TMI Blog2018 (11) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... by farmers, they still belongs to lower strata of society. It has become very difficult for them to meet both the ends and therefore, the restriction so imposed can never said to be in violation of Article 19(6) of the Constitution of India. The respondents were justified in imposing restrictions by issuing notifications - there is no reason to interfere with the notifications issued by the Government of India from time to time - petition dismissed. - Writ Petition No.21438/2018 - - - Dated:- 25-10-2018 - S. C. Sharma And Virender Singh JJ. For the Petitioners : Shri Piyush Mathur, learned Senior Counsel with Shri M.S. Dwivedi For the Respondents : Shri Prasanna Prasad, learned counsel ORDER The petitioner before this Court has filed present petition being aggrieved by the order dated 30/08/2018 passed by the Director General of Foreign Trade, New Delhi by which a restriction has been placed upon importing chickpeas. 02-The petitioner's contention is that the petitioner is a Partnership Firm registered under the provisions of Indian Partnership Act and has authorized petitioner No.2 to file the present writ petition. The petitioner Firm is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the DGFT as the petitioner Firm has already entered into the contract for import of Yellow Peas prior to issuance of notification dated 25/04/2018. 07-The petitioner Firm has thereafter, made a request to respondent No.4 for registration of transactions for import of Yellow Peas by submitting an application on 26/04/2018, requesting the registration of contracts and again submitted an application on 03/05/2018 furnishing all minute details of transactions as well as mode of payment of account along with relevant documents. The petitioner Firm has further stated that transactions entered into by the petitioner were genuine transactions and the petitioner Firm has obtained Import Licence and has paid requisite fees for the same. 08-The petitioner has further stated that another trade notice dated 09/05/2018 was issued directing implementation of notification dated 25/04/2018 and also directing the members of trade to provide information with respect of contracts for import of Peas along with all requisite information and to supply supporting documents on or before 18/05/2018 enabling the Directorate to lay down further procedure for import of remaining quantity. 09-The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition No.12627/2018 and notices were issued on 11/06/2018. 13-Further contention of the petitioners is that the petitioner's shipment arrived at Nhavha Shva Port, Mumbai and the goods were not being cleared by the Custom authorities on account of non-availability of Registration Certificate and lots were divided in two parts for which request letter has been submitted by the petitioner Firm on 28/06/2018. The petitioner Firm has further stated that in the meanwhile, the original notification dated 25/04/2018 expired on 30/06/2018 and a fresh notification was issued on 02/07/2018 by which the restriction was extended up to 30/09/2018. 14-The petitioner Firm has further stated that during the pendency of the Writ Petition No.12627/2018, the respondent No.2 has issued Registration Certificates on 10/07/2018 in the name of the petitioner Firm, however, the quantity of Yellow Peas has been reduced arbitrarily to the tune of the amount paid as a part payment and not as the whole quantity as contracted by the petitioners. The petitioner Firm has further stated that an interim order was passed in Writ Petition No.12627/2018, but no reply was filed by the respondents and interim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have raised various grounds while challenging the impugned notification dated 30/08/2018. Their contention is that the impugned action of the respondents in issuing successive notifications without there being any justification and crisis situation in the Indian market is against the aims and object of Exim Policy of 2015-2020 by which the Central Government has to achieve its aim and object by promoting the Exporter and Importer, who are engaged in the trade, however, the Central Government has failed to properly implement the policy, due to which petitioner Firm is facing hardship and huge financial loss to the tune of crores. 19-It is further contended that while issuing original notification on 25/04/2018 by which the amendments were made in the Foreign Trade Policy with respect to Peas from Free to Restricted has been given effect retrospectively, which is impermissible in the eyes of law as the same cannot be made applicable with retrospective effect without having any authority to do the same. All the notifications have been issued by the Director General of Foreign Trade, however, as per Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitution of India. 23-The petitioner Firm has further submitted that it is a settled position of law that a Trade Notice / Circular cannot restrict the scope of a notification by reading into a condition which is not provided in the specific language of the said notification and by using the Trade Notice dated 18/05/2018, the DGFT is not permitted to add, alter or amend the provisions of the notification dated 25/04/2018 issued under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992. 24-The notification issued by the respondent No.2 in terms of the power conferred under the Foreign Trade (Development and Regulation) Act, 1992 is statutory in nature whereas the Trade Notice issued on 18/05/2018 is of an administrative nature and therefore, no new condition condition or restriction can be added or read into the notification dated 25/04/2018 by virtue of issuance of the trade notice as having done so by the respondent No.3 by contravention of the well settled position in law, therefore, the respondents have issued the notification and trade notice against and in violation of the principles of judicial discipline by violating Article 14 and 21 of the Constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the quantity of Yellow Peas which is permissible as per prevailing policy and therefore, there is no reason to refuse the registration of trade contracts of petitioners. The petitioners have paid huge advance payment to the other party in the international market and petitioners are entitled for Registration Certificate in light of notification dated 25/04/2019 and trade notice dated 09/05/2018. The respondents are acting in discriminatory manner. The petitioners, who have already made advance part payment should be treated equally with other traders to whom the respondents have issued Registration Certificate. 