Import control licence conditions valid, but breach of a licence term was not punishable under the penal provision.

Import licence conditions were upheld as valid where the Chief Controller and an authorised licensing officer acted within the continuing statutory order, and the authentication objection was treated as directory. A condition restricting the imported goods to use in the licence-holder's factory was also sustained as part of the import-control scheme and ancillary to regulating imports. The notifications were not ultra vires, since they were directed to import control and any effect on post-import use was incidental. However, breach of a licence condition did not amount to an offence under Section 5 of the Imports and Exports (Control) Act, 1947, because the section penalised contravention of an order, not mere non-compliance with a licence term. The revisional application was dismissed.

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Issues: (i) Whether the Chief Controller of Imports and the licensing officer were duly authorised to issue the import licence and stamp conditions on it; (ii) whether the condition requiring the imported goods to be used only in the licence-holder's factory and not sold was validly imposed under the statutory orders; (iii) whether the import-control notifications were beyond the competence of the Central Government; and (iv) whether breach of a condition in the licence amounted to an offence under Section 5 of the Imports and Exports (Control) Act, 1947.

Issue (i): Whether the Chief Controller of Imports and the licensing officer were duly authorised to issue the import licence and stamp conditions on it.

Analysis: The notified order continued in force under the Act and authorised the Chief Controller of Imports, and officers specially authorised by the Central Government, to issue special licences. The production of the relevant authorisation and the evidence of authentication showed that the licensing officer acted within authority. The objection based on the form of authentication under the Government of India Act, 1935 did not invalidate the order, as the relevant executive formality was directory.

Conclusion: The authorisation and issue of the licence were valid, and the licensing officer had authority to sign it.

Issue (ii): Whether the condition requiring the imported goods to be used only in the licence-holder's factory and not sold was validly imposed under the statutory orders.

Analysis: The import-control scheme permitted licences to be granted subject to conditions not inconsistent with the Act. The condition was treated as part of the licensing control mechanism and not as an unlawful delegation. The Central Government's power to regulate imports included prescribing the purpose for which imported goods could be used where that control was integral to the grant of import permission.

Conclusion: The condition was validly imposed.

Issue (iii): Whether the import-control notifications were beyond the competence of the Central Government.

Analysis: Applying the pith and substance doctrine, the orders were directed to import control and did not become invalid merely because they incidentally affected the post-import use or disposal of goods. The restriction on use of the imported goods was held to be ancillary to effective control of imports and within the legislative competence of the Central Government.

Conclusion: The notifications were within competence and not ultra vires.

Issue (iv): Whether breach of a condition in the licence amounted to an offence under Section 5 of the Imports and Exports (Control) Act, 1947.

Analysis: Section 5 penalised contravention of an order made or deemed to have been made under the Act. A condition inserted in a licence was held not to be the same as an order made or deemed to be made under the Act, and the section did not expressly criminalise breach of licence conditions. The statutory language was contrasted with other enactments where breach of licence conditions was specifically made punishable.

Conclusion: Breach of the licence condition did not constitute an offence under Section 5.

Final Conclusion: Although the administrative and constitutional objections to the licence and the notifications failed, the prosecution could not succeed because the penal provision did not extend to mere breach of a licence condition; the revisional application was therefore dismissed.

Ratio Decidendi: A breach of a condition imposed in a licence does not amount to contravention of an order under the Imports and Exports (Control) Act, 1947 unless the penal provision expressly makes such breach punishable.

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