TaxTMI 
TaxTMI 
2014 (2) TMI 1013
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....and declare it as null, void ab initio and non-est law. [c] Be pleased to hold that Para 7 of the declaration attached with ANF-8 form read with the provisions of HOP does not grant power to the Respondent No.2 or its subordinates to re-verify or re-determine the duty drawback benefits once such benefits are approved to the claimant. [d] Such further and other relief, order or direction which may be just, fit, proper and equitable in the facts and circumstances of the petition." 2. The case made out by the petitioner may be summed up thus:- 2.1 The petitioner has been claiming "deemed export benefits" on various power projects and, therefore, has an interest in the legality and propriety of various powers exercised by the respondent no 2, the Director General of Foreign Trade [DGFT] and its subordinates in connection with the processing and grant of the deemed export benefit. The respondent no.1 is the Union of India, responsible for the formulation of the Foreign Trade Policy [FTP] under which the deemed export benefits are available to the petitioner. 2.2 Section-3 of the Foreign Trade (Development and Regulation) Act, 1992 ("FTDR Act") empowers the Central Governm....
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....he Respondent No.2 specifies HOP through Public Notice No.1 [RE- 2012]/2009-2014 New Delhi dated 5th June, 2012 which is in the form of an administrative guideline. 2.8 Para 8.3.1 of the HOP provides that to claim duty drawback benefits, a claimant has to fill an ANF-8 form. Para 7 of the declaration of ANF-8 form requires an undertaking from the claimant that in case of re-determination and re-verification, the claimant shall refund the amount paid in excess. 2.9 Para 8.3.6 of the HOP provides that subject to the procedures laid down in the HOP, Customs and Central Excise Duty Drawback Rules, 1995 shall apply mutatis mutandis to deemed exports. 3. In the aforesaid background, according to the petitioner, the aforesaid provisions i.e. Para 2.3 of the FTP, Para 8.3.6 of the HOP and Para 7 of the ANF-8 form are in gross violation of Article 14 and 19[1] [g] read with Articles 246 and 265 of the Constitution of India and the provisions of FTDR Act and the FTP on the following grounds: 3.1 The Respondent No.2 through Para 8.3.6 of the HOP has incorporated by reference the provisions of Duty Drawback Rules mutatis mutandis to the FTP and HOP. The HOP is nothing but an admini....
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....ltra vires the FTDR Act and is in violation of Article 246 and 265 of the Constitution of India. 3.2 The power granted to the Respondent No.2 under Para 2.4 of the FTP is to lay down the procedure and therefore, the same cannot be used to introduce substantive law i.e. Duty Drawback Rules. Therefore, Para 8.3.6 of the HOP is liable to be set aside. 3.3 The FTDR Act or FTP does not grant power to the Respondent No.2 and its subordinates to re-determine or re-verify the deemed export benefits once such benefits have been approved or granted as per the provisions of the FTP. In the absence of power under FTDR Act or FTP, the Respondent No.2 and its subordinates cannot assume quasi-judicial power such as power to re-determine or re-verify under administrative guidelines i.e. Para 7 of the ANF-8 Form. Therefore, Para 7 of the ANF-8 is usurpation of quasi-judicial power by the Respondent No.2 and its subordinates and thus, travels beyond the provisions of the FTDR Act as well as FTP and hence, liable to be struck down. 3.4 Merely because such declaration is required to be signed by the claimant cannot confer power to re-determine and re-verify on the Respondent No.2 and its subo....
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....rolling foreign trade was the Sea Customs Act, 1878. Regarding imports and exports, the Government of India Act, 1935 granted an exclusive power to the Centre to legislate on the subject. But no specific enactment was passed by the Central Legislature. During the Second World War, under the compulsive necessity created by the scarce foreign exchange resources and the acute shortage of shipping space in the Indian ports, a notification under the Defence of India Rules was issued in 1939, bringing under control the import of 68 commodities. Steadily other notifications were issued bringing more items under control. In July, 1943 a consolidated notification was issued covering a wide range of controlled items. With the end of the Second World War, the Defence of India Rules lapsed but the provisions regarding import control instructions were continued by virtue of the Emergency Provisions (Continuance) Ordinance, 1946 which was replaced, in so far as the imports and exports control is concerned, by the Imports and Exports (Control) Act, 1947. It came into force for a period of three years but was extended from time to time. In 1971 it became a permanent statute. By the Imports and Exp....
