TaxTMI 
TaxTMI 
2007 (8) TMI 427
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....re accounting for about 12% of the total export of the products. The petitioner had regular dealing with various countries, Dairy Farms in particular, and they entered into agreements with M/s. Unicare International, Bangkok and France International Trade, France, who placed orders with them for supply of SMP on behalf of various buyers interested in purchase of the same by way of import. The petitioner in order to meet international standards as well as proper export so far as Skimmed Milk Products were concerned, made heavy investment in plant and machinery and in fact they obtained loan of Rs.400 lacs from Canara Bank, a Term Loan of Rs.850 lacs, Export Packing Credit of Rs.500 lacs and FDBP / FUBP against Letter of Credit limit of Rs.500 lacs from Union Bank of India and various accounting facilities. Many other organisations had also invested money in the same fashion. Further, according to the petitioner, as per the prevalent practice, the intending agents open an irrevocable Letter of Credit in their favour and thereafter the petitioner executes the order as per the contract entered into between them and in terms thereof. The Government had surplus supply of milk and the pet....
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....42009 dated 9th February, 2007, Exhibit "J" to the petition, imposed a ban on export of SMP, and that too, from retrospective effect till September, 2007 with the result that the petitioner is unable to export their products against their commitments controlled by the above documents. Aggrieved from this Notification, the petitioner, while not really opposing the Notification as far as ban on SMP is concerned, challenged the retrospectivity of the ban and sought permission to fulfill their export commitments to avoid litigation and loss. It may further be noted that during the hearing of this writ petition, vide order dated 16th March, 2007, it was noticed by the Court that the petitioner has a right to approach the Ministry of Commerce in the matter of export of milk powder in order to discharge its existing export obligation which can be examined on a case by case basis. And this Court granted liberty and directed the petitioner to approach the Ministry and the Ministry was required to take a decision adhering to the principles of natural justice and disposing of its representation by a speaking order. In furtherance to this Order of the Court, no order was passed by the Ministry....
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....very commencement of discussion on the merits of the case, we must notice that in paragraph 11 of the reply affidavit filed on behalf of the respondent it is stated as under: "I would like to further add that there is no retrospective restriction in the notification since the Union Finance Minister has made the decision public on 9.02.2007 itself. Therefore, the statement concerning retrospective operation does not apply to the facts of the case. Moreover, the public interest as noted by the Cabinet Committee justifies the issuance of this Notification." We have already noted that the petitioner is not challenging the validity or the correctness of the Notification dated 9th February, 2007 in its entirety and for all other purposes has accepted the same. Thus the limited controversy which needs to be examined by the Court is whether or not the order dated 30th April, 2007 passed by the Respondent in so far as its denial part to the petitioner to fulfill its existing contractual obligation calls for any interference. 7. Learned Counsel appearing for the petitioner contended that the respondent has acted arbitrarily in denying the relief to the petitioner, when heavy investments h....
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....ori be taken away by an amendment thereof. In construing such a prohibitory order, whereas the rule of strict construction must be followed, the interpretation which sub-serves the intention of the Central Government as laid down in the policy as well as in the procedure should be given effect to. A statute as is well known may have to be construed in the light of the subordinate legislations framed thereunder. When subordinate legislation has been framed by the same authority which exercises the power under the policy, the intention of such policy maker must be found out from the words used therein albeit having regard to the rights of the exporters which are sought to be protected thereby. We, therefore, are of the opinion that whereas the judgement of the Gujarat High court must be upheld, that of the Delhi High Court, albeit for different reasons, cannot be sustained." Reliance is also placed on the judgment of the Supreme Court in Mahabir Vegetable Oils (P) Ltd. And another v/s State of Haryana and others, (2006) 3 Supreme Court Cases 620, where the Court clearly enunciated the principles that there could be retrospective effect of the amendment by way of legislation, but dis....
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....contractual obligation against some Letter of Credit would not fall in this category. We are unable to accept this reasoning of the authority in as much as once there was no ban or restriction on export of SMP no permission from any authority would have been required. It falls within the ambit of free sale and the necessary documents for shipping or export of SMP and other milk products would only be by virtue of contract / export document and nothing more. In the entire order it has not been stated as to which document the petitioner has failed to produce or which the Authority expected it to produce. There are concluded contracts between the parties and in fact part of them was implemented as well. Another reason stated by the petitioner was that Skimmed Milk Products is a product taken out of normal milk and/or the normal milk products and there was no ban on export of such items. As such a ban was not justified and in any case would not be made effective retrospectively. May be the Court would not go into such question primarily for the reason that the demand of skimmed milk and its products may be high in domestic market and authorities concerned may have taken decision to ban....
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....4 of the Constitution of India and, therefore, could not form the basis of any right. The observation made in para 8 of that judgment has to be read in that context. Besides, the State Government in that case had no option except to withdraw the notification. It is so observed in that judgment in para 9: (SCC p.352) "The State Government, in view of the decision of this Court had no other option but to place edible oils in the negative List. The questions whether Shree Mahavir Oil Mills has been rightly decided or not and whether it is in conflict with the principles enunciated in Video Electronics are moot. But while the decision stands, the State Government is bound to comply with it." 36. In Kasinka Trading case the notification in question was a customs exemption notification for a fixed period. The judgments in Pournami Oil Mills case and Shri Bakul Oil Industries case were distinguished in the said case on the ground that the notifications in those cases were incentive notifications. It was observed in para 27: (SCC p.291) "Again in Bakul Oil Industries it was the incentive to set up industries in a conforming area that the exemption had been granted and the Court held tha....
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....o explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial review. It is generally agreed that `legitimate expectation' gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words, where a person's legitimate expecation is not fulfilled by taking a particular decision then the decision maker should justify the denial of such expectation by showing some overriding public interest. (see Union of India v. Hindustan Development Corporation). 9. While the discretion to change the policy in exer....
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....t where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14. Equity that arises in favour of a party as a result of a representation made by the State is founded on the basic concept a "justice and fair play". The attempt to take away the said benefit of exemption with effect from 15.11.998 and thereby deprive MRF of the benefit of exemption for more than 5 years out of a total period of 7 years, in our opinion, is highly arbitrary, unjust and unreasonable and deserves to be quashed. In any event the State Government has no power to make a retrospective amendment to SRO No.1729/93 affecting the rights already accrued to MRF thereunder. 44. We do not agree with the submission made by the learned counsel for the respondent State that the subsequent notification was classificatory in nature. That it only removed the doubt which had arisen with reference to "compound rubber" in SRO No.1729/93. Making of "compound rubber" had been accepted to be "manufacture" in the memorandum of understanding entered into between MRF and the Government on 6.10.1993 and the addendum dated 10.4.199....