TMI Blog2014 (2) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... ary implication excludes the “Rule making power” conferred under Section 19 of the FTDR Act inasmuch as the powers conferred under Section 19 cannot be re-delegated to the DGFT as expressly prohibited under Section 6(3) of the Act. The provisions of the FTDR Act do not grant power to the DGFT or its subordinates to re-determine or re-verify the deemed export benefits if such benefits have been approved or granted as per the provisions of the FTDR Act except by way of review as provided in Section 16. In the absence of any power under FTDR Act, the DGFT or its subordinates cannot assume quasi-judicial power for instance, the power to re-determine or re-verify under the administrative guidelines i.e. Para 7 of the ANF -8 Form. Therefore, by virtue of Para 7 of the ANF -8, the DGFT is deriving the quasi-judicial power which is beyond the provisions of FTDR Act. Although specifically prohibited under section 6 of the Act, the DGFT has been illegally vested with the power to intervene in the subject-matters coming within the purview of Sections 3, 5, 15, 16 and 19 in clear violation of sub-section 3 of Section 6 of the FTDR Act - what is specifically prohibited by the FTDR Act, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the Respondent No.2 or its subordinates to re-verify or re-determine the duty drawback benefits once such benefits are approved to the claimant. [d] Such further and other relief, order or direction which may be just, fit, proper and equitable in the facts and circumstances of the petition. 2. The case made out by the petitioner may be summed up thus:- 2.1 The petitioner has been claiming deemed export benefits on various power projects and, therefore, has an interest in the legality and propriety of various powers exercised by the respondent no 2, the Director General of Foreign Trade [DGFT] and its subordinates in connection with the processing and grant of the deemed export benefit. The respondent no.1 is the Union of India, responsible for the formulation of the Foreign Trade Policy [FTP] under which the deemed export benefits are available to the petitioner. 2.2 Section-3 of the Foreign Trade (Development and Regulation) Act, 1992 ( FTDR Act ) empowers the Central Government to make provision for the development and regulation of foreign trade. 2.3 Section 5 of the FTDR Act empowers the Central Government to formulate and announce by way of notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HOP provides that to claim duty drawback benefits, a claimant has to fill an ANF-8 form. Para 7 of the declaration of ANF-8 form requires an undertaking from the claimant that in case of re-determination and re-verification, the claimant shall refund the amount paid in excess. 2.9 Para 8.3.6 of the HOP provides that subject to the procedures laid down in the HOP, Customs and Central Excise Duty Drawback Rules, 1995 shall apply mutatis mutandis to deemed exports. 3. In the aforesaid background, according to the petitioner, the aforesaid provisions i.e. Para 2.3 of the FTP, Para 8.3.6 of the HOP and Para 7 of the ANF-8 form are in gross violation of Article 14 and 19[1] [g] read with Articles 246 and 265 of the Constitution of India and the provisions of FTDR Act and the FTP on the following grounds: 3.1 The Respondent No.2 through Para 8.3.6 of the HOP has incorporated by reference the provisions of Duty Drawback Rules mutatis mutandis to the FTP and HOP. The HOP is nothing but an administrative guideline as can be discerned from the reading of Para 2.4 of the FTP read with Section 6 of the FTDR Act. Section 3 of the FTDR Act grants power to the Respondent No.1 to make pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure and therefore, the same cannot be used to introduce substantive law i.e. Duty Drawback Rules. Therefore, Para 8.3.6 of the HOP is liable to be set aside. 3.3 The FTDR Act or FTP does not grant power to the Respondent No.2 and its subordinates to re-determine or re-verify the deemed export benefits once such benefits have been approved or granted as per the provisions of the FTP. In the absence of power under FTDR Act or FTP, the Respondent No.2 and its subordinates cannot assume quasi-judicial power such as power to re-determine or re-verify under administrative guidelines i.e. Para 7 of the ANF-8 Form. Therefore, Para 7 of the ANF-8 is usurpation of quasi-judicial power by the Respondent No.2 and its subordinates and thus, travels beyond the provisions of the FTDR Act as well as FTP and hence, liable to be struck down. 3.4 Merely because such declaration is required to be signed by the claimant cannot confer power to re-determine and re-verify on the Respondent No.2 and its subordinates where such power is otherwise not available in law. It is a settled principle of law that acquiescence cannot validate propriety and jurisdiction of an authority where no such powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut no specific enactment was passed by the Central Legislature. During the Second World War, under the compulsive necessity created by the scarce foreign exchange resources and the acute shortage of shipping space in the Indian ports, a notification under the Defence of India Rules was issued in 1939, bringing under control the import of 68 commodities. Steadily other notifications were issued bringing more items under control. In July, 1943 a consolidated notification was issued covering a wide range of controlled items. With the end of the Second World War, the Defence of India Rules lapsed but the provisions regarding import control instructions were continued by virtue of the Emergency Provisions (Continuance) Ordinance, 1946 which was replaced, in so far as the imports and exports control is concerned, by the Imports and Exports (Control) Act, 1947. It came into force for a period of three years but was extended from time to time. In 1971 it became a permanent statute. By the Imports and Exports (Control) (Amendment) Ordinance, 1975, changes of farreaching character were made in the Imports and Exports (Control) Act, 1947. The Ordinance was replaced by the Imports and Exports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27th August, 2010. Some important provisions of the Statutes which have bearing on the contentions urged in the petition. 4.5 Section 2(a) of the said Act defines adjudicating authority to mean the authority specified in, or under section 13. Section 2(d) defines Director General to mean the Director General of Foreign Trade appointed under Section 6. 4.6 Section 2(e) defines import and export respectively as bringing into, or taking out of, India any goods by land, sea or air . 4.7 Section 2(h) defines Order as any order made by the Central Government under section 3 . 