Court overturns import license amendment without due process, deems confiscation arbitrary. Petitions allowed, parties to proceed lawfully.

The court found that the retrospective amendment of the import license without granting the importer an opportunity was unjust and violated natural justice principles. The initiation of confiscation proceedings for goods imported in accordance with the license terms was deemed arbitrary. Both writ petitions were allowed, setting aside the relevant notices and orders. The parties were directed to proceed according to law for their claims, with the petitioner awarded costs in each case.

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Issues Involved:
1. Jurisdiction to retrospectively amend an import licence.
2. Amendment of an import licence without granting an opportunity to the importer.
3. Legality of initiating proceedings for confiscation of goods.

Summary:

Regarding (i): Jurisdiction to retrospectively amend an import licence

The Foreign Trade (Development and Regulation) Act, 1992, and the Foreign Trade (Regulation) Rules, 1993, do not provide any power to the licensing authority to retrospectively amend a licence. Rule 8 allows the licensing authority to amend a licence to rectify any error or omission, but there is no provision for retrospective amendments. The court found that the respondents' action in retrospectively amending the import licence was without jurisdiction. The argument that the authority has been amending licences retrospectively "in routine" was not supported by any specific provision in the Act or rules. The court emphasized that such wide powers could lead to catastrophic results and held that the action of the respondents was not permissible under the provisions of the Act or Rule 8.

Regarding (ii): Amendment of an import licence without granting an opportunity to the importer

The court held that the amendment of the import licence without granting an opportunity to the petitioner was violative of the principles of natural justice. The petitioner had been granted an import licence on September 8, 1998, and had placed orders and opened letters of credit based on this licence. The retrospective amendment on December 8, 1998, materially varied the conditions of the licence to the disadvantage of the petitioner without any notice or opportunity to be heard. The court noted that the petitioner had undertaken substantial financial commitments and suffered losses due to the respondents' actions. The court concluded that the respondents' actions were arbitrary and did not conform to the basic requirements of fair play.

Regarding (iii): Legality of initiating proceedings for confiscation of goods

The court found that the petitioner had acted in conformity with the terms of the import licence and had imported the goods from one of the countries mentioned in the licence. The certificates from the Government of Pakistan confirmed that the goods had been legally grown. Despite this, the respondents initiated proceedings for confiscation of the goods, which the court found to be arbitrary and unfair. The court noted that the import of the goods was in strict conformity with the provisions of the import licence, and the respondents' actions were not justified.

Conclusion:

Both writ petitions were allowed. The notice dated November 9, 1998, and the order dated December 8, 1998, were set aside. The parties were entitled to proceed in accordance with law regarding their respective claims related to custom duty or losses suffered by the petitioner. The petitioner was also entitled to costs assessed at Rs. 11,000/- in each case.

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