Port-specific import restrictions were ultra vires and unconstitutional where they discriminated against traders and cut across a separate licence regime.

Section 3 of the Imports and Exports (Control) Act, 1947 was held not to authorise the executive to confine import of woollen rags, synthetic rags and shoddy wool to specified ports, because the power extends to control of goods and not arbitrary port selection. The restriction was also found discriminatory and unconstitutional under Articles 14, 19(1)(g) and 301, as it imposed an unequal trade burden without a rational basis beyond administrative convenience. The restriction did not apply to imports under Additional Import Licence, since that licence regime was separate and had not been amended. The impugned notice, control order and consequential customs action were therefore unsustainable.

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Issues: (i) Whether the public notice and control order restricting import of woollen rags, synthetic rags and shoddy wool only through Bombay and Delhi ICD were within the power conferred by Section 3 of the Imports and Exports (Control) Act, 1947; (ii) whether the restriction was discriminatory, arbitrary and violative of Articles 14, 19(1)(g) and 301 of the Constitution of India; and (iii) whether the restriction applied to imports made under Additional Import Licence.

Issue (i): Whether the public notice and control order restricting import of woollen rags, synthetic rags and shoddy wool only through Bombay and Delhi ICD were within the power conferred by Section 3 of the Imports and Exports (Control) Act, 1947.

Analysis: The power under Section 3 is directed to prohibition, restriction or control of import of goods of a specified description. It does not authorise the executive to pick and choose particular ports through which alone an otherwise importable item may enter the country. The provision, read as a whole, contemplates regulation of the goods and not the creation of port-specific restrictions for general imports.

Conclusion: The restriction to two ports was without jurisdiction and ultra vires Section 3 of the Imports and Exports (Control) Act, 1947.

Issue (ii): Whether the restriction was discriminatory, arbitrary and violative of Articles 14, 19(1)(g) and 301 of the Constitution of India.

Analysis: The impugned measure created a geographical disadvantage for importers and manufacturers located away from Bombay and Delhi ICD, without any disclosed rational basis for treating those ports differently from other major ports. The burden of the restriction fell unequally on similarly situated traders and operated as a trade barrier, while the justification offered was merely administrative convenience and an asserted difficulty in policing misuse. Such executive action did not satisfy the test of reasonable classification, could not be justified as a reasonable restriction on trade, and offended the constitutional freedom of trade throughout India.

Conclusion: The restriction was arbitrary, discriminatory and unconstitutional, and was invalid under Articles 14, 19(1)(g) and 301 of the Constitution of India.

Issue (iii): Whether the restriction applied to imports made under Additional Import Licence.

Analysis: The conditions governing imports under Additional Import Licence were separate from the Open General Licence conditions. No corresponding amendment was made to the provisions governing Additional Import Licence, and the licence itself contemplated importability of the relevant items for all India ports. The OGL amendment could not, by itself, curtail imports under a distinct statutory licence regime.

Conclusion: The impugned restriction did not apply to imports under Additional Import Licence.

Final Conclusion: The impugned notice, control order and consequential customs action could not be sustained, and the appellants were entitled to relief.

Ratio Decidendi: Section 3 of the Imports and Exports (Control) Act, 1947 authorises control of specified goods, but not the executive selection of particular ports for import in a manner that is arbitrary, discriminatory or inconsistent with a separate licence regime.

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