The central legal point established is that the suspension of an Importer Exporter Code must adhere to the procedure outlined in Section 8 of the FTDR Act, including the issuance of a show cause notice with grounds for proposed action and affording the concerned party a reasonable opportunity to be heard before any adverse action is taken.

JUDGMENT :

VIBHU BAKHRU, J.

1. The petitioner has filed the present petition, inter-alia, impugning an action of the respondents suspending the petitioner’s Importer Exporter Code “bearing No. AAGCD26981”.

2. The petitioner states that its Importer Exporter Code (hereafter ‘IEC’) was suspended in violation of Section 8 of the Foreign Trade (Development & Regulation) Act, 1992 (hereafter “the FTDR Act”).

3. It is the petitioner’s case that Section 8 of the FTDR Act requires the Director General of Foreign Trade (hereafter “DGFT”) or any other officer authorized by him to give a notice in writing, informing the concerned importer/exporter that it intends to suspend or cancel his IEC, and the grounds on which such an action is proposed. The concerned importer/exporter is required to be afforded a reasonable opportunity to make a representation in writing before any such action is taken.

4. The petitioner states that DGFT had not issued any show cause notice as required under Section 8 of the FTDR Act. Further, it had not communicated any grounds for proposing to suspend the petitioner’s IEC. The DGFT has also not passed any speaking order for suspending the IEC.

5. DGFT has filed a counter affidavit countering the aforesaid submissions. According to the DGFT, it has issued a show cause notice dated 11.05.2022 and had also issued a reminder dated 06.06.2022, giving full opportunity to the petitioner to show cause as to why its IEC not be cancelled. The petitioner’s IEC was suspended by an order dated 31.08.2022.

6. Section 8 of the FTDR Act is set out below:

“8. Suspension and cancellation of Importer-exporter Code Number.-[(1)Where-

(a) any person has contravened any of the provisions of this Act or any rules or orders made thereunder or the foreign trade policy or any other law for the time being in force relating to Central excise or customs or foreign exchange or has committed any other economic offence under any other law for the time being in force as may be specified by the Central Government by notification in the Official Gazette; or

(b) the Director General or any other officer authorized by him has reason to believe that any person has made an export or import in a manner prejudicial to the trade relations of India with any foreign country or to the interests of other persons engaged in imports or exports or has brought disrepute to the credit or the goods of, or services or technology provided from, the country; or

(c) any person who imports or exports specified goods or services or technology, in contravention of any provision of this Act or any rules or orders made thereunder or the foreign trade policy, the Director General or any other officer authorized by him may call for the record or any other information from that person and may, after giving to that person a notice in writing informing him of the grounds on which it is proposed to suspend or cancel the Importer-exporter Code Number and after giving him a reasonable opportunity of making a representation in writing within such reasonable time as may be specified in the notice and, if that person so desires, of being heard, suspend for a period, as may be specified in the order, or cancel the Importer-exporter Code Number granted to that person.]

(2) Where any Importer-exporter Code Number granted to a person has been suspended or cancelled under sub-section (1), that person shall not be entitled to [import or export any goods or services or technology] except under a special license, granted, in such manner and subject to such conditions as may be prescribed, by the Director-General to that person.”

7. A plain reading of Section 8 of the FTDR Act indicates that the DGFT or any officer authorised by him can cancel or suspend of the IEC of any person if any of the circumstances as specified in clauses (a), (b) and (c) of Section 8(1) of the FTDR Act exist or any of the conditions set out therein are satisfied. Section 8(1) of FTDR Act makes it mandatory that a show cause no