Court Upholds Entitlement to DFIA License Revalidation, Rejects Retrospective Application

The court held that the Public Notice and Policy Circular would not apply retrospectively to DFIA licences issued before their dates. The petitioner's entitlement to the revalidation of DFIA licences issued before the changes was upheld, emphasizing that subsequent policy changes should not affect existing licences. The court deemed the delay in seeking revalidation justified, criticizing the respondents for arbitrary rejection. The impugned order rejecting revalidation was quashed, directing revalidation of the licences for the unused period within four weeks.

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Issues Involved:
1. Whether the Public Notice No.84/2009-14, dated 23.07.2010, and the Policy Circular No.13, dated 31.01.2011, are prospective or retrospective in operation.
2. Whether the petitioner is entitled to the revalidation of DFIA licences issued on 15.04.2010.
3. Whether the delay in seeking revalidation of the DFIA licences is justified.

Issue-wise Detailed Analysis:

1. Prospective or Retrospective Operation of Public Notice and Policy Circular:
The core issue is whether the Public Notice No.84/2009-14 and Policy Circular No.13 are prospective or retrospective. The petitioner purchased DFIA licences on 15.04.2010, which were initially transferable. However, the Public Notice dated 23.07.2010 and Policy Circular dated 31.01.2011 imposed a condition that only the actual user could use the licence. The petitioner contended that the import policy at the time of licence issuance should apply, and subsequent changes should not affect the licences already issued. The respondents did not rebut this contention in their counter affidavit. The court referred to previous judgments, including the case of Hoewitzer Organic Chemical Co. vs. D.G.F.T., which established that the import policy at the time of licence issuance would apply, and subsequent changes would not affect existing licences. The court concluded that the Public Notice and Policy Circular would not apply retrospectively to licences issued before their dates.

2. Entitlement to Revalidation of DFIA Licences:
The petitioner sought revalidation of DFIA licences issued on 15.04.2010, which were affected by the subsequent Public Notice and Policy Circular. The court noted that similar cases had been decided in favor of the petitioner, including the Division Bench judgment of the Punjab and Haryana High Court in Pushpanjali Floriculture Pvt. Ltd. vs. Union of India. The court held that the petitioner's DFIA licences, issued before the Public Notice and Policy Circular, should not be affected by these subsequent changes. The court found the respondents' rejection of the petitioner's revalidation request to be arbitrary and illegal.

3. Justification of Delay in Seeking Revalidation:
The petitioner argued that the delay in seeking revalidation was due to the ongoing challenges against the Public Notice and Policy Circular. The court acknowledged that the petitioner had been actively pursuing the matter through various representations and legal proceedings. The court found that the delay was not due to the petitioner's fault and was justified. The court criticized the respondents for not considering the petitioner's explanations and for rejecting the revalidation request without proper application of mind.

Conclusion:
The court quashed the impugned order dated 08.11.2019, rejecting the petitioner's request for revalidation of the DFIA licences. The court directed the respondents to revalidate the three DFIA licences for the unused period within four weeks from the date of receipt of the order. The court emphasized that the Public Notice and Policy Circular could not retrospectively affect licences issued before their dates and that the petitioner was entitled to the benefits of the licences as initially issued.

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