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High Court Of Calcutta
Ajit Kumar Sengupta, Nure Alam Chowdhury
KALINDI WOOLLEN MILLS (P) LTD. - Appellant
Versus
UNION OF INDIA - Respondent
Writappeal 384 Of 1990
Decided On : 02/01/1994
IMPORTS AND EXPORTS (CONTROL) ACT - SECTION 3 - RESTRICTION ON IMPORT OF GOODS - VALIDITY - ARTICLE 14, 301 OF THE CONSTITUTION OF INDIA - DISCRIMINATION - FREEDOM OF TRADE AND COMMERCE - REASONABLENESS OF RESTRICTION - PUBLIC INTEREST - JUDICIAL REVIEW.
Fact of the Case:
The appellants, a company having a factory at village Dhoom Manikpur, in the District of Ghaziabad in the State of Uttar Pradesh, imported woollen and synthetic rags and shoddy wool under Open General Licence Scheme of the Government of India. The Government of India issued a public notice and an Import Trade Control Order amending the said Open General Licence by restricting the importation of the said goods through two ports only, viz. Bombay and Delhi ICD. The appellants challenged the validity of the said public notice and the control order on the ground that the same were arbitrary, mala fide, illegal without and/or in excess of jurisdiction and bad in law.
Finding of the Court:
The impugned public notice and the control order are ultra vires the provisions of the Imports and Exports (Control) Act, 1947. The impugned public notice and/or the impugned control order is discriminatory and violative of Article 14 of the Constitution of India. The impugned public notice and/or the impugned control order are unreasonable and violative of Article 301 of the Constitution of India.
Issues: Whether the impugned public notice and control order are ultra vires the provisions of the Imports and Exports (Control) Act, 1947.
Ratio Decidendi: 1. The power under Section 3 (1) of the Imports and Exports (Control) Act, 1947 enables the Central Government to not only prohibit or restrict importation of goods as such but also their point of entry by or through any port in the country. 2. Section 3 (3) of the said Act empowers the Central Government to issue the impugned Public Notice or the impugned Control Order. 3. Any restriction or prohibition or control of any kind whatsoever under the said Section 3 of the said Act in order to be valid, has to be applicable to the entire country. 4. The impugned public notice and/or the impugned control order has resulted in discrimination. The owners of factories which are situated in the Western and North-Western parts of the country would now be able to import the said goods at a much lesser price than owners of factories which are situated in, inter alia, the Eastern and North-Eastern parts of the country as the additional cost of transportation of goods from Bombay or Delhi would now have to be borne by them for no fault of theirs. 5. There is no intelligible basis which has been disclosed before this Court either in the affidavits filed by the Customs Authorities or in the Import Licensing Control Authorities of the Government of India or during the course of argument before this Court on the basis whereof Delhi and Bombay ports have been distinguished as a different class from other major ports in the country like Calcutta, Madras, Cochin or Vizagapatnam. 6. The impugned public notice and/or impugned control order are unreasonable and violative of Article 14 of the Constitution.
Final Decision: Appeal allowed. Writ petition succeeds. Rule made absolute. Impugned notice(s), order(s) and proceedings are set aside and quashed. The Customs Authorities are directed to issue wharf rent exemption certificate in respect of the consignment being the subject-matter of this proceeding within a fortnight from date and the Port Authorities shall grant rebate as admissible on the basis of such wharf rent exemption certificate.
( 1 ) THIS appeal is directed against the judgment and order passed by a learned Single Judge of this Court on 28th July, 1990 dismissing the writ application filed by the appellants herein challenging the validity and/or legality of a public notice bearing No. 122-ITC (PN)/88-91 dated 26th April, 1989 issued by the Ministry of Commerce, Government of India, New Delhi, and an Import Trade Control Order No. 52/88-91 dated 28th April, 1989 issued by the Ministry of Commerce, Government of India.
( 2 ) THE facts giving rise to the instant appeal are as under : the appellant company has a factory at village Dhoom Manikpur, in the District of Ghaziabad in the State of Uttar Pradesh and the principal raw-materials required for running the said factory by the appellants is rags both woollen and synthetic as well as shoddy wool. Since, these raw-materials are in short supply in this country, these are allowed to be imported under the Open General Licence Scheme of the Government of India contained in the Import Policy 1988-91 subject to the conditions imposed regarding, inter alia, importation through canalising agency and/or importation under specific licences granted by the Import Licensing Control Authorities.
( 3 ) UNDER the said Import Policy, the Government of India, in exercise of powers conferred upon it under Section 3 of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as the said Act) issued an order on or about 30th March, 1988 being Open General Licence Order No. 1/88, whereby the said goods were allowed to be imported under the Open General Licence Scheme by an actual user subject, inter alia, to the condition that the contract for importation of such goods had to be registered, prior to the import of the said goods with the Textile Commissioner of the Government of India. It was only after the contracts were registered with the said Textile Commissioner and the appropriate registration number was granted by the said authority, the said goods could be imported.
( 4 ) IT was stated that the appellants had been running its factory in compliance with the various regulations contained in the Imports (Control) Order, 1955 as well as the provisions contained in the said Import Policy. During the period January 1989 to April 1989, the appellants entered into six several contracts with its foreign sellers for purchase and import of consignments of the said goods required to be used by it in its aforesaid factory as a raw-material. The contracts in question were duly registered by the appellants with the Textile Commissioner of the Government of India. In terms of the said contract, a total quantity of 725 metric tons of the said goods were sought to be imported.
( 5 ) IN or about May 1989, the appellants allegedly came to learn that by a Control Order being No. 52/88-91 dated 28th April, 1989, the Central Government sought to amend the said Open General Licence in the following manner :-"in exercise of the powers conferred by Section 3 of the Imports and Exports (Control) Act, 1947, (XVIII of 1947), the Central Government hereby makes the following amendment in the Open General Licence No. 1/88 dated the 30th March, 1988, published under the notification of the Government of India in the Ministry of Commerce No. 329 (E) dated the 30th March, 1988, namely; in the said Open General Licence No. 1 /88 in condition number 14, after sub-clause (iii) the following shall be inserted namely; (iv) Imports of woollen rags/synthetic rags/shoddy wool will be allowed through two ports only, viz. Bombay and Delhi, ICD. "
( 6 ) THE appellants also came to learn that simultaneously the said Import Policy was also amended by a public notice bearing No. 122/itc (PN)/88-91, dated 28th April, 1989 (hereinafter referred to as the said public notice) in the following manner :- "import and Export Policy for April 1988/march 1991. " attention is invited to the Import and Export Policy for April 1988 -March 1
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