Original policy governs split licence instalments when the authority treats them as one consolidated grant.

Where a licensing authority split one consolidated imprest entitlement into two instalments and calculated both on the same CIF value and export obligation basis under the original policy, the later instalment remained part of the same original grant. The Court found that subsequent public notices changing replenishment rates could not be applied to that instalment, because the authority had not computed it under the amended policy. The impugned demand based on the later notices was unsustainable, and the show cause notice and licensing orders were quashed.

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Issues: Whether the second instalment of the imprest licence, issued after the public notices modifying replenishment entitlements, was governed by the amended policy or by the unamended policy applicable when the licence application was made and the first instalment was issued.

Analysis: The licence application was made for a consolidated entitlement, but the authority itself issued the licence in two equal instalments. The first instalment was issued before the public notices, while the second instalment, though issued later, was found to have been calculated on the same CIF value and export obligation basis as the first instalment, reflecting the unamended AM-88 policy. The record showed that the authority did not compute the second instalment on the basis of the amended replenishment rates introduced by the later public notices. On that undisputed material, the Court held that the second instalment was a continuation of the original licence arrangement and could not be treated as governed by the subsequent amendments.

Conclusion: The second instalment was held to be governed by the unamended policy, and the impugned demand based on the later public notices could not be sustained in favour of the petitioner.

Final Conclusion: The show cause notice and the orders of the licensing and appellate authorities were quashed, and the writ petition succeeded.

Ratio Decidendi: Where a licensing authority issues instalments of one consolidated entitlement on the basis of the original policy and calculates the obligation accordingly, a later policy amendment cannot be applied to the later instalment if the authority itself treated both instalments as part of the same original grant.

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