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.... and has been amended by Act 25 of 2010, being called Foreign Trade(Development & Regulation) Amendment Act, 2010 which is brought into effect by virtue of Notification S.O. 2099 (E) dated 27th August, 2010. Some important provisions of the Statutes which have bearing on the contentions urged in the petition. 4.5 Section 2(a) of the said Act defines "adjudicating authority" to mean the authority specified in, or under section 13. Section 2(d) defines "Director General" to mean the Director General of Foreign Trade appointed under Section 6. 4.6 Section 2(e) defines "import" and "export" respectively as "bringing into, or taking out of, India any goods by land, sea or air". 4.7 Section 2(h) defines "Order" as "any order made by the Central Government under section 3". 4.8 Section 3 enables the Central Government to make provisions for the development and regulation of foreign trade by facilitating imports and increasing exports. It is therefore trite to submit that any policy framed by virtue of exercise of power under Section 3(1) must be so interpreted to further the statutory intention as manifest by virtue of Section 3(1). Similarly, under Section 3(2) Central Gov....
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....lished in the Official Gazette, direct that any power exercisable by it under the said Act (other than the powers under sections 3,5,15,16 and 19) may also be exercised, in such cases and subject to such conditions, by the Director General or such other officer subordinate to the Director General, as may be specified in the Order. However, this very provision makes it clear that powers under Sections 3, 5, 15, 16 and 19 conferred on the Central Government cannot be delegated. That under Section 13 of the Act "adjudicating authority" is empowered to impose any penalty or adjudge any confiscation. This power can be exercised by the Director General as adjudicating authority or subject to such limits as may be specified, by such officer as the Central Government may, by notification in the Official Gazette, authorize in this behalf. 4.12 Only powers which are exercised by the adjudicating authority under Section 13 either by the Director General or subordinate officer empowered by the Central Government are made subject matter of appeal under Section 15(1) of the Act. Provision of sub-section (1) of Section 15 is clear since appeal can be preferred by any person aggrieved by any de....
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....apparent that in every case where question of doubt arises as regards interpretation of the provisions contained in FTP or classification of any item in ITC (HS) or HOP, Vol. I or II or Schedule of DEPB rates including content, scope or issue of an authorization there under, the said question or doubt shall be referred to the DGFT whose decision thereon shall be final and binding. The above power is wide and untrammelled to interpret any provision of the FTP. It is, therefore, within the jurisdiction, power and authority of the DGFT to interpret the provisions of FTP. In other words, maintaining the provision of the Policy as it is, power conferred on the DGFT under para 2.3 in regard to interpretation is wide enough to determine the eligibility of any person claiming hereunder. 4.16 Para 2.4 of the FTP provides that DGFT may specify procedure to be followed for an exporter or importer or by any licensing or any other competent authority for the purpose of implementing the provisions of the Act, the Rules and the Orders made there under and FTP. Such procedures shall be published by means of a Public Notice, and may, in like manner, be amended from time to time. Bare perusal of ....
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....ly avers in paragraph 5 that the petitioner has been claiming deemed export benefits and, therefore, has an interest in the legality and validity of various powers exercised by the Director General of Foreign Trade (respondent no.2) and its subordinate officers that are processing the applications for grant of deemed export benefit and by saying so the petitioner has explained the filing of the present petition, challenging the vires of para 8.3.6 and para 2.3 of the Foreign Trade Policy, on the apprehended alleged correctness and soundness of the proposed action of the respondents pursuant thereof. Thereafter, the petitioner has further averred in paragraph 11 that it is likely to be affected by the assumption of jurisdiction by the respondent no.2 and its subordinates within territorial limits of this Court. All these averments apart from being wholly mischievous suffer from suppression of material facts that the petitioner had instituted Special Civil Application No.2569 of 2013, inter-alia, praying for the following relief:- "(a) To issue a writ of order / direction, setting aside impugned order dated March 21, 2011 passed by the respondent no.3 and order dated April 13, 201....
