Export canalisation through a designated agency upheld as reasonable; cut-off dates, classification, and service charge all sustained.

Statutory canalisation of mica exports through a designated agency was upheld as a reasonable restriction on trade in the public interest, because export regulation and channelisation were treated as a valid policy choice. The cut-off date for treating pre-existing contracts and letters of credit was sustained as workable and non-arbitrary, and the later relaxation was justified by trade hardship. Excluding mica powder from the scheme was held to be a valid classification based on intelligible differentia and a rational nexus with the objective of fostering a developing industry. The service charge collected by the agency was treated as consideration for services, not a tax, so Article 265 was not attracted.

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Issues: (i) Whether the canalisation of mica exports through the Corporation under the import-export control regime was a valid and reasonable restriction on the petitioner's right to carry on business. (ii) Whether the fixation of 24 January 1972, and the later relaxation to 31 March 1972, for treating pre-existing contracts and letters of credit was arbitrary or mala fide. (iii) Whether excluding mica powder from the canalisation scheme created unconstitutional discrimination. (iv) Whether the service charge collected by the Corporation was a tax attracting Article 265 of the Constitution.

Issue (i): Whether the canalisation of mica exports through the Corporation under the import-export control regime was a valid and reasonable restriction on the petitioner's right to carry on business.

Analysis: The export control scheme was framed under the statutory power to regulate, restrict, or canalise exports. Canalisation through a selected agency was treated as a legitimate policy choice in the public interest, not as an acquisition of traders' business or goodwill. The State was entitled to channel exports through a special agency to maintain quality, increase export volume, and regulate trade in the national interest.

Conclusion: The canalisation scheme was valid and amounted to a reasonable restriction; it was in favour of the respondents.

Issue (ii): Whether the fixation of 24 January 1972, and the later relaxation to 31 March 1972, for treating pre-existing contracts and letters of credit was arbitrary or mala fide.

Analysis: A cut-off date had to be fixed to make the scheme workable and to prevent antedated or artificial contracts. The date of opening of irrevocable letters of credit had a rational connection with the object of the scheme, and the relaxation was supported by representations showing hardship and dislocation in trade. The materials did not establish mala fides or arbitrariness.

Conclusion: The cut-off date and subsequent relaxation were valid; the challenge failed.

Issue (iii): Whether excluding mica powder from the canalisation scheme created unconstitutional discrimination.

Analysis: Mica powder stood on a different footing from mica scrap and waste. The State's explanation was that the exclusion was intended to foster a developing and nascent mica powder industry. The classification had an intelligible differentia and a rational nexus with the policy objective.

Conclusion: The classification was valid and did not violate Article 14.

Issue (iv): Whether the service charge collected by the Corporation was a tax attracting Article 265 of the Constitution.

Analysis: The charge was levied by the Corporation for services rendered in implementing the canalisation arrangement. It was not a compulsory exaction by the State in the nature of a tax, but consideration for the commercial services of the Corporation.

Conclusion: The service charge was not a tax and Article 265 was not attracted.

Final Conclusion: The impugned trade notice and the connected export canalisation arrangements were upheld, and the petition was dismissed.

Ratio Decidendi: A statutory export canalisation scheme through a designated agency is constitutionally valid when it serves the public interest, has a rational basis for its cut-off conditions, and is supported by a reasonable classification; a service charge levied for the agency's commercial services is not a tax.

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