Court upholds differential treatment in licensing under Import & Export Policy, dismisses writ petitions

The Court dismissed the writ petitions challenging the validity of sub-para (10) of para 218 of the Import & Export Policy 1988-1991, finding that the differential treatment between Export Houses granted Additional licences before and after April 1, 1988, was not arbitrary. The Court held that the conditions for granting licences under different policies were materially different, justifying the varied treatment. The petitioners' claim of arbitrary discrimination was rejected, and their petitions were dismissed. However, the Court allowed an extension of six months for the validity of the Additional licences granted under the Import & Export Policy 1978-79.

---

---

Issues Involved:
1. Validity of sub-para (10) of para 218 of the Import & Export Policy 1988-1991.
2. Alleged arbitrary discrimination between Export Houses granted Additional licences before and after April 1, 1988.
3. Applicability and interpretation of previous Supreme Court decisions on the matter.

Detailed Analysis:

1. Validity of sub-para (10) of para 218 of the Import & Export Policy 1988-1991:

The main contention revolves around the validity of sub-para (10) of para 218, which restricts the flexibilities in import for Additional licences issued to Export Houses/Trading Houses prior to April 1, 1988, or issued after April 1, 1988, based on exports made during 1986-87 or earlier periods. The petitioners argue that this provision discriminates against them by denying the benefits available to those issued licences on or after April 1, 1988, under the revised policy.

2. Alleged Arbitrary Discrimination:

The petitioners claim that sub-para (10) of para 218 arbitrarily discriminates between Export Houses granted Additional licences before and after April 1, 1988. They argue that all Export Houses granted Additional licences constitute a single class and should be treated equally. However, the Court finds that there is a material difference between the conditions for granting Additional licences under the Import Policy 1978-79 and the Import Policy 1988-91. The 1978-79 policy granted licences based on the f.o.b. value of exports, while the 1988-91 policy is based on net foreign exchange (NFE) earnings, making the two sets of licences fundamentally different.

3. Applicability and Interpretation of Previous Supreme Court Decisions:

The petitioners rely on previous Supreme Court decisions, particularly D. Navinchandra & Co. case, to argue that they should be treated at par with Export Houses granted licences under the 1988-91 policy. However, the Court clarifies that the decision in D. Navinchandra & Co. does not equate Export Houses granted licences under different policies. The Court emphasizes that the rights of the petitioners under the Additional licences would be governed by the terms of the import policy prevailing at the time of import.

Conclusion:

The Court concludes that the petitioners have not established that they are similarly situated to Export Houses granted licences under the 1988-91 policy. The Court finds that the differential treatment is based on an intelligible differentia and has a rational relation to the object sought to be achieved by the revised policy. The petitioners' claim of arbitrary discrimination is thus unfounded.

The writ petitions are dismissed, but the Court directs that the period of validity of the Additional licences granted to the petitioners under the Import & Export Policy 1978-79 be extended by six months from the date of such extension, allowing the petitioners to avail the licences and import goods under the prevailing Import Policy.

---