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....mind and without in any way being influenced by the earlier order and pass speaking order thereafter within a period of two weeks from the actual date of personal hearing and communicate such decision forthwith thereafter. This Court has observed in para 6.0 (iv) that all contentions and defence which would be available to the respective parties, more particularly the petitioner, are kept open to be dealt with and considered by the Director General of Foreign Trade in accordance with law and on merits for which this Court has not expressed anything in favour of either of the party. This Court has also observed in para 6.0(v) that in case of any adverse decision it will be open for the petitioner to challenge the same before appropriate court / forum which shall be considered in accordance with law and on merits. This order has also been suppressed from this Court. The Petitioner has suppressed the vital facts that in compliance of the above directions, it has submitted its fresh representation and hearing thereof is underway. 4.22 While disposing of the above said Special Civil Application No.2569 of 2013, this Court has in paragraph 2 of the decision dated 26th June, 2013 obser....
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....ble extra-ordinary and highly prerogative writ jurisdiction of this Court by suppressing all these relevant material facts and circumstances. Such a conduct of the petitioner by itself is sufficient to decline the exercise of discretionary and equitable jurisdiction of this Court. 4.24 There is yet another mala fide intention of the petitioner in preferring present petition. The petitioner - Alstom India had been appointed as an independent contractor in respect to the erection and commission of a Non-Mega Power Project of Gujarat State Electricity Corporation Limited (GSECL). That a dispute about eligibility of GSECL, who had by itself is an importer, having itself imported several goods and paid custom duty at a concessional rate of duty is pending before this Court as regards eligibility to claim Deemed Export Benefits in regard to the said transaction. The said amount is sought to be claimed as a duty drawback on the ground that such import of goods by said GSECL in view of a contract being given through international competitive bidding ( ICB ) to Alstom is eligible for consideration and grant of deemed export benefit under Chapter VIII of the present Foreign Trade Policy. ....
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....r petition being Special Civil Application No.2569/13 and the order of this Court dated 26th June, 2013 clearly reflects the intention of the petitioner and the lack of bona fides. The cause of action for the petitioner to challenge the Foreign Trade Policy would arise only and only if there is a decision which is adverse to the petitioner if decided by the Director General of Foreign Trade, in compliance of the directions contained in the order dated 26th June, 2013 rendered in Special Civil Application No.2569 of 2013. At present, the Director General of Foreign Trade is hearing the proceedings and is cognizant of the proceedings and, therefore, there is no cause of action for the petitioner to institute present petition. 4.26 If the submissions made in Para 11 are perused, then the petitioner has merely stated very vaguely that the petitioner is likely to be affected by the assumption of jurisdiction by respondent no.2 and its subordinate authorities, by patently illegal reading of provisions of the FTP, within the territorial limits of this Court. On that basis the petitioner asserts that this Court has jurisdiction to entertain the petition. There is no specific cause of ac....
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....government authorities etc. involved in order to execute and implement the Foreign Trade Policy formulated by the Government of India. Section 6 of the Act has entrusted and empowered the DGFT to be responsible for carrying out the FTP. Being an executive body does not super impose the restriction that it cannot frame guidelines or procedures in order to shoulder its responsibilities. Rather, in terms of Section 6 of the Act, the executive body becomes bound to devise a suitable mechanism to fulfil the enshrined responsibility. 5.1.1 The DGFT has not legislated the stipulation at para 8.3.6 of the HOP Vol. I by incorporating the reference ".........Customs and Central Excise Duty draw Back Rules, 1995 shall apply mutatis mutandis to deemed exports." It is not only the Para 8.3.6 of the HOP Vol. I that has been devised, rather for each and every aspect of the scheme which is a part of the FTP, the DGFT has devised suitable documents and procedures. Para 8.3.6 of the HOP Vol. I contains the stipulation in the existing form, as, in the opinion of the DGFT, there is no need of any other innovative stipulation/provision/procedure, since the provisions contained in the Customs and Cen....
