponsoring Authority in the case of each one of the petitioners, and the petitioners have sought appropriate writs to quash the orders of Respondent 3 rejecting the applications, and for a mandamus to Respondent 1, the Director of Industries and Commerce, to follow the relevant rules and make his recommendations in accordance with law.

(2) Petitioners are manufacturers of stainless steel products, and they have their factories located either in Bangalore or other places within the State of Mysore. Stainless steel is not produced in India and therefore, requires to be imported from foreign countries under licences issued by the Licensing Authority constituted under the Act, for each licensing period. The Imports and Exports (Control) Act, 1947, has been enacted by the Central Legislature for the purpose of controlling imports and exports and section 3 thereof empowers the Central Government by Order published in the official Gazette, to make provisions for prohibiting restricting, or otherwise controlling the import and export of goods of any specified description.

In Exercise of the said powers, the Central Government made the order called 'The Imports (Control) Order, 1955'. Clause 3 of the said Order provides that, 'no person shall import any goods of the description specified in Schedule 1, except under, and in accordance with, a licence or a customs clearance permit granted by the Central Government or by any officer specified in Schedule II.' Clauses 4 to 10 make provision for making applications for Licences, the conditions subject to which the licence may be issued by the Licensing Authority, the refusal of licence, and the power to amend, suspend, or cancel the licence. In furtherance of the Act and the Order, the Union Government, from time to time, issues what is called 'Import Policy Statement' after examination of the needs of the country, the position of foreign exchange, the need to protect national industries, and all other relevant considerations. The import policy statement of the Government of India is published in the Gazette of India every year, and that is contained in the publication of the Government of India, popularly called the 'Red Book'.

(3) The petitioners who come under the category of actual users, were obtaining their import requirements under licences issued by the 3rd respondent, since about the year 1960. Pursuant to the Public Notice, dated 9th April, 1963, issued by the Iron and Steel Controller, Calcutta, on the subject of import licensing policy for the items licensable by the Iron and Steel Controller for the licensing period April-September, 1963, the petitioners, among others, made applications for licences to import stainless steel in accordance with the procedure prescribed by the regulations in the import control policy book for the year April, 1963-1964, and the Public Notice issued by the Iron and Steel Controller, Calcutta.

Para 4 of the Public Notice required the applicants to send two copies of their applications to the first respondent, who is the Sponsoring Authority, and the Sponsoring Authority was directed to retain one copy and forward the other copy of the application with his recommendation to Respondent 3, who is the licensing authority. The recommendations of the Sponsoring Authority is called the Essentiality Certificate. Respondent 1