Import licence valid until cancellation: pre-cancellation imports are not unauthorised merely because fraud-based cancellation comes later.

An import licence obtained by fraud or misrepresentation continues to operate until it is lawfully cancelled, so consignments imported while the licence was still in force are not treated as unauthorised merely because cancellation follows later. Clause 9 of the Imports (Control) Order, 1955 distinguishes cancellation from suspension pending proceedings, indicating that the licence remains effective until cancellation takes effect. Imports completed before cancellation were therefore made under a valid licence and were not in contravention of the import control law, entitling clearance and release of the consignments on payment of lawful dues.

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Issues: Whether consignments imported before cancellation of an import licence could be treated as imported without a valid licence merely because the licence was later cancelled on the ground of fraud or misrepresentation.

Analysis: The imports were made in February 1976 when the import licence was still in force. The later cancellation of the licence in September 1976 could not retrospectively invalidate imports already completed. Clause 9 of the Imports (Control) Order, 1955 recognises cancellation of a licence on grounds of fraud or misrepresentation, and Clause 9(3) separately provides for suspension where cancellation proceedings are initiated, indicating that the licence continues to operate until it is cancelled. A licence obtained by fraud is therefore not non est from inception for the purpose of imports effected before cancellation.

Conclusion: The imports were made under a valid licence and were not in contravention of the Imports and Exports (Control) Act, 1947. The petitioner was entitled to clearance and release of the consignments on payment of lawful dues.

Ratio Decidendi: An import licence obtained by fraud or misrepresentation remains effective until it is lawfully cancelled, and imports made before such cancellation cannot be treated as unauthorised imports without licence.

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