4.8 Section 3 enables the Central Government to make provisions for the development and regulation of foreign trade by facilitating imports and increasing exports. It is therefore trite to submit that any policy framed by virtue of exercise of power under Section 3(1) must be so interpreted to further the statutory intention as manifest by virtue of Section 3(1). Similarly, under Section 3(2) Central Government is empowered to make provision for prohibiting, restricting or otherwise regulating in all cases or in specified classes of cases and subject to such exceptions, if any, as may be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject to such conditions, by the Director General or such other officer subordinate to the Director General, as may be specified in the Order. However, this very provision makes it clear that powers under Sections 3, 5, 15, 16 and 19 conferred on the Central Government cannot be delegated. That under Section 13 of the Act adjudicating authority is empowered to impose any penalty or adjudge any confiscation. This power can be exercised by the Director General as adjudicating authority or subject to such limits as may be specified, by such officer as the Central Government may, by notification in the Official Gazette, authorize in this behalf. 4.12 Only powers which are exercised by the adjudicating authority under Section 13 either by the Director General or subordinate officer empowered by the Central Government are made subject matter of appeal under Section 15(1) of the Act. Provision of sub-section (1) of Section 15 is clear since appeal can be preferred by any person aggrieved by any decision or order made by the adjudicating authority under the said Act. Orders that adjudicating authority can pass are those which are mentioned in Section 13, namely, imposing penalty or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule of DEPB rates including content, scope or issue of an authorization there under, the said question or doubt shall be referred to the DGFT whose decision thereon shall be final and binding. The above power is wide and untrammelled to interpret any provision of the FTP. It is, therefore, within the jurisdiction, power and authority of the DGFT to interpret the provisions of FTP. In other words, maintaining the provision of the Policy as it is, power conferred on the DGFT under para 2.3 in regard to interpretation is wide enough to determine the eligibility of any person claiming hereunder. 4.16 Para 2.4 of the FTP provides that DGFT may specify procedure to be followed for an exporter or importer or by any licensing or any other competent authority for the purpose of implementing the provisions of the Act, the Rules and the Orders made there under and FTP. Such procedures shall be published by means of a Public Notice, and may, in like manner, be amended from time to time. Bare perusal of the above provision makes it clear that the Director General has the power to specify the procedure to be followed by an exporter for the purposes of implementation of the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General of Foreign Trade (respondent no.2) and its subordinate officers that are processing the applications for grant of deemed export benefit and by saying so the petitioner has explained the filing of the present petition, challenging the vires of para 8.3.6 and para 2.3 of the Foreign Trade Policy, on the apprehended alleged correctness and soundness of the proposed action of the respondents pursuant thereof. Thereafter, the petitioner has further averred in paragraph 11 that it is likely to be affected by the assumption of jurisdiction by the respondent no.2 and its subordinates within territorial limits of this Court. All these averments apart from being wholly mischievous suffer from suppression of material facts that the petitioner had instituted Special Civil Application No.2569 of 2013, inter-alia, praying for the following relief:- (a) To issue a writ of order / direction, setting aside impugned order dated March 21, 2011 passed by the respondent no.3 and order dated April 13, 2012 passed by the respondent no.4 in appeal and instructions contained in the minutes dated March 15, 2011 and September 09, 2011 of PIC as illegal, arbitrary, contrary to FTDR Act and violat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch decision forthwith thereafter. This Court has observed in para 6.0 (iv) that all contentions and defence which would be available to the respective parties, more particularly the petitioner, are kept open to be dealt with and considered by the Director General of Foreign Trade in accordance with law and on merits for which this Court has not expressed anything in favour of either of the party. This Court has also observed in para 6.0(v) that in case of any adverse decision it will be open for the petitioner to challenge the same before appropriate court / forum which shall be considered in accordance with law and on merits. This order has also been suppressed from this Court. The Petitioner has suppressed the vital facts that in compliance of the above directions, it has submitted its fresh representation and hearing thereof is underway. 4.22 While disposing of the above said Special Civil Application No.2569 of 2013, this Court has in paragraph 2 of the decision dated 26th June, 2013 observed that number of submissions have been urged by the learned Counsel appearing on behalf of respective parties with respect to the power of the Joint Director General of Foreign Trade in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufficient to decline the exercise of discretionary and equitable jurisdiction of this Court. 4.24 There is yet another mala fide intention of the petitioner in preferring present petition. The petitioner - Alstom India had been appointed as an independent contractor in respect to the erection and commission of a Non-Mega Power Project of Gujarat State Electricity Corporation Limited (GSECL). That a dispute about eligibility of GSECL, who had by itself is an importer, having itself imported several goods and paid custom duty at a concessional rate of duty is pending before this Court as regards eligibility to claim Deemed Export Benefits in regard to the said transaction. The said amount is sought to be claimed as a duty drawback on the ground that such import of goods by said GSECL in view of a contract being given through international competitive bidding ( ICB ) to Alstom is eligible for consideration and grant of deemed export benefit under Chapter VIII of the present Foreign Trade Policy. The Union of India and the Director General of Foreign Trade, which have passed order denying such claim, are resisting such a prayer of GSECL. This issue is, however, subject matter of a w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of action for the petitioner to challenge the Foreign Trade Policy would arise only and only if there is a decision which is adverse to the petitioner if decided by the Director General of Foreign Trade, in compliance of the directions contained in the order dated 26th June, 2013 rendered in Special Civil Application No.2569 of 2013. At present, the Director General of Foreign Trade is hearing the proceedings and is cognizant of the proceedings and, therefore, there is no cause of action for the petitioner to institute present petition. 4.26 If the submissions made in Para 11 are perused, then the petitioner has merely stated very vaguely that the petitioner is likely to be affected by the assumption of jurisdiction by respondent no.2 and its subordinate authorities, by patently illegal reading of provisions of the FTP, within the territorial limits of this Court. On that basis the petitioner asserts that this Court has jurisdiction to entertain the petition. There is no specific cause of action pleaded by the petitioner. No cause of action has at present arisen within the jurisdiction of this Court. From the cause title of the present petition, it is clear on reading the caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GFT to be responsible for carrying out the FTP. Being an executive body does not super impose the restriction that it cannot frame guidelines or procedures in order to shoulder its responsibilities. Rather, in terms of Section 6 of the Act, the executive body becomes bound to devise a suitable mechanism to fulfil the enshrined responsibility. 