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....cated to the officers subordinate to him, both at the Headquarters and the Regional Offices spread across the country, who are directed to review the cases which may lie in the category for which clarification/interpretation has been offered by the DGFT. Regional Authorities of the Directorate General of Foreign Trade, with whom the applicants had submitted the Declarations as per the para 7 of ANF 8, and based upon which the Regional Authorities had provided the deemed export reimbursement, thus, reviewed these cases, as per the clarification given by the DGFT through exercise of power by the DGFT under para 2.3 of the FTP. 5.4 Para 5: Para 2.3 of the FTP in itself is abundantly absolute and unambiguous. The utility, validity and sanctity of para 8.3.6 of the HBP Vol. I has already been contended at para 1 above. 5.5 Paras 6 to 8: These paras are a matter of records, hence no comments. 5.6 Para 9: The petitioner has contended that provisions contained in Para 2.3 of the FTP, Para 8.3.6 of the HOP Vol. I and para 7 of the ANF 8 are in gross violation of Article 14 and 19 (1) (g) read with Articles 246 and 265 of the Constitution of India and the provisions of FTDR Act and ....
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....he present petition to any particular action or order passed by the Respondent No.2 or any of its subordinate officers concerning any transaction related to the business of the present petitioner. All orders passed by the Respondent No.2 or its subordinate officers to the extent they are adverse to the interest of the petitioner have been challenged separately before the appropriate forum. The adjudication of the legal issues raised in the present petition have no bearing on the judicial determination of such challenges pertaining to merits of individual transactions. 6.5 PRELIMINARY OBJECTION The affidavit has not been filed by the Respondent No.2. Instead, the affidavit has been filed by an officer subordinate to the Respondent No.2 holding the designation of Jt. DGFT. In the affidavit, no averments have been made, which remotely indicate that the deponent has been specifically authorized by the Respondent No.2 on his behalf to submit the said affidavit nor has any appropriate authorization letter been annexed thereto. The Jt. DGFT is neither a party impleaded nor a proper party or necessary party for the purpose of the present petition, and in that sense is a stranger to t....
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.... of Para 1C[vi] of the affidavit. In fact, by his own admission, the Respondent No.2 has accepted that under Section 15[1] of the FTDR Act, where an adjudication order has been passed by the officer subordinate to the DGFT, an appeal lies before the DGFT. This is, therefore, an illustration of an illusory and almost futile adjudicatory exercise that is likely to take place under the scheme of the FTP breaching all the established principles of judicial process in view of the following: 7.4.1 The subordinate authorities, while exercising their power to adjudicate under Section 13 of the FTDR Act are bound by the interpretation of the provision of the FTP by the Respondent No.2 under Para 2.3 of the FTP and therefore, have no choice but to follow the interpretation so adopted by the superior officer [i e. DGFT] in discharging their quasi-judicial function thereby militating the requirement of independent application of mind. 7.4.2 The adjudication order so passed by the subordinate officer on appeal shall lie before the Respondent No.2 under Section 15 of the FTDR Act who having interpreted the FTP in a certain manner would certainly not take a view contrary to such interpretat....
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....ally confers power onto the delegate [i.e. Central Government] to make rules [as per Section 19 of the FTDR Act] there is no other provision that permits the Central Government to further delegate the rule making power or power to legislate to any third party including the Respondent No.2. On analysis of the scheme of the FTDR Act and the principles of the administrative law stated above, it would be appropriate to state that the mother legislation [i.e. FTDR Act] has bestowed the power on the Central Government to formulate the delegated legislation [i.e. FTP] and further subordinate legislations by way of rules pursuant to Section 19 of the FTDR Act. However, no power can be seen to have been granted to the Respondent No.2 to legislate and therefore, the power conferred on the Respondent No.2 under Para 2.4 of the FTP, to specify procedures has to be interpreted strict senso to mean "only administrative guidelines" and none other. If in discharge of such power and, in the garb of laying down the procedures, the Respondent No.2 incorporates by reference any substantive law, [as has been done in Para 8.3.6 of the HOP by incorporating the Customs and Central Excise Duty Drawbacks Ru....
