Validity of Circular No. 17 (RE-2010)/2009-14 Upheld as Rational Allocation Method

The court upheld the validity of Circular No. 17 (RE-2010)/2009-14 dated 10th February 2011, stating it was an implementation decision of the Foreign Trade Policy and did not require notification in the Official Gazette. The decision to allocate quotas based on export performance in 2009-10 was deemed rational and not discriminatory. The court dismissed the writ petition, affirming that the circular did not amend the policy but outlined the allocation method within the existing policy framework.

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Issues Involved:
1. Validity of Circular No. 17 (RE-2010)/2009-14 dated 10th February 2011.
2. Alleged amendment of the Foreign Trade Policy without proper procedure.
3. Alleged discrimination against exporters without export performance in 2009-10.
4. Difference between policy amendment and implementation decision.

Detailed Analysis:

1. Validity of Circular No. 17 (RE-2010)/2009-14 dated 10th February 2011:

The petitioner challenged the Circular No. 17 (RE-2010)/2009-14 dated 10th February 2011, issued by the Joint Director General of Foreign Trade, which announced an administrative decision to allocate cotton yarn export quotas only to applicants with export performance in 2009-10. The petitioners argued that this circular effectively amended the Foreign Trade Policy without following the procedure prescribed in Section 5 of the Foreign Trade Act, which mandates amendments to be made by notification in the Official Gazette.

2. Alleged amendment of the Foreign Trade Policy without proper procedure:

The court noted that the Foreign Trade Policy can only be amended by notification of the Central Government in the Official Gazette. However, the circular in question did not amend the policy but detailed the implementation of the existing policy. The court emphasized that the procedure for implementation of the Foreign Trade Policy could be published by means of a public notice by the Director General of Foreign Trade and did not require notification in the Official Gazette.

3. Alleged discrimination against exporters without export performance in 2009-10:

The petitioners argued that the circular was discriminatory as it favored exporters with performance in 2009-10, which lacked intelligible differentia. The court held that the selection of existing exporters who continued with exports till 2009-10 was neither arbitrary nor discriminatory. The authorities preferred exporters who had continued with exports, which was a rational differentia and did not violate Article 14 of the Constitution of India. The court further stated that unequal treatment of unequals is permissible.

4. Difference between policy amendment and implementation decision:

The court clarified the distinction between the announcement and amendment of the Foreign Trade Policy and the circulation of a decision related to its implementation. It was held that while the Foreign Trade Policy required notification in the Official Gazette for amendments, decisions regarding its implementation did not. The circular in question was a decision in the implementation of the policy and did not constitute an amendment.

Conclusion:

The court concluded that the circular dated 10th February 2011 was in implementation of the Foreign Trade Policy and did not require notification in the Official Gazette. The decision to allocate quotas to exporters with performance in 2009-10 was not arbitrary or discriminatory. The writ petition was dismissed as the circular did not amend the policy but merely laid down the mode of allocation within the existing policy framework. The court upheld the validity of the circular and dismissed the petition.

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