5.1.1 The DGFT has not legislated the stipulation at para 8.3.6 of the HOP Vol. I by incorporating the reference .........Customs and Central Excise Duty draw Back Rules, 1995 shall apply mutatis mutandis to deemed exports. It is not only the Para 8.3.6 of the HOP Vol. I that has been devised, rather for each and every aspect of the scheme which is a part of the FTP, the DGFT has devised suitable documents and procedures. Para 8.3.6 of the HOP Vol. I contains the stipulation in the existing form, as, in the opinion of the DGFT, there is no need of any other innovative stipulation/provision/procedure, since the provisions contained in the Customs and Central Excise Duty Draw Back Rules, 1995 are sufficiently in consonance with the intended purpose of the DGFT. No additional purpose would be served even if the existing stipulation is substi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which clarification/interpretation has been offered by the DGFT. Regional Authorities of the Directorate General of Foreign Trade, with whom the applicants had submitted the Declarations as per the para 7 of ANF 8, and based upon which the Regional Authorities had provided the deemed export reimbursement, thus, reviewed these cases, as per the clarification given by the DGFT through exercise of power by the DGFT under para 2.3 of the FTP. 5.4 Para 5: Para 2.3 of the FTP in itself is abundantly absolute and unambiguous. The utility, validity and sanctity of para 8.3.6 of the HBP Vol. I has already been contended at para 1 above. 5.5 Paras 6 to 8: These paras are a matter of records, hence no comments. 5.6 Para 9: The petitioner has contended that provisions contained in Para 2.3 of the FTP, Para 8.3.6 of the HOP Vol. I and para 7 of the ANF 8 are in gross violation of Article 14 and 19 (1) (g) read with Articles 246 and 265 of the Constitution of India and the provisions of FTDR Act and the FTP. The petitioner has not explained as to on what grounds the gross violation has been contended. 5.7 Para 10: In view of the facts as submitted in the foregoing paras, this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner. All orders passed by the Respondent No.2 or its subordinate officers to the extent they are adverse to the interest of the petitioner have been challenged separately before the appropriate forum. The adjudication of the legal issues raised in the present petition have no bearing on the judicial determination of such challenges pertaining to merits of individual transactions. 6.5 PRELIMINARY OBJECTION The affidavit has not been filed by the Respondent No.2. Instead, the affidavit has been filed by an officer subordinate to the Respondent No.2 holding the designation of Jt. DGFT. In the affidavit, no averments have been made, which remotely indicate that the deponent has been specifically authorized by the Respondent No.2 on his behalf to submit the said affidavit nor has any appropriate authorization letter been annexed thereto. The Jt. DGFT is neither a party impleaded nor a proper party or necessary party for the purpose of the present petition, and in that sense is a stranger to the present legal proceedings. Therefore the affidavit filed by a person alien to the proceedings should not be considered by this Court and the affidavit should be directed to be taken off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e officer subordinate to the DGFT, an appeal lies before the DGFT. This is, therefore, an illustration of an illusory and almost futile adjudicatory exercise that is likely to take place under the scheme of the FTP breaching all the established principles of judicial process in view of the following: 7.4.1 The subordinate authorities, while exercising their power to adjudicate under Section 13 of the FTDR Act are bound by the interpretation of the provision of the FTP by the Respondent No.2 under Para 2.3 of the FTP and therefore, have no choice but to follow the interpretation so adopted by the superior officer [i e. DGFT] in discharging their quasi-judicial function thereby militating the requirement of independent application of mind. 7.4.2 The adjudication order so passed by the subordinate officer on appeal shall lie before the Respondent No.2 under Section 15 of the FTDR Act who having interpreted the FTP in a certain manner would certainly not take a view contrary to such interpretation adopted by him, thereby making the entire appellate procedure a sham one. It is also a classic case of violation of the trite principle of judicial process i e. nemo judex in causa sua. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elegate the rule making power or power to legislate to any third party including the Respondent No.2. On analysis of the scheme of the FTDR Act and the principles of the administrative law stated above, it would be appropriate to state that the mother legislation [i.e. FTDR Act] has bestowed the power on the Central Government to formulate the delegated legislation [i.e. FTP] and further subordinate legislations by way of rules pursuant to Section 19 of the FTDR Act. However, no power can be seen to have been granted to the Respondent No.2 to legislate and therefore, the power conferred on the Respondent No.2 under Para 2.4 of the FTP, to specify procedures has to be interpreted strict senso to mean only administrative guidelines and none other. If in discharge of such power and, in the garb of laying down the procedures, the Respondent No.2 incorporates by reference any substantive law, [as has been done in Para 8.3.6 of the HOP by incorporating the Customs and Central Excise Duty Drawbacks Rules, 1995 [ duty drawback rules ] it would be an action fraught with impropriety for reasons of having travelled beyond the power conferred on it and breaching the fundamental principle of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of power by the authority was legal and proper in view of legality of the source of power. 7.11.4 The challenge in the said petition of orders adverse to the interest of the petitioner was premised essentially on the principles of estoppel and violation of the principles of natural justice. It was the action of the officers of reopening assessments which have already been completed that was challenged on the ground that they do not possess any power under the FTDR Act read with the FTP for such reopening. One of the key points that the petitioner had highlighted before the Division Bench was that it is an established principle of law that once assessment is complete, such assessment cannot be reopened. Instead, a proper procedure is to file an appeal against such an assessment order and an authority having passed an order becomes functus officio and cannot recall his order. 7.11.5 While as part of one of its alternate arguments, legitimacy of the power of the Respondent No.2 to interpret the FTP was raised [as merely an alternative argument] however, no relief whatsoever was prayed for by the petitioner with respect to challenging the vires of the said provision. 