TaxTMI 
TaxTMI 
1961 (8) TMI 27
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.... export has been prohibited or restricted under s.19 of the Sea Customs Act. Exercising authority under s.3 of the Imports and Exports (Control) Act, 1947, the Central Government issued notifications from time to time prohibiting, restricting or otherwise controlling the export and import of diverse commodities. By a consolidated order dated December 7, 1955, known as the Imports (Control) Order, 1955, restrictions on the import of certain goods were imposed by el. 3 of the said order. By el. 3, it was provided that save as otherwise, provided in the order, no person shall import any goods of the description specified in Schedule I, except under, and in accordance with, a licence or a customs clearance permit granted by the Central Government, or by an officer specified in Schedule II. For implementing the scheme of controlling imports, diverse provisions were made in cls. 3 to 11 of the Imports (Control) Order. The Government of India makes known its import policy every six months by issuing in the Government Gazette the procedure and the conditions for eligibility of licences and for the grant of import licences. This policy is published for the use of the public in a hand-boo....
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..... 3,03,490.93 np. respectively for the months of February and March 1959. The petitioners claimed that they had, pursuant to the Export Promotion Scheme, exported artsilk goods to Singapore and had earned net foreign exchange of the value of Rs. 7,07,709.55 np. and that they were entitled to import licences for artsilk yarn of that amount. In September 1959, the petitioners were informed by the Assistant Controller of Imports and Exports that a consolidated licence for the months of February and March, 1959 was granted to them for import of artsilk goods of the value of Rs. 3,19,354/-. It appears that the Government of India, having come to learn of certain malpractice by the importers of artsilk yarn, while suspending the Export Promotion Scheme as from March 9, 1959, announced that applications which were pending with the port licensing authorities will be scrutinised by a Committee and in May 1959, the Government of India appointed a Committee for verification of the value of good exported. The petitioners appeared before the Committee and furnished documentary evidence in support of their claim for 100% of the rupee equivalent of the cloth exported. The Committee accepted as....
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.... of the general public on imports has accordingly not been denied: nor has the authority of the 'State to issue the Imports (Control) Order, 1955 in exercise of the powers conferred by the Imports and Exports (Control) Act providing for imposition of restrictions by permitting import of certain goods only in accordance with,,licences or customs permits granted by the Central Government,, been challenged. It was suggested. somewhat faintly by Mr. Viswanatha Sastri on behalf of the petitioners that the power granted under c 1. (3) of the Imports (Control) Order, 1955 was uncanalised power in the matter of fixing percentages and to that extent, the authority imposed an unreasonable restriction on the freedom to carry on business. But the authority to grant or refuse to grant licences is conferred upon high officers of the State and the grant of licences is governed by the Import Trade Control Policy which is issued from time to time and detailed provisions are made in the Imports (Control) Order getting 'out the grounds on which licences may be refused, amended, suspended or cancelled (see cls. 6 to 9 of the Order). Provision to afford a bearing to the licence before action is taken u....
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....e equivalent" power to fix arbitrarily a percentage of the value of the goods exported for awarding an import licence is not granted. In granting a licence to the petitioners for Rs. 3,19,354/-, has the authority been exercised arbitrarily or is it supported by some reasonbly discernible principle? Ram Murth Sharma, Deputy Chief Controller of Imports and Exports in his affidavit stated that of the Export Promotion Scheme wrongful advantage was taken by some exporters of artsilk fabrics : it was found by the Government of India that invoice values or artificial silk fabrics were inflated. by the exporters by more than 100% of the value with the object of exporting "speculative" commodities like artificial silk yarn. , Sharma stated that ",as against 381 thousand yards of artificial silk fabrics exported during the period January-June, 1957 at a value of about Rs. 456 thousand i.e., at about Rs.2-0 L. per yard the merchants sought to show the rise in price for the export of such goods during October-March 1959 at Rs. 2-9-0 per yard so that for 986 thousand yards exported, the invoice value shown was 28,799 thousand rupees, even though the actual price of the goods in the wholesale....
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....the foreign country was only a "'sister concerns of the exporting house, and the exporters adopted the expedient of inflating the price with the object of adjusting the excess value received by them. It appears therefore that some exporters under cover of the Export Promotion Scheme by inflating the prices were found not only to import speculative varieties of goods for very much larger values than the real prices justified, but were suspected by the authorities even to repatriate foreign assets without disclosing the same to the State as required by law. It cannot therefore be said that the power granted to the licensing authorities to grant licences only upto the maximum spec ified in el. 2 of the Scheme is by itself an unreasonable restriction; nor will the notification directing scrutiny of all applications amount to imposing an unreasonable restriction. Counsel for the petitioners however submitted that the Controller had placed no evidence on the record that the petitioners have, for the goods purchased by them in the Indian market, not paid M. 7,67,709.55 np. or that any part thereof represented foreign assets intended to be repatriated contrary to law. Counsel submitted ....
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....itrary decision in arriving at the value of the bush shirt cloth exported for the purpose of recommending the grant of import licence. The contention that the order passed by the Controller granting a licence only for 45% of the value of the goods exported infringes the fundamental right of the petitioners under Art. 19 (1) (g) by imposing an unreasonable restriction cannot therefore be sustained. Does the fact that the petitioners have been granted licence approximately for 45% of the total value of the goods exported amount to discrimination entitling them to protection of Art. 14 of the Constitution ? Under the Export Promotion Scheme, the petitioners have exported artsilk goods of the value of Rs. 7,07,709.55.nP. and may in the normal course have been entitled to import licence for 100% of the value of the goods exported unless there was a reduction in the value of the licence for imports on account of certain circumstances such as general deterioration of the foreign exchange position or necessity to conserve a particular currency or other circumstances justifying a departure from the maxima set opt in cl. 2 of appendix 42 of the Export Promotion Scheme. The reduction may a....
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....as to be taken for the purpose of granting import licences. It is true that in the cases of the other importers Premsukhdass Sitaram, Indian Exporters and Importers Corporation, M/s. Universal Watch Emporium, M/s. Jawahar Knitting Hosiery, M/s. Vastralaya Ltd. and M/s. Agarwala Trading Co., Ltd., the Committee have recommended acceptance of the purchase prices submitted by the exporters in granting import licences. It may, therefore, be assumed that these importers were, given licence for 1000% of the export value of the goods. But the Committee have given reasons which appear to be prima facie good for accepting the claims of these exporters' If, on the materials placed before. them, the Committee were satisfied that there, was some misconduct or under-hand dealing on the part of the petitioners, or that the evidence led before them justified the Committee in holding that the goods exported were not of the value' claimed by the petitioners in their invoices, an order recommending that import licence may be granted for the value of bush shirt cloth computed on the basis of Re.1.50 nP. per yard does not. amount to discriminatory treatment of the petitioners. Article 14 confers a gua....