Export premium levy without statutory authority and quid pro quo held illegal and ultra vires under trade policy rules

A compulsory premium collected through sealed tenders for superfast export entitlements was held unauthorised because it lacked statutory backing and no adequate quid pro quo was shown. The Court applied the principle that a fee or regulatory charge must bear a reasonable relation to a special service or benefit provided to the payer; a charge based on the bidder's capacity to pay, without such correlation, could not qualify. The levy was not sustained under the governing Act or the Export Order and could not be saved as a mere executive guideline. It was therefore illegal, ultra vires, and an unreasonable restriction on the right to carry on trade.

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Issues: Whether the premium levied under the Open Tender System for superfast export categories, and the connected conditions in the policy, were authorised by law and could be sustained as a fee or regulatory charge.

Analysis: The policy required exporters to offer a premium in sealed tenders as a condition for allocation of export entitlement. The levy was compulsory, depended on the bidder's capacity to pay, and had no demonstrated correlation with any special service rendered to the payers. The Court held that a fee requires at least a broad quid pro quo and a reasonable relation between the amount collected and the service or benefit provided. The premium did not satisfy that test, was not authorised by the governing Act or the Export Order, and could not be justified as a mere executive guideline. Since the impost lacked authority of law, it also operated as an unreasonable restriction on the right to carry on trade.

Conclusion: The premium was illegal and ultra vires, and the connected policy conditions were liable to be struck down in favour of the petitioners.

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