7.11.6 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the DGFT is ex facie perverse, bereft of basic understanding of competencies and jurisdiction of the DGFT and is entirely motivated to deny substantive justice to the petitioner. 7.13 Consequently, the pleadings of the Respondent No.2 that the petitioner deserves to be saddled with exemplary costs while dismissing the petition in limine is a reflection of their mala fide intention to deny the petitioner's legitimate right to challenge the vires/legality or otherwise of any piece of legislation before this Hon'ble Court. 7.14 The contents of Para 2[B] [i] of the affidavit are incorrect as the petitioner never challenged the vires of Para 2.4 of the FTP in the other writ petition. The subsequent averments by the Jt. DGFT on behalf of the Respondent No.2 of the said paragraph do not in any manner establish that the action of the petitioner in filing this petition was ever mischievous and/or suffers from the vice of suppression of material facts. Except bald allegations, which as demonstrated herein above are bereft of any substance and are absolutely reckless, the Respondent No.2 has not been able to show the manner in which the petitioner has committed any legal mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its affidavit that there has been suppression of facts, it has been rightly indicated in the affidavit that the Hon'ble High Court at Para 6[iv] and [v] have rightly directed that all contentions and defences available to the parties more particularly to the petitioner have been kept open for consideration afresh by the DGFT and that the division bench is not expressing anything in favour of either parties and that should adverse decision be passed by the DGFT it is open for the petitioner to challenge the same before the appropriate court forum . The said directive of the High Court cannot be interpreted to mean that the High Court has directed the DGFT to rule on the vires of the various provisions of the FTP - for the reason that the DGFT does not possess such power. Instead, the true and correct interpretation of the above directive can only be that the DGFT has been directed to examine the petitioner's eligibility to claim duty drawback on merits and all other aspects that the DGFT has jurisdiction to rule on. Therefore, these vital aspects clearly demonstrate that the substratum of both the petition is different. 7.17 The contents of Para 2[B][iv] of the affidav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the affidavit are vehemently denied as they are grossly erroneous and have shades of qualifying as being insinuating in nature without appreciating the relevant facts and circumstances pertaining to the dispute in the case of GSECL and the petitioner, for the reasons more fully described below: 7.19.1 To the best of the petitioner's knowledge, GSECL's claim for duty drawback [which was denied by Respondent No.2 and is thus subject matter of Civil Application No. 15706 of 2011] pertains to the equipment purchased and imported by them. Alstom India Limited, i.e., the petitioner has no role or interest into the duty drawback claim of GSECL with respect to such imports. 7.19.2 Consequently, the allegation that - Alstom India Limited, i.e. the present petitioner is substantially and vitally interested in those proceedings, inasmuch as, if duty drawback is ordered to be granted to GSECL by the High Court, then Alstom India Limited would claim the reimbursement of such amount from GSECL demonstrates lack of knowledge of facts and the law on the part of the deponent. The conduct of the deponent in filing affidavits without verifying the facts is deplorable. 7.19.3 On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation is to say the least laughable and deserves to be rejected. The contention of the Respondent No.2 that the cause of action for the petitioner to challenge the Foreign Trade Policy would arise only and only if there is a decision which is adverse to the petitioner if decided by the Director General of Foreign Trade, in compliance of the directions contained in the order dated 26th June, 2013 rendered in Special Civil Application No. 2569/13 betrays possession of rudimentary knowledge of law and highlights absolute non-application of mind on the part of the deponent. 7.21.1 The contention raised by the petitioner about lack of territorial jurisdiction of this Court in entertaining the present petition is devoid of any merit and hence, denied. Even though the registered office of the petitioner company is in State of Maharashtra, the petitioner company has a significant investment in the form of full-fledged manufacturing plant in the State of Gujarat. It is from the said plant that the petitioner supplies equipments to various power projects. In respect of such supplies, the petitioner files claims for duty drawback with the office of the DGFT at Vadodara. The above fact c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this Bench, goes to show the complete lack of desire for fair play by the Respondent No.2 and instead, reflects badly of what governmental institutions should stand for. Exemplary costs and strictures, if any, should be deserved by the deponent of the affidavit for repeatedly making false allegations and attempting to misguide this Bench to intentionally cause harm to the interest of the petitioner and scuttle its legitimate right to approach this Court and seek relief subject to the Court's discretion. 7.26 The contents of Para 2C of the affidavit are denied. The preliminary objections raised by the respondent are frivolous and without any substance. There is no suppression of any material fact which would have a bearing on the adjudication of legality of the provisions questioned in the present petition. 7.27. The allegations of Para 3 of the affidavit are denied which state that the petitioner has apparently sought to surreptitiously file an appeal before this Bench against the order of the Division Bench of this High Court rendered in the Special Civil Application No. 2569 of 2013 are denied on the following grounds: 7.27.1 A petition can be considered as an Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not require any comment. 7.30 The averment of the Jt. DGFT on behalf of the Respondent No.2 in Para 6[1] of the affidavit to the extent it states that the HOP Vol. I is a consolidated compilation of the methodology necessary for execution and implementing the FTP and also the averment that the Respondent No.2 being an executive body is entrusted to carry out the FTP and can frame guidelines or procedures for this purpose is admitted. However, the subsequent averments made therein with respect to the specific comments made qua the nature and characteristics of the provisions contained in Para 8.3.6 of the HOP Vol I in elation to which it has been stated in the affidavit that the DGFT has merely provided these as procedural guidelines as these duty drawback rules are sufficiently in consonance with the intended purpose of DGFT are denied for the reasons more fully described below: 7.30.1 The duty drawback rules have been formulated by the Central Government by way of a delegated legislation pursuant to Section 75 of the Customs Act, Section 37 of the Central Excise Act, Section 93A read with Section 94 of the Finance Act and therefore it is not merely an administrative guidelin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. 