Court upholds diamond exporters' right to import under Import Policy of 1978-79, emphasizing adherence to regulations

The Court dismissed the writ petition challenging the validity of Show Cause Notices issued to the petitioners, affirming their validity. It clarified that diamond exporters were entitled to import items permissible under the Import Policy of 1978-79 and the prevailing policy at the time. The Court interpreted "whether canalised or otherwise" to require adherence to the canalisation process. While acknowledging the applicability of promissory estoppel against the Government, it found no case for its application in this instance. The Court emphasized adherence to import regulations and directed proceedings to continue in accordance with the law.

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Issues Involved:
1. Validity of Show Cause Notices issued to the petitioners.
2. Entitlement of diamond exporters to import items under the Import Policy of 1978-79.
3. Interpretation of the term "whether canalised or otherwise" in the context of import policies.
4. Application of promissory estoppel against the Government.

Detailed Analysis:

1. Validity of Show Cause Notices:
The writ petition challenges Show Cause Notices dated 21st August 1986, 11th September 1986, and 26th September 1986 issued to the petitioners. The petitioners argued that these notices were inconsistent with the Supreme Court's order dated 18th April 1985, which directed the issuance of Export House Certificates without the requirement of diversification of exports. The Court found no merit in this argument, holding that the subsequent decisions did not deviate from the earlier decision and that the Show Cause Notices were valid.

2. Entitlement of Diamond Exporters:
The Court examined whether diamond exporters were entitled to import items under the Import Policy of 1978-79. The petitioners contended that the order dated 18th April 1985 allowed them to import all items, whether canalised or otherwise, except those specifically banned. The Court clarified that the entitlement was limited to items permissible under the Import Policy of 1978-79 and also under the prevailing Import Policy at the time of import, which in this case was the Import Policy of 1985-88. The Court emphasized that the items had to pass two tests: being importable under both the 1978-79 and 1985-88 policies.

3. Interpretation of "Whether Canalised or Otherwise":
The Court addressed the interpretation of the term "whether canalised or otherwise" used in its order dated 18th April 1985. The Court held that this phrase did not imply that canalised items could be imported directly by the importers ignoring the canalisation process. The Court emphasized that canalisation, a matter of public policy, could not be lightly or inferentially disregarded. The Court stated that the phrase meant that items could be imported directly by the importers through the canalisation organisation if permitted by the prevailing import policy.

4. Application of Promissory Estoppel:
The petitioners argued for the application of the doctrine of promissory estoppel against the Government, citing several cases including Union of India v. Godfrey Philips India Ltd. The Court acknowledged that the doctrine of promissory estoppel is applicable against the Government in its public or executive functions. However, the Court found no case of promissory estoppel made out in this instance.

Conclusion:
The Court dismissed the writ petition, holding that the Show Cause Notices were valid and the petitioners were not entitled to import canalised items directly without following the canalisation process. The Court also dismissed the related writ petitions and directed that the proceedings should continue in accordance with the law. The applications for impleadment were allowed, and the Court reiterated that its decisions are binding on all concerned. The Court emphasized the importance of adhering to the principles of law and public policy in the context of import regulations.

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