Advance import licence revalidation and substitution of banned input upheld after export obligation was fulfilled.

Advance import licence holders who had completed the export obligation were entitled to revalidation and substitution of a banned input with permissible alternative materials. The authorities' refusal, based on the view that the current policy did not permit revalidation beyond eighteen months, was treated as arbitrary and unsupported by reasons, especially where the licence conditions had been fulfilled and the substitute items were not prohibited. The advance licence scheme was treated as a governmental representation acted on by the petitioners to their detriment through export performance, so refusal to revalidate the licence and permit substitution was unsustainable.

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Issues: Whether the petitioners were entitled to revalidation of the advance import licence and substitution of the banned input with permissible alternative materials after fulfilling the export obligation.

Analysis: The petitioners had secured the advance licence under the export policy, completed the export obligation, and sought only substitution because the original item, tallow, had been banned. The authorities refused revalidation and substitution on the ground that the current policy did not permit revalidation beyond eighteen months. The refusal was held to be arbitrary and unsupported by any reason, especially when the petitioners had complied with the licence conditions and the substitute items were not prohibited. The policy underlying the advance licence scheme was treated as a governmental representation on which the petitioners had acted to their detriment by exporting the goods.

Conclusion: The petitioners were entitled to revalidation of the licence and to import the substituted materials in place of the banned item, and the refusal of the authorities was unsustainable.

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