10 It provides for access to manufactory Substantive 10. 11 It provides for procedure for claiming drawback on goods exported by post. Procedural 11. 12 It provides for statement declaration to be made on export by other than post Procedural 12. 13 It provides for manner and time for claiming drawback on other than by post Procedural 13. 14 It provides for payment of drawback with interest Procedural 14. 15 It provides for supplementary claim Procedural 15. 16 It provides for repayment of erroneous or excess payment of drawback Substantive 16. 16A It provides for recovery of drawback where export goods proceeds not realized Substantive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities in discharge of their various quasi-judicial functions are admitted. Such a scheme goes against the basic principle which requires that the adjudicating and quasi-judicial body cannot be influenced by administrative directive from superior officer. Safeguards as provided under the Central Excise Act, Customs Act, Finance Act and Income Tax Act in this regard ought to have been adopted under the FTP as well. 7.35 The averment of Respondent No.2 in Para 6[5] that under Para 2.3 Respondent No.2 has abundant absolute power which aspect forms the very edifice of the petitioner s pleadings is admitted. The said absolute powers without reasonable restrictions are being challenged in the present petition. 7.36 Para 6 [6to8] of the affidavit requires no comments. 7.37 The contents of Para 6[9] of the affidavit and rely upon Para 1 of the writ petition are denied. 7.38 The contents of Para 10 are denied. 7.39 The averments of Para 6 [AtoD] are denied in view of the above submissions. 7.40 The contents of Para 6 [E F] of the affidavit are denied by relying upon the submission made in Para E of the writ petition. 7.40 In regard to para 6[11] of the affidavit, the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enging the vires of para 8.3.6 and para 2.3 of the Foreign Trade Policy, on the apprehended alleged correctness and soundness of the proposed action of the respondents pursuant to the direction given by the earlier Division Bench. Mr. Raval further submits that the petitioner has further averred in paragraph 11 that it is likely to be affected by the assumption of jurisdiction by the respondent no.2 and its subordinates within territorial limits of this Court. According to Mr. Raval, all those averments, apart from being wholly mischievous, suffer from suppression of material facts that the petitioner had instituted Special Civil Application No.2569 of 2013, inter-alia, praying for the following relief:- (a) To issue a writ of order / direction, setting aside impugned order dated March 21, 2011 passed by the respondent no.3 and order dated April 13, 2012 passed by the respondent no.4 in appeal and instructions contained in the minutes dated March 15, 2011 and September 09, 2011 of PIC as illegal, arbitrary, contrary to FTDR Act and violative of Articles 14, 19(1)(g) and 300-A of the Constitution; (b) To pass an order, directing the respondent authority to disburse the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defence which would be available to the respective parties, more particularly the petitioner, were kept open to be dealt with and considered by the Director General of Foreign Trade in accordance with law and on merits for which the Court has not expressed anything in favour of either of the party. Mr. Raval further submits that the Division Bench also observed in para 6.0(v) that in case of any adverse decision it will be open for the petitioner to challenge the same before appropriate court / forum which shall be considered in accordance with law and on merits. 8.4 Mr. Raval further submits that while disposing of the above said Special Civil Application No.2569 of 2013, the Division Bench has in paragraph 2 of the decision observed that number of submissions had been urged by the learned Counsel appearing on behalf of respective parties with respect to the power of the Joint Director General of Foreign Trade in reviewing and/or recalling the earlier decision of approving the duty drawback and even with respect to eligibility of duty draw back by the petitioner under the relevant Export and Import Policy / Foreign Trade Policy. Mr. Raval further points out that the Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssional rate of duty, is pending before this Court as regards eligibility to claim Deemed Export Benefits in regard to the said transactions. The said amount is sought to be claimed as a duty drawback on the ground that such import of goods by said GSECL, in view of a contract being given through international competitive bidding ( ICB ) to the petitioner, is eligible for consideration and grant of deemed export benefit under Chapter VIII of the present Foreign Trade Policy. The Union of India and the Director General of Foreign Trade, which have passed order denying such claim, are resisting such a prayer of GSECL. Such issue, according to Mr. Raval, is the subject matter of a writ petition being Special Civil Application No. 15706 of 2011, which is pending before Division Bench of this Court. According to Mr. Raval, the present petitioner is substantially and vitally interested in those proceedings, inasmuch as if such amount is ordered to be refunded to GSECL being the amount of import duty paid by it on such imports, it is reasonable and bona fide believed, in view of the terms and conditions of the contract entered into between GSECL and the petitioner, that it would claim the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner and no cause of action has, at present, arisen within the jurisdiction of this Court. According to Mr. Raval, even from the cause title of the present petition, it would be clear that petitioner has its registered office at Bombay which is beyond the territorial jurisdiction of this Court, and thus, if the cause title is perused, both the respondents are not situated within the territorial jurisdiction of this Court. According to Mr. Raval, by simply mentioning District Vadodara in the cause title, the petitioner has instituted the present petition. 9. Mr. Ghosh, the learned advocate appearing on behalf of the petitioner, has, on the other hand, strongly opposed the aforesaid preliminary objection raised by Mr. Raval. Mr. Ghosh contends that his client had filed SCA No. 2569 of 201 which was disposed of order dated 26th June 2013 by another Division Bench and the issue in the aforesaid writ-application was whether the Joint Director General of Foreign Trade had the power to withdraw the approval letter allowing the benefit of duty drawback once approved by him. Mr. Ghosh contends that the petitioner had also challenged in the said petition the existence of the Policy Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re this Hon'ble Court or any other High Court or Supreme Court of India praying for the specific relief prayed herein below. According to Mr. Ghosh, the same is a true and honest declaration in view of the reliefs prayed for in the aforesaid writ petition, and the petitioner cannot be said to have suppressed any material fact concerning the ultimate relief prayed for before the Hon'ble Court in the present petition. 