Certificate of Origin for Red Sanders logs cannot be denied by State authorities on a conversion beyond their remit.

Forest authorities issuing a Certificate of Origin for Red Sanders wood must confine themselves to verifying the genuineness, procurement and custody of the stock. They cannot refuse certification by insisting that the purchaser first convert log-form stock into value added products, where export policy had already permitted log-form export and that condition was no longer enforceable against the buyer. The Court also noted that foreign trade policy falls within the Union and DGFT domain, so State authorities cannot decide whether an export licence will ultimately be granted. Refusal on these grounds was held arbitrary, discriminatory and beyond jurisdiction, and the authorities were directed to issue the Certificate of Origin.

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Issues: (i) Whether the Principal Chief Conservators of Forests could refuse a Certificate of Origin for Red Sanders wood in log form by insisting that the petitioner first convert the stock into value added products form. (ii) Whether the refusal was arbitrary and discriminatory because the authorities travelled beyond their jurisdiction and took into account matters reserved to the DGFT and Union of India.

Issue (i): Whether the Principal Chief Conservators of Forests could refuse a Certificate of Origin for Red Sanders wood in log form by insisting that the petitioner first convert the stock into value added products form.

Analysis: The stock had been validly sold and delivered to the petitioner in log form, and the genuineness of the stock and transit permits was already acknowledged. The Court noted that the later change in export policy permitted export of Red Sanders wood in log form, and that the State authorities' role was confined to verifying procurement and custody for issuance of the Certificate of Origin. The authorities could not continue to insist on conversion into value added products form, a condition that was no longer within their power to enforce against the purchaser of the goods.

Conclusion: The refusal to issue the Certificate of Origin on the ground that the stock had not been converted into value added products form was unsustainable and against the petitioner.

Issue (ii): Whether the refusal was arbitrary and discriminatory because the authorities travelled beyond their jurisdiction and took into account matters reserved to the DGFT and Union of India.

Analysis: Foreign trade policy lies within the exclusive domain of the Union of India and the DGFT. The State forest authorities were required to limit themselves to the factual verification of stock, procurement, and custody, and could not decide whether an export licence in log form would ultimately be granted. The authorities also treated the petitioner differently from another similarly placed exporter who had been issued a Certificate of Origin for log-form export, which showed arbitrary and unequal treatment contrary to Article 14.

Conclusion: The refusal was arbitrary, discriminatory, and beyond jurisdiction, and the petitioner succeeded on this issue.

Final Conclusion: The impugned proceedings were set aside, and the authorities were directed to issue the Certificate of Origin without insisting on conversion of the stock into value added products form.

Ratio Decidendi: A forest authority issuing a Certificate of Origin must confine itself to the genuineness, procurement, and custody of the stock and cannot refuse certification by enforcing a sale condition or by intruding into the Union's exclusive domain over foreign trade policy.

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