28-A detailed and exhaustive reply filed by the respondent Union of India and it has been stated that after Inter Ministerial Consultations among Secretary, Department of Food and Public Distribution, Department of Agriculture, Cooperation and Farmers, Welfare, Department of Consumer Affairs, Department of Commerce, Department of Revenue, Director General of Foreign Trade and Food Corporation of India, it was decided to restrict the import of Peas (Pisumsativum), under Exim Code No.0713 10 00. Accordingly, the Government vide notification No.4 dated 25/04/2018 amended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gram for preparing Besan. Significant quantities of Peas / Yellow Peas are imported into the country and used as an alternative to Gram for preparing Besan. Peas constitute nearly 45-50% of total pulses imported by India and unit value of import of Peas works out to be much below that of Chana / Gram despite the 50% duty, which acts as an incentive to blend Pea Flour with Gram Flour for preparing Besan. 32-Consequently, in order to boost the mandi prices of Chana / Besan Gram the Government decided to restrict the import of Yellow Peas (HS Code 1713 10 00) upto one lakh tons for three months from the date of issuance of notification, to restrict supply of Peas and to create demand for Chana / Gram, which is currently being harvested in various part of the country. Based upon the demands from the trading community and keeping in view the trade impact, the Government took a conscious decision to review the situation and the Inter Ministerial Committee under the Chairmanship of Secretary, Department of Food and Public Distribution with Members of Department of Agriculture, Cooperation and Farmers, Welfare, Department of Consumer Affairs, Department of Commerce, Department of Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the restriction on import of Peas classified under Exim Code 0713 10 00 (including Yellow Peas, Green Peas, Dun Peas and Kaspa Peas), for a further period of three months i.e. till 30/09/2020 til notification No.15/2018-19 dated 02/07/2018. 37-It has been further stated that in pursuance of the order dated 28/06/2018 of the High Court of Judicature at Madras in Writ Petition Nos.15921 to 15924 of 2018 and W. M.P. Nos.18916, 18917, 18919, 18920, 18922, 18923, 18925 and 18926 of 2018 and in compliance with the directions dated 24/08/2018 in W. P. No.21083 and 21084 of 2018 filed by M/s. AMRR Maharaja Dhall Mill, the notification No.15 dated 02/07/2018 extending the restriction on import of Peas classified under Exim Code 0713 10 00 (including Yellow Peas, Green Peas, Dun Peas and Kaspa Peas) till 30/09/2018, was withdrawn, purely on technical reasons, vide notification No.31/2015-202 dated 29/08/2018. 38-In order to remove the technical lacunae, the Central Government, with the approval of Ministry of Commerce and Industry, issued a Trade Notice No.29/2015-2020 dated 30/08/2018, clarifying the following:- It has been observed that there is a confusion about then notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full advance payment be clarified and for that the DGFT had to step in. It stepped in not to amend the notification, as is wrongly understood and argued before us. It is only to remove the doubts expressed by the Regional Authorities and issue the clarification that this trade notice was issued. Its language and particularly that of para 3 is consistent with the notification itself. The argument that the earlier trade notice of 9th May, 2018 makes reference to payment in advance (full or in part) does not cause any confusion and the expression advance payment was always understood to be so is without any merit. What has been provided by the Notification No. 4 is that the expression already imported will include shipment already arrived from 1st April, 2018 till 25th April, 2018 and those shipments backed by irrevocable commercial letter of credit and advance payment made through banking channel before 25th April, 2018. Both these categories will be eligible to be registered with jurisdictional Regional Authority as per para 1.05 of the FTP. In the sense, if the contracted quantity and in terms of a contract between the local importer and the person abroad is specified, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insisting that such contract should also be registered by the jurisdictional Regional Authorities, then, confusion to that extent has been removed by the impugned trade notice. We do not see how we can accept the argument that this amends the Notification and it is a substantive exercise carried out in terms of the statutory powers. We see nothing of this kind resulting from the issuance of the trade notice dated 18th May, 2018 and impugned in this petition. It is but a clarification issued during the implementation of the Notification dated 25th April, 2018. 39. In these circumstances, the transitional arrangement, which has been clarified by this trade notice does not contravene the substantive provisions of the notification or section 3 of the FTDR Act in the Central Government. The Bombay High Court in the aforesaid order, while examining the difference of notification and circular has observed as under:- The issue has been examined in several cases by the Hon'ble Supreme Court and the settled principle was reiterated that a circular cannot take away the effect of the Notification statutorily issued. This principle is also not applicable in the facts and cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.01 of the Foreign Trade Policy, 2015-2020. He has further submitted that the notification is always issued by the Central Government and not by DGFT. DGFT is only signing the notification on behalf of the Central Government and in support of his contention he has referred to the following wordings of the first paragraphs of the notification No.35/2015-20 dated 17/01/2018 and the same reads as under:- ........ the Central Government hereby amends......... His contention is that DGFT, the respondent is merely conveying the decision of the Central Government. 44-Shri Piyush Mathur, learned Senior Counsel for the petitioner has drawn the attention of this Court towards interim orders passed by Jaipur Bench of Rajasthan High Court in S. B. Civil Writs No.12042/2018 (Ganesh Overseas Vs. Union of India and Others) dated 01/06/2018 as well as the interim orders passed by the Gujarat High Court in R/Special Civil Application No.8433/2018 (Kinshuk Overseas Pvt. Ltd. Vs. Union of India) and in R/Special Civil Application No.8492/2018 (Megha Futures Pvt. Ltd. Vs. Union of India) and his contention is that various interim orders have been passed in identical circumstances. 45- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s says that the statutory notifications, if required to be altered or amended in future, then, the same route has to be adopted and no administrative orders/executive instructions and circulars can then be issued so as to interfere with, much less amend the statutory prescriptions. A Notification in this case, according to the learned senior counsel appearing for the parties, has been issued in exercise of the statutory powers conferred by section 3 of the FTDR Act. Therefore, an amendment to the Notification has to be in like manner. Section 3 of the FTDR Act falls in Chapter II. Sub-section (1) says that the Central Government may, by order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. The Central Government, by subsection (2) is empowered to make provision for prohibiting, restricting or otherwise regulating in all cases or in specified classes of cases and subject to such exception, if any, as may be made by or under the order, the import or export of goods or services or technology. Sub-section (3) says that all goods to which any order under sub-section (2) applies shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FTP is subsequently subjected to any restriction or regulation, such export or import will ordinarily be permitted, notwithstanding such restriction or regulation, unless otherwise stipulated. This is subject to the condition that the shipment of export or import is made within the original validity period of an irrevocable commercial letter of credit, established before the date of imposition of such restriction and it shall be restricted to the balance value and quantity available and time period of such irrevocable letter of credit. For operationalising such irrevocable letter of credit, the applicant shall have to register the Letter of Credit with jurisdictional Regional Authority (RA) against computerized receipt, within 15 days of the imposition of any such restriction or regulation. 36. A perusal of this para would indicate as to how clause (a) provides for continuation of a licence/ authorisation, certificate etc bestowing financial or fiscal benefit issued commencement of FTP, 2015-20. Clause (b) says that in case of an export or import that is permitted freely under FTP is subsequently subjected to any restriction or regulation, such export or import will ordinarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t April, 2018 till 24th April, 2018, will be allowed against licence as per procedure to be notified by the DGFT. There was never any intent, therefore, to allow any quantity to be imported exceeding this one lakh metric ton. This is the total quantity which is allowed to be imported between the period from 1st April, 2018 to 30th June, 2018. From this, what is to be subtracted is the quantity already imported from 1st April, 2018 till 25th April, 2018. That will include shipment already arrived and with regard to that part, there was never any dispute nor any confusion in understanding the condition. Thus, the shipment, which has arrived containing this deducted quantity between this 1st April, 2018 till 25th April, 2018, would be understood as the quantity already imported. The next aspect of this is shipments, which are backed by irrevocable commercial letter of credit and advance payment made through banking channel before 25th April, 2018. We do not understand what could be the confusion for a irrevocable commercial letter of credit would back those shipments in regard to which the price has been stipulated in the contract and the price in full is secured by this ICLC. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derstood to be so is without any merit. What has been provided by the Notification No. 4 is that the expression already imported will include shipment already arrived from 1st April, 2018 till 25th April, 2018 and those shipments backed by irrevocable commercial letter of credit and advance payment made through banking channel before 25th April, 2018. Both these categories will be eligible to be registered with jurisdictional Regional Authority as per para 1.05 of the FTP. In the sense, if the contracted quantity and in terms of a contract between the local importer and the person abroad is specified, in relation to that, if the entire payment has been secured in terms of this ICLC or full advance payment, irrespective of whether the delivery of the goods will be made in part, would, therefore, be covered by the expression or words already imported . This is what Policy Condition No. 4 speaks of. It is only, therefore, to take care of the quantity between 1st April, 2018 till 25th April, 2018 and for enabling the deduction or subtraction of that quantity from the total permissible 1 lakh MT that this Notification was issued. This Notification amends Chapter 7 of the ITC (HS) 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, the transitional arrangement, which has been clarified by this trade notice does not contravene the substantive provisions of the notification or section 3 of the FTDR Act in the Central Government. 40. To such an exercise, the principles pressed into service by Mr. Thorat and Mr. Dewani have no application. In the case of Tata Teleservices Ltd. (supra), the Customs Notifications exempting the goods from duty and the issue of their interpretation was under consideration. The circular impugned has imposed a limitation on the exemption Notification, which the exemption Notification itself did not provide. Thus, this was a clear attempt to overreach/override or amend the exemption notification. If an exemption Notification had to be amended, then, the amendment must follow in like manner, namely, by issuing another notification and a circular could not have purported to amend it. Such is not the case in the present matter and this principle, therefore, does not apply at all. 41. In the case of Sandur Micro Circuits Limited (supra), the argument was that a circular was issued by the Central Board of Excise and Customs. There was a Notification of 4th January, 1995 as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by a detailed and exhaustive judgment of the Bombay High Court, the interim orders passed by the other High Courts on the subject does not entitle the petitioner for grant of any relief. 47-The apex Court in the case of Modern Dental College and Research Centre and Others Vs. State of Madhya Pradesh and Others reported in (2016) 7 SCC 353 in paragraph No.60 has held as under:- 60. Another significant feature which can be noticed from the reading of the aforesaid clause is that the State is empowered to make any law relating to the professional or technical qualifications necessary for practicing any profession or carrying on any occupation or trade or business. Thus, while examining as to whether the impugned provisions of the statute and Rules amount to reasonable restrictions and are brought out in the interest of the general public, the exercise that is required to be undertaken is the balancing of fundamental right to carry on occupation on the one hand and the restrictions imposed on the other hand. This is what is known as 'Doctrine of Proportionality'. Jurisprudentially, 'proportionality' can be defined as the set of rules determining the necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lute and is subject to limitations i.e. reasonable restrictions that can be imposed by law on the exercise of the rights that are conferred under clause (1) of Article 19. Those restrictions, however, have to be reasonable. Further, such restrictions should be in the interest of general public , which conditions are stipulated in clause (6) of Article 19, as under: 19. (6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law insofar as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub- clause, and, in particular, nothing in the said sub-clause shall affect the operation of any existing law insofar as it relates to, or prevent the State from making any law relating to- (i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or (ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re no absolute constitutional rights and all such rights are related. As per the analysis of Aharon Barak, two key elements in developing the modern constitutional theory of recognising positive constitutional rights along with its limitations are the notions of democracy and the rule of law. Thus, the requirement of proportional limitations of constitutional rights by a sub- onstitutional law i.e. the statute, is derived from an interpretation of the notion of democracy itself. Insofar as the Indian Constitution is concerned, democracy is treated as the basic feature of the Constitution and is specifically accorded a constitutional status that is recognised in the Preamble of the Constitution itself. It is also unerringly accepted that this notion of democracy includes human rights which is the cornerstone of Indian democracy. Once we accept the aforesaid theory (and there cannot be any denial thereof), as a fortiori, it has also to be accepted that democracy is based on a balance between constitutional rights and the public interests. In fact, such a provision in Article 19 itself on the one hand guarantees some certain freedoms in clause (1) of Article 19 and at the same time em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a purpose are rationally connected to the purpose, and such measures are necessary. This essence of doctrine of proportionality is beautifully captured by Dickson, C.J. of Canada in R. v. Oakes, in the following words (at p. 138): To establish that a limit is reasonable and demonstrably justified in a free and democratic society, two central criteria must be satisfied. First, the objective, which the measures, responsible for a limit on a Charter right or freedom are designed to serve, must be of sufficient importance to warrant overriding a constitutional protected right or freedom Second the party invoking Section 1 must show that the means chosen are reasonable and demonstrably justified. This involves a form of proportionality test Although the nature of the proportionality test will vary depending on the circumstances, in each case courts will be required to balance the interests of There are, in my view, three important components of a proportionality test. First, the measures adopted must be rationally connected to the objective. Second, the means should impair as little as possible the right or freedom in question Third, there must be a proportionality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond the requirement of the interest of the general public. (3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances. (4) A just balance has to be struck between the restrictions imposed and the social control envisaged by Article 19(6). (5) Prevailing social values as also social needs which are intended to be satisfied by the restrictions. (6) There must be a direct and proximate nexus or reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions, and the object of the Act, then a strong presumption in favour of the constitutionality of the Act will naturally arise. 49-In light of the aforesaid and keeping in view the parameters laid down by the Hon'ble Supreme Court and the principles in mind, we are of the opinion that restrictions imposed by Government of India were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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