9.2 Mr. Ghosh further contends that GSECL's claim for duty drawback was denied by Respondent No.2 and the the subject matter of Special Civil Application No. 15706 of 2011 pertains to the equipment purchased and imported by them. According to Mr. Ghosh, the petitioner has no role or interest into the duty drawback claim of GSECL with respect to such imports and consequently, the allegation that that the present petitioner is substantially and vitally interested in those proceedings, inasmuch as, if duty drawback is ordered to be granted to GSECL by the High Court, then the present petitioner would claim the reimbursement of such amount from GSECL demonstrates lack of knowledge of facts and the law on the part of the deponent. Mr. Ghosh further contends t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench by directing the DGFT to dispose of the representation afresh. 11. It is now well-settled law that a citizen, even after making payment of tax on demand by either misinterpretation of the statutory provision or under unconstitutional provision or under mistake of law, can subsequently challenge the inherent lack of jurisdiction on the part of the said State authority to demand tax, and if such a citizen succeeds, the Court can, in an appropriate case, direct refund of the amount which had been collected by the state authority having no jurisdiction. There are instances where after payment of tax by an assessee, on his prayer, the provisions of imposition of tax has been held ultra vires the Constitution of India and in such a case, the subsequent proceedings for annulment of the proceedings under which the tax was collected cannot be dismissed on the sole ground of payment of tax by the petitioner inasmuch as there cannot be a waiver of constitutional rights of mandatory character or fundamental rights. The only exception to this principle is where the assessee has passed on the burden of tax to the third parties i.e. the consumers. (See MAFATLAL INDUSTRIES LTD AND OTHERS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he resolution on the surmise that money might have been spent. Illegality is incurable. 13. We now propose to deal with the two decisions on this question cited by Mr Raval, namely, that of BHASKAR LAXMAN JADHAV AND ORS. VS. KARAMVEER KAKASAHEB WAGH EDUCATION SOCIETY AND ORS. reported in 2013 AIR SCW 34 and that of P.G.F. LTD. VS. UNION OF INDIA reported in 2013 (0) GLHEL-SC 53925. 13.1 By relying upon the decision in the case of Bhaskar Laxman Jadhav (supra), particularly paragraph 46, Mr Raval strenuously contended that it is not for a litigant to decide what fact is material for adjudicating a case and what is not material and it is an obligation of a litigant to disclose all the facts of a case and leave the decision making to the Court. In this case, according to Mr Raval, the petitioner cannot contend that he thought that the existence of earlier litigation and directions contained therein are not material and, for that reason, he was entitled not to mention such fact. Mr Raval contends it was the duty of the petitioner to give details of the earlier litigation and then it is for the Court to decide whether this Court will take into consideration such fact. 13.2 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, came to the conclusion that the said provision is valid. In the above context, the Supreme Court in paragraphs 31 and 32 made the following observations upon which Mr Raval has placed strong reliance :- 31. Before adverting to the various contentions raised in challenging the vires of Section 11AA of the SEBI Act, we feel that it is worthwhile to state and note certain precautions to be observed whenever a vires of any provision of law is raised before the Court by way of a writ-petition. It will be worthwhile to lay down certain guidelines in that respect, since we have noticed that on very many occasions a challenge to a provision of law, as to its constitutionality is raised with a view to thwart the applicability and rigour of those provisions and as an escape route from the applicability of those provisions of law and thereby create an impediment for the concerned authorities and the institutions who are to monitor those persons who seek such challenges by abusing the process of the Court. Such frivolous challenges always result in prolongation of the litigation, which enables such unscrupulous elements who always thrive on other peoples money to take advantage of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peration of the provision vis- -vis the State and alleged extent of sufferance by the person who seeks to challenge based on the alleged invalidity of the provision with particular reference to the vires made. Even if the writ Court is of the view that the challenge raised requires to be considered, then again it will have to be examined, while entertaining the challenge raised for consideration, whether it calls for prevention of the operation of the provision in the larger interest of the public. We have only attempted to set out some of the basic considerations to be borne in mind by the writ Court and the same is not exhaustive. In other words, the Writ Court should examine such other grounds on the above lines for consideration while considering a challenge on the ground of vires to a Statute or provision of law made before it for the purpose of entertaining the same as well as for granting any interim relief during the pendency of such writ petitions. For the above stated reasons it is also imperative that when such writ petitions are entertained, the same should be disposed of as expeditiously as possible and on a time bound basis, so that the legal position is settled one w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed against them. According to the Supreme Court, the appellants deliberately and intentionally concealed those facts. In these circumstances, the Supreme Court held that the appellants had not come forward with clean hands and even in their application for setting aside the order, they have not candidly disclosed all the facts that they were aware of such proceedings and were represented by a counsel. In view of such non-disclosure, the Supreme Court held that the DRT rightly dismissed the application, and the High Court rightly refused to interfere with the DRT s order and since the defendants had not come before the Supreme Court with clean hands, interference in exercise of equitable jurisdiction under Article 136 is not called for. In the case before us, we have already found that there no suppression of any material fact and thus, the said decision cannot have any application to the facts of the present case. 15. In the case of K.D. SHARMA vs. STEEL AUTHORITY OF INDIA LIMITED AND OTHERS reported in (2008) 12 SCC 481, where the petitioner made false statement and concealed material facts and mislead the Court, the apex Court held that in such a case, the court may dismiss t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 4 of the Land Acquisition Act, 1894, land measuring 34,070 Acres including land of appellant foundation was sought to be acquired for planned development of Delhi which excluded certain categories of land. Clause (d) of the said notification excluded the land for graveyards, tombs, shrines and the land attached to religious institutions and wakf property. The objections by the appellant before the competent authority were rejected and the appellant thereafter filed several cases in the High Court and the Supreme Court. In the proceedings before the