( 1. ) PETITIONER No. 1 in this petition is a company incorporated under the Indian Companies Act, 1913, and petitioner No. 2 is a shareholder of that company. The company is inter-alia engaged in the manufacture of different types of asbestos cement products. For the manufacture of the said products, the company uses raw asbestos fibre (non-combustible) which is imported from abroad. The company has its factories at Kymore in Madhya Pradesh. The Company was granted a licence on 25th March 1977 under Section 58 (1) of the Customs Act, 1962 for having a private bonded warehouse at Kymore wherein the imported raw asbestos fibre was stored without payment of duty subject to the conditions set out in the licence. The licence was to remain in force for one year but under Clause 7 of the conditions attached to it the company was permitted to apply for renewal of the same. The licence was renewed from time to time and the last renewal was granted on 24th November 1981 for the period from 1st January 1982 to 31st December 1982. By a notice dated 18th September 1982 purporting to have been issued under Section 58 (2) (a) of the Act, the Assistant Collector, Central Excise (Division Satna) wrote to the company that it was being given a notice of two months after which its licence to run the private bonded warehouses will be deemed to have been cancelled. By the same notice the company was intimated that a public customs bonded warehouse had started functioning at Bhopal and that the company may warehouse its goods in that warehouse at Bhopal. The company protested but it was informed by letter dated 23rd September 1982 issued by the Assistant Collector that it is the Governments policy not to grant licence for private bonded warehouse. The company wrote to the Collector, Customs and Central Excise, on 25th September 1982 to permit it to operate its private bonded warehouse at Kymore. The company also wrote to the Director, Central Board of Excise and Customs, New Delhi, on the same subject by letter dated 5th October 1982. In this letter the company requested the Director to issue necessary instructions to the Assistant Collector, Satna, to withdraw the notice relating to cancellation of the licence and to grant its renewal. On 27th November 1982 the company was intimated that it was granted permission to continue the private bonded warehouse till 31st December 1982. By order dated 3rd December 1982 the company was informed by the Superintendent, Central Excise, Kymore, that the companys application for renewal of the licence could not be entertained for the facility of private bonded warehouse had been dispensed with. The company in this petition under Article 226 of the Constitution prays for quashing of the notice dated 18th September 1982 (Ex. C) issued by the Assistant Collector regarding cancellation of the licence, the Assistant Collectors letter dated 23rd September 1982 (Ex. E) intimating the Governments policy not to grant licence for private bonded warehouse, and the order dated 3rd December 1982 (Ex. J) issued by the Superintendent, Central Excise, Kymore, that the application for renewal of the licence cannot be entertained.

( 2. ) THE return filed on behalf of the respondents supports the cancellation of the licence and non-renewal thereof on the basis of the policy decision contained in Trade Notice No. 87/80-Customs, dated 1st August 1980 which is exhibited as Annexure R-I. Clause 2 which is the relevant clause of this policy statement reads as follows :

"it is accordingly been decided that, rather than licensing private warehouses in the interior, public warehouse will be appointed at selected places keeping in view the requirements of the Trade and Industry, the proximity to the ports of import, and the availability of customs expertise. "

( 3. ) BEFORE taking up the contentions raised by the parties, it is convenient to notice the relevant statutory provisions. Clause (43) of this section defines "warehouse" to