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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Dipankar Datta, M.S. Karnik, JJ.
Essar Shipping Limited - Petitioner
Versus
Union of India & Ors. - Respondents
Writ Petition No. 1335 of 2010
Decided On : 08-02-2022
Companies Act, 1956 - Foreign Trade (Development & Regulation) Act, 1992 - Section 5, 2(e), 6, (3) - Constitution of India, 1950 - Article 226, 14, 19(1) (g) - Customs Act, 1962 – Section 28AAA - Whether writ petition ought to be dismissed for suppression of any material fact or that petitioner has approached writ court with unclean hands - Whether said Circular is ultra vires Articles 14 and 19(1)(g) of Constitution, section 5 of FTDR Act - Whether said Circular is prospective, in sense that it would apply only to claims that are yet to be finalized, or whether cases settled and/or closed could be reopened thereby - Whether demand notice and reminder seeking to recover duty benefit received by petitioner under SFI Scheme are valid in law and hence, sustainable - Whether non-disclosure by petitioner of Application or its Declaration/Undertaking in writ petition - Whether Application and/or Declaration/Undertaking have a bearing on main point in issue - Whether said Circular was issued with approval of DGFT - Whether such clarification is intended to cover only pending claims yet to be finalized - Whether by reason of such clarificatory circular, settled and/or closed claims could be reopened – Held, Having regard to above, conclusion seems to be inescapable that though DGFT by issuing said Circular sought to clarify terms of SFI Scheme but such Circular was intended to be implemented to decide claims for grant of benefits under SFI Scheme which were not finalized as on date said Circular was issued - Had DGFT intended to reopen claims which had already been finalized, Court is inclined to view that of said Circular, if not also paragraph 2 thereof, would have been differently worded to carry forward such an intention - Even otherwise, any statement recorded in minutes of meeting of Port Officers which is clearly contrary to said Circular cannot be binding on any party – Court unequivocally record that said Circular does not, either expressly or by necessary implication, endorse decision taken in meeting of Port Officers and in absence of any stipulation in said Circular authorizing reopening of claims that have been settled and/or closed, it seems to Court to have been impermissible to again take a decision in meeting of Port contrary to terms of such circular and in absence of issuing a further clarificatory circular - Court, thus, hold on terms of said Circular that though it is clarificatory in nature, it does not have retrospective operation - As such, it was not open for third respondent to issue demand notice and reminder to recover Rs.27,40,35,827/- from petitioner acting on minutes of meeting of Port Officers - Petition allowed.
JUDGMENT:
Dipankar Datta, J.
FACTS GIVING RISE TO THE WRIT PETITION
1. The petitioner is a company incorporated under the Companies Act, 1956 and, inter alia, engaged in the business of rendering maritime transport services.
2. The first respondent is the Union of India and the other 4 (four) respondents are the officers of the first respondent, who are obliged to exercise powers and discharge duties in terms of the Foreign Trade (Development & Regulation) Act, 1992 (hereafter “the FTDR Act”, for short). Thereunder, the Central Government announces the Foreign Trade Policy (hereafter “FTP”, for short) from time to time. For the purposes of the present writ petition, the relevant FTP is for the period 2004-2009 (hereafter FTP 2004-09, for short).
3. By instituting this writ petition, the petitioner seeks to challenge Policy Circular No.25 of 2007 dated 1st January, 2008 (hereafter “the said Circular”, for short) issued by the Director General of Foreign Trade (hereafter “DGFT”, for short), the second respondent. According to the petitioner, in the garb of purported clarification, the DGFT has curtailed benefits available to service providers, such as the petitioner, under the Served from India Scheme (hereafter “SFI Scheme”, for short). Consequent upon the said Circular, the Joint Director General of Foreign Trade, Bengaluru, the third respondent, vide demand notice dated 28th January, 2010 (hereafter “demand notice”, for short) and reminder dated 31st May, 2010 (hereafter “reminder”, for short), post-facto and retrospectively, directed the petitioner to pay customs duty and interest on the basis of the benefits already availed and utilized by the petitioner on account of its entitlement under the SFI Scheme, in a sum of Rs.27,40,35,827/-.
4. The essence of the petitioner’s challenge is that the DGFT cannot take away the benefits conferred by the FTP 2004-09 by way of a circular, which is only administrative and/or executive in nature. It is also claimed that the third respondent does not have the power to deny the benefits conferred under the FTP 2004-09 long after the utilization thereof by the petitioner, when there is no provision whatsoever either under the FTDR Act or the FTP 2004-09 authorizing the third respondent to recall the benefits granted to the petitioner under the FTP 2004-09 for the past period, such benefits having accrued and granted to the petitioner in accordance with law.
5. Aggrieved by the said Circular as well as the the demand notice and the reminder, the petitioner has approached this Court under Article 226 of the Constitution of India seeking relief, which reads as follows:
(b) that this Hon’ble Court be pleased to issue a Writ of Certiorari, or a Writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, leading to the issuance of the impugned demand Notices dated 28th January, 2010 and 31st May, 2010 (Exhibits-‘N’ and ‘O’ respectively hereto) and after going into the legality, validity and propriety thereof, to quash and set aside the same;
(c) that this Hon’ble Court be pleased to issue a Writ of Prohibition or a Writ in the nature of Prohibition, or any other appropriate Writ, Order or prohibition, prohibiting the Respondents from implementing and/or carrying on and/or giving the impugned policy Circular No. 25/2007 dated 1st January, 2008 (Exhibit-‘K’ hereto);
(d) that this Hon’ble Court be pleased to issue a Writ of Mandamus, or a Writ in the nature of Mandamus, or any other appropriate Writ, Order or direction, directing the Respondents to forthwith withdraw the impugned demand Notices dated 28th January, 2010 and 31st May, 2010 (Exhibits-‘N’ and ‘O’ hereto).”
6. The pleaded case in t
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