Supreme Court, the appellant failed to mention about the large number of cases filed by him challenging the acquisition, grounds on which the challenge was founded and the orders passed by the High Court and the Supreme Court. The appellant also suppressed the fact that after the dismissal of the first appeal by the Division Bench, possession of the land was taken by the Land Acquisition Collector on 13th July 2001 and transferred to the Development Authority. In such circumstances, the Supreme Court held that a person who does not come to the court with clean hands is not entitled to be heard on merits of his grievances, and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny merit. There is no dispute that the basis of this writ-application is the action of the respondent No.2 in invoking the provisions challenged in this application in respect of transactions arising out of the Vadodara Office of the petitioner, and thus, the cause of action has definitely arisen within the State of Gujarat and on that basis, the petitioner can challenge the want of authority on the part of the respondent No.2 in exercising the so-called jurisdiction. Even in the earlier writ- application before this High Court, when the petitioner challenged the order on merit, the order was set aside and the matter was remanded back to the Respondent no. 2. Thus, the absence of territorial jurisdiction was not raised by the Respondents in the earlier proceedings nor have they challenged the order passed by the said Division Bench setting aside the order impugned. We, therefore, overrule even the second objection raised by Mr. Raval as regards want of territorial jurisdiction. 23. We now propose to enter into the question whether para 2.3 of the FTP is unconstitutional and ultra vires the FTDR Act and whether Para 8.3.6 of the HOP is ultra vires the FTDR Act as well as FTP a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by it by notification in the Official Gazette. Section 6. Appointment of Director General and his functions. - (1) The Central Government may appoint any person to be the Director General of Foreign Trade for the purposes of this Act. (2) The Director General shall advise the Central Government in the formulation of the Foreign Trade Policy and shall be responsible for carrying out that policy. (3) The Central Government may, by Order published in the Official Gazette, direct that any power exercisable by it under this Act (other than the powers under sections 3, 5, 15, 16 and 19) may also be exercised, in such cases and subject to such conditions, by the Director General or such other officer subordinate to the Director General, as may be specified in the Order. Section 15. Appeal - (1) Any person aggrieved by any decision or order made by the Adjudicating Authority under this Act may prefer an appeal, - (a) where the decision or order has been made by the Director General, to the Central Government; (b) where the decision or order has been made by an officer subordinate to the Director General, to the Director General or to any officer superior to the Adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be varied under this section so as to prejudicially affect any person unless such person - (a) has, within a period of two years from the date of such decision or order, received a notice to show cause why such decision or order shall not be varied; and (b) has been given a reasonable opportunity of making representation and, if he so desires, of being heard in his defence. Section 19. Power to make rules. -- (1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :- (a) the manner in which and the conditions subject to which a special licence may be issued under sub-section (2) of section 8; (b) the exceptions subject to which and the person or class of persons in respect of whom fees may be levied and the manner in which a licence, certificate, scrip or any instrument bestowing financial or fiscal benefits may be granted or renewed under sub-section (1) of section 9; (c) the class or classes of goods (including the goods connected wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses agree that the rule or the Order should not be made, the rule or the Order, as the case may be, shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or the Order. 25. It will also be profitable to refer to para 2.3 and 2.4 of the FTP, Para 8.3.6 of the HOP and Para 7 of the declaration attached with ANF-8 form, which are quoted below- Para 2.3 of the FTP: 2.3 [a]. The decision of DGFT shall be final and binding on all matters relating to interpretation of policy, or provision of HBP v1, HBP v2 or classification of any item for import/export policy in the ITC (HS). [b]. A Policy Interpretation Committee (PIC) may be constituted to aid and advice DGFT. Para 2.4 of the FTP: DGFT may, specify procedure to the followed by an exporter or importer or by any licensing / regional authority or by any other authority for purposes of implementing provisions of FT (D R) Act, the Rules and the Orders made there under and FTP. Such procedures, or amendments if any, shall be published by means of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed for the purpose of implementing provisions of FTDR Act, the Rules and the Order and such procedures or amendments, if any, shall be published by means of public notice. 26.4 In exercise of such power conferred under Para 2.4 of the FTP, the DGFT has specified HOP through Public Notice No.1 [RE- 2012]/2009-2014 on 5th June, 2012 which is in the form of an administrative guideline. 26.5 According to Para 8.3.1 of the HOP, to claim duty drawback benefits, a claimant has to fill up ANF-8 form and Para 7 of the declaration of ANF-8 form demands an undertaking from the claimant that in case of re-determination and re-verification, the claimant shall refund the amount paid in excess. It further appears that Para 8.3.6 of the HOP provides that subject to the procedures laid down in the HOP, Customs and Central Excise Duty Drawback Rules, 1995 shall apply mutatis mutandis to deemed exports. 27. In the above context, Mr Ghosh, the learned advocate appearing on behalf of the petitioner, strenuously contended that the aforesaid provisions, namely, Para 2.3 of the FTP, Para 8.3.6 of the HOP and Para 7 of the ANF-8 form are in gross violation of Article 14 and 19[1] [g] read with A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Mr Raval that the Respondent No.2 is authorized to incorporate the duty drawback Rules by reference, it would amount to acceptance of the proposition that the Respondent No.2 is authorized to deal with under the FTDR Act, the similar matters relating to duty and tax refunds as provided under Section 75 of the Customs Act, Section 37 of the Central Excise Act and Section 93A read with Section 94 of the Finance Act, 1994 although not authorized under the FTDR Act. We are in agreement with Mr Ghosh, the learned advocate for the petitioner, that the conferment of such power to the Respondent No.2 to adopt the duty drawback rules without any power to legislate either expressly or otherwise would amount to permitting the levy or collection of tax without authority of law in violation of Article 265 of the Constitution of India. 