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....lenging the propriety of certain orders passed and actions of the Jt. DGFT and the Respondent No.2 within the framework of the legislative provision on a bona fide assumption that exercise of power by the authority was legal and proper in view of legality of the source of power. 7.11.4 The challenge in the said petition of orders adverse to the interest of the petitioner was premised essentially on the principles of estoppel and violation of the principles of natural justice. It was the action of the officers of reopening assessments which have already been completed that was challenged on the ground that they do not possess any power under the FTDR Act read with the FTP for such reopening. One of the key points that the petitioner had highlighted before the Division Bench was that it is an established principle of law that once assessment is complete, such assessment cannot be reopened. Instead, a proper procedure is to file an appeal against such an assessment order and an authority having passed an order becomes functus officio and cannot recall his order. 7.11.5 While as part of one of its alternate arguments, legitimacy of the power of the Respondent No.2 to interpret th....
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.... the contention of the respondent that the petitioner could have and ought to have agitated the issues raised in the present petition can be agitated before and ought to have been argued before the DGFT is ex facie perverse, bereft of basic understanding of competencies and jurisdiction of the DGFT and is entirely motivated to deny substantive justice to the petitioner. 7.13 Consequently, the pleadings of the Respondent No.2 that the petitioner deserves to be saddled with exemplary costs while dismissing the petition in limine is a reflection of their mala fide intention to deny the petitioner's legitimate right to challenge the vires/legality or otherwise of any piece of legislation before this Hon'ble Court. 7.14 The contents of Para 2[B] [i] of the affidavit are incorrect as the petitioner never challenged the vires of Para 2.4 of the FTP in the other writ petition. The subsequent averments by the Jt. DGFT on behalf of the Respondent No.2 of the said paragraph do not in any manner establish that the action of the petitioner in filing this petition was ever mischievous and/or suffers from the vice of suppression of material facts. Except bald allegations, which as d....
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....t petition is only restricted to challenging the vires of certain provisions which have been assailed in the petition. In addition and contrary to the averment made by the Respondent No.2 in its affidavit that there has been suppression of facts, it has been rightly indicated in the affidavit "that the Hon'ble High Court at Para 6[iv] and [v] have rightly directed that all contentions and defences available to the parties more particularly to the petitioner have been kept open for consideration afresh by the DGFT and that the division bench is not expressing anything in favour of either parties and that should adverse decision be passed by the DGFT it is open for the petitioner to challenge the same before the appropriate court forum". The said directive of the High Court cannot be interpreted to mean that the High Court has directed the DGFT to rule on the vires of the various provisions of the FTP - for the reason that the DGFT does not possess such power. Instead, the true and correct interpretation of the above directive can only be that the DGFT has been directed to examine the petitioner's eligibility to claim duty drawback on merits and all other aspects that the DGF....
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....bout filing of the present petition. Therefore, it is the respondent who is guilty of making false statements and thereby misguiding the Court. 7.19 The allegations made in Para 2[B][vi] of the affidavit are vehemently denied as they are grossly erroneous and have shades of qualifying as being insinuating in nature without appreciating the relevant facts and circumstances pertaining to the dispute in the case of GSECL and the petitioner, for the reasons more fully described below: 7.19.1 To the best of the petitioner's knowledge, GSECL's claim for duty drawback [which was denied by Respondent No.2 and is thus subject matter of Civil Application No. 15706 of 2011] pertains to the equipment purchased and imported by them. Alstom India Limited, i.e., the petitioner has no role or interest into the duty drawback claim of GSECL with respect to such imports. 7.19.2 Consequently, the allegation that - Alstom India Limited, i.e. the present petitioner is substantially and vitally interested in those proceedings, inasmuch as, if duty drawback is ordered to be granted to GSECL by the High Court, then Alstom India Limited would claim the reimbursement of such amount from GSEC....
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....islation. The contention of the Respondent No.2 that a person needs to wait for being affected by exercise of power under such faulty legislation to challenge the legality of the said legislation is to say the least laughable and deserves to be rejected. The contention of the Respondent No.2 that "the cause of action for the petitioner to challenge the Foreign Trade Policy would arise only and only if there is a decision which is adverse to the petitioner if decided by the Director General of Foreign Trade, in compliance of the directions contained in the order dated 26th June, 2013 rendered in Special Civil Application No. 2569/13" betrays possession of rudimentary knowledge of law and highlights absolute non-application of mind on the part of the deponent. 7.21.1 The contention raised by the petitioner about lack of territorial jurisdiction of this Court in entