1975 (3) TMI 131 - SC - Customs

Court dismisses petition challenging import licence issuance, upholds Central Govt authority to modify procedures

J. FERNANDES & CO. Versus THE DEPUTY CHIEF CONTROLLER OF IMPORTS & EXPORTS AND ORS.

The Court dismissed the petition, ruling that the petitioner's import licence was not issued in accordance with the prescribed procedure. It held that the ... letter of credit and all cases relating to firm commitments entered into before 18 December, 1961 ie liberation of Goa - licences issued before liberation between the period 12 February, 1961 and 4 December, 1961. Issues Involved:1. Validity of the import licence No. 47 dated 12 February, 1962.2. Competence of the Central Government to issue directions to the Administrator of Goa.3. Alleged violation of fundamental rights under Articles 14 and 19(1)(g) of the Constitution.4. Application of the Goa, Daman, and Diu (Administration) Ordinance and Act.5. Validity of the revalidation of the licence.6. Authority of the Central Government to modify pre-existing procedures for issuing import licences.Detailed Analysis:1. Validity of the Import Licence No. 47 Dated 12 February, 1962:The petitioner claimed that the licence was issued in accordance with the procedure followed at that time. However, the Central Government had issued directions on 3 January, 1962, stating that imports would be allowed only if letters of credit had been opened before 18 December, 1961, or if goods were shipped before 20 December, 1961. The petitioner's licence did not meet these conditions, and thus, it was not issued in accordance with the prescribed procedure.2. Competence of the Central Government to Issue Directions to the Administrator of Goa:The petitioner argued that the Central Government was not competent to issue directions to the Administrator of Goa except through the President, as per Articles 239 and 240 of the Constitution. However, the Court held that under Article 73(1)(a), the Union Government has the power to issue executive directions to the Administrator of a Union Territory. Therefore, the directions issued by the Central Government were valid.3. Alleged Violation of Fundamental Rights Under Articles 14 and 19(1)(g) of the Constitution:The petitioner claimed that their fundamental rights were violated because six other traders were granted licences while they were not. The Court found that the six licences were issued before the liberation of Goa, while the petitioner's licence was issued after. This classification was based on intelligible differentia and had a rational nexus with the import licence policy, thus not violating Article 14. Furthermore, the Court stated that a wrong application of law does not amount to a violation of fundamental rights under Article 19(1)(g).4. Application of the Goa, Daman, and Diu (Administration) Ordinance and Act:The petitioner relied on sections 3, 4, and 7 of the Ordinance and sections 4, 5, and 9 of the Act to argue that the licence was valid. However, the Court held that these provisions came into force on 5 March, 1962, after the licence was issued. The Portuguese laws were not in force post-liberation, and the Chief Civil Administrator had no authority to issue licences contrary to the Central Government's directions.5. Validity of the Revalidation of the Licence:The petitioner argued that the revalidation of the licence on 28 May, 1962, should confer quota rights. The Court found that the revalidation was merely an extension of the licence's duration and not a correction of any defect. The validation under section 7 of the Ordinance was limited to acts done between 20 December, 1961, and 4 March, 1962, and did not apply to the revalidation.6. Authority of the Central Government to Modify Pre-existing Procedures for Issuing Import Licences:The Court held that the Central Government had the authority to modify or alter pre-existing procedures for issuing import licences after the liberation of Goa, in exercise of its executive powers under Article 73(1) of the Constitution. The Chief Civil Administrator's issuance of the licence without following the Central Government's directions was invalid.Conclusion:The Court dismissed the petition, holding that the petitioner's licence was not issued in accordance with the prescribed procedure, the Central Government had the authority to issue directions to the Administrator of Goa, and there was no violation of fundamental rights. The provisions of the Goa, Daman, and Diu (Administration) Ordinance and Act did not support the petitioner's case, and the revalidation of the licence did not confer any quota rights. The Central Government's authority to modify pre-existing procedures for issuing import licences was upheld.