30. We find that the power granted to the Respondent No.2 under Para 2.4 of the FTP is to lay down the procedure to be followed by an exporter or by any licensing/regional authority or by any other authority for the purposes of implementing provisions of FTDR Act, Rules and the orders made there under and FTP and, therefore, those by necessary implicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the goods, services and technology with such exceptions, modifications and adaptations, as may be specified by it by notification in the Official Gazette. 32. Section 15 of the FTDR Act provides for Appeal and, according to the said section, any person aggrieved by any decision or order made by the Adjudicating Authority may prefer an appeal where the decision or order has been made by the Director General, to the Central Government; or where the decision or order has been made by an officer subordinate to the Director General, to the Director General or to any officer superior to the Adjudicating Authority authorized by the Director General to hear the appeal within a specified period mentioned therein. The said Section, however, gives power to the Appellate Authority to condone the delay in preferring the appeal on sufficient cause being shown. The said section puts certain other restrictions on preferring the appeal. 32.1 Section 16, on the other hand, authorizes the Central Government, in the case of any decision or order made by the Director General, or the Director General in the case of any decision or order made by any officer subordinate to him, to act on its own m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticular assessment or to dispose of a particular case in a particular manner; or [b] so as to interfere with the discretion of the Commissioner of Central Excise [Appeals] in the exercise of his appellate functions. xx xx xx Section 151A of the Customs Act, 1962. Instructions to officers of customs. - The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the classification of goods or with respect to the levy of duty thereon or for the implementation of any other provision of this Act or of any other law for the time being in force, in so far as they relate to any prohibition, restriction or procedure for import or export of goods issue such orders, instructions and directions to officers of customs as it may deem fit and such officers of customs and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board : Provided that no such orders, instructions or directions shall be issued- [a] so as to require any such officer of customs to make a particular assessment or to dispose of a particular case in a particular manner; or [b] so as to interf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or claim and deal with the same on merits in accordance with law. [c]. The Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order for reasons to be specified therein, relax any requirement contained in any of the provisions of Chapter IV or Chapter VI-A where the assessee has failed to comply with any requirement specified in such provision for claiming deduction there under, subject to the following conditions, namely:- (i). the default in complying with such requirement was due to circumstances beyond the control of the assessee; and (ii). the assessee has complied with such requirement before the completion of assessment in relation to the previous year in which such deduction is claimed: Provided that the Central Government shall cause every order issued under this clause to be laid before each House of Parliament. (Emphasis supplied by us). 34.1 Mr. Ghosh points out in the aforesaid three Acts, a similar provision has been made by giving power to the concerned Board to issue order or instruction or directions to the subordinate authorities for proper administra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared by the Supreme Court is binding on all the Courts within the territory of India, it necessarily follows that such law is binding on all Tribunals and authorities and also upon the High Courts. Similarly, Article 226 of the Constitution, on the other hand, has vested the High Court with the authority of judicial review of all judicial or quasi judicial adjudication made within the territorial limit of the High Court. If we accept the submissions of Mr. Raval that the interpretation given by the respondent No.2 even in a matter relating to quasi judicial adjudication affecting the right of a citizen will have overriding effect, in that event, even the law declared by the Supreme Court or various High Courts will lose its authority on a subject covered by the FTDR Act and FTP. We are, thus, unable to accept such contention of Mr. Raval that the interpretation given by the respondent No.2 will have overriding effect upon the decisions of the Supreme Court or various High Courts while making judicial review of a decision passed by an authority under the FTDR Act. 37. We, therefore, hold that the interpretation given by the respondent No.2 in terms of Paragraph 2.3 of the FTP, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, it cannot create any additional right in favour of the respondent no. 2, apart from the right created under the Act itself. 38.3 In the case of STATE OF KERALA AND OTHERS VS. M/S TRAVANCORE CHEMICALS MANUFACTURING CO. ANR. reported in AIR 1999 SC 230, a question arose whether the provision contained in Section 59A of Kerala General Sales Tax Act,. 1963 was ultra vires the provisions of Article 14 of the Constitution of India. According to the provisions contained in Section 59A, if any question arises as to the right of tax leviable under the said Act on the sale or purchase of any goods, such question should be referred to the Government for decision and the decision of the Government thereon shall, notwithstanding any other provision of the said Act, be final. In the above context, the Supreme Court made the following observations:- 13. Plain reading of Section 59A shows that if any question relating to the rate of tax leviable under the Act on any goods is referred to the Govt. then its decision thereon, notwithstanding any other provision in this Act is final. This section does not indicate as to who can make a reference to the Govt. There is no obligation on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the FTP should be read to this effect that the interpretation given by the respondent No.2 as provided therein will not be binding upon the Supreme Court or High Courts while making judicial review of any decision taken by the adjudicating authorities under the FTDR Act and in the absence of any such interpretation by the High Courts or the Supreme Court on a particular point, the same will be binding upon the authorities under the Act. 39.1 We further hold that Para 8.3.6 of the HOP, by which the Customs and Central Excise Duty Draw Back Rules 1995 has been adopted, is ultra vires the provisions of the FTDR Act which has not conferred such power upon the respondent No.2, but it is only the Central Government which can in exercise of its power under Section 19 of the FTDR Act by issuing appropriate notification in the official Gazette and after complying with the requirement of the said Section 19 make appropriate rules for carrying out the provisions of the above Act and in the process, may make rules similar to the ones indicated in the Customs and Central Excise Duty Draw Back Rules. 39.2 Similarly, we also hold that the Para 7 of the declaration attached with ANF-8 form ..... 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