Court Invalidates Restrictions on Import License, Emphasizes Promissory Estoppel

The court declared the notifications dated 25-1-1994 and 29-1-1994 invalid as they unreasonably restricted the petitioner's license, allowing the petitioner to import goods without the additional restrictions. The court emphasized the doctrine of promissory estoppel and the need for restrictions to be reasonable and in the public interest. The petitioner's fundamental right to trade was upheld, and the court ruled in favor of the petitioner, allowing the writ petition and making the rule absolute.

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Issues Involved:

1. Validity of the two notifications dated 25-1-1994 and 29-1-1994.
2. Doctrine of promissory estoppel.
3. Reasonableness of restrictions under Article 19(1)(g) of the Constitution.
4. Public interest as a justification for the notifications.
5. Impact of the notifications on the petitioner's fundamental right to trade.

Issue-wise Detailed Analysis:

1. Validity of the Two Notifications:

The petitioner challenged the validity of the notifications dated 25-1-1994 and 29-1-1994, which transformed Polypropylene Moulding powder/granules into goods on the sensitive list for importation. The petitioner argued that these notifications imposed unreasonable restrictions on his pre-existing Value Based Licence issued on 6-7-1993, which allowed unrestricted import of the goods in question.

2. Doctrine of Promissory Estoppel:

The petitioner relied on the doctrine of promissory estoppel, asserting that the licence issued was a promise permitting the import of goods without restriction. The petitioner contended that he had acted upon this promise by investing in manufacturing and securing export orders. The court referred to the Supreme Court's decision in Assistant Commissioner of Commercial Taxes v. Dharmendra Trading Co., emphasizing that the government must establish a reasonable basis to resile from a promise, which was not demonstrated in this case.

3. Reasonableness of Restrictions under Article 19(1)(g):

The court examined whether the impugned notifications imposed unreasonable restrictions on the petitioner's fundamental right to trade under Article 19(1)(g) of the Constitution. It was noted that any restriction must be reasonable and in the public interest. The court cited Indian Express Newspapers v. Union of India, stating that even legislative actions must pass the test of reasonableness.

4. Public Interest as a Justification for the Notifications:

The respondents failed to provide sufficient evidence to justify the notifications on the grounds of public interest. The court highlighted that the term 'public interest' must be substantiated with specific facts and circumstances. The petitioner argued that the notifications were intended to protect local manufacturers rather than serve the public interest.

5. Impact on the Petitioner's Fundamental Right to Trade:

The court recognized that the impugned notifications significantly altered the petitioner's right to import the goods in question, which was part of his fundamental right to trade. The petitioner had acted on the promise of unrestricted imports, and the notifications caused a detriment by imposing new restrictions. The court concluded that the notifications constituted an unreasonable restriction on the petitioner's right under Article 19(1)(g).

Conclusion:

The court declared that the two impugned notifications dated 25-1-1994 and 29-1-1994 were invalid to the extent they imposed unreasonable restrictions on the petitioner's licence. The petitioner was entitled to import the goods in question as per the original terms of the licence without reference to the additions made to the Sensitive List. The writ petition was allowed, and the rule was made absolute.

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