Rebuttable presumption in export proceeds law upheld; constitutional challenge to repatriation provisions failed.

Sections 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 were challenged as unconstitutional on the ground that they allegedly compelled an exporter to do an impossible act by presuming non-compliance if export proceeds were not fully repatriated within the prescribed period. The HC held that the provisions did not require performance of an impossible act; they only created a rebuttable presumption against the exporter on failure to realise proceeds in time. Their validity had already been upheld by the Supreme Court, and the Act's placement in the Ninth Schedule attracted Article 31-B protection. The constitutional challenge therefore failed, and the provisions were upheld.

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Issues: Whether Sections 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 were unconstitutional for allegedly compelling an exporter to do an impossible act by creating a rebuttable presumption of non-compliance on failure to repatriate export proceeds in full.

Analysis: The impugned provisions did not compel performance of an impossible act. They only raised a presumption against the exporter when export proceeds were not realized within the prescribed period, and that presumption was rebuttable. The legality of these provisions had already been upheld by the Supreme Court. In addition, the Act had been placed in the Ninth Schedule, attracting the protection of Article 31-B of the Constitution of India. The Court therefore declined to examine the petitioner's other contentions on merits, particularly since the statutory appeal was pending before the Appellate Tribunal for Foreign Exchange.

Conclusion: The challenge to the constitutional validity of Sections 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 failed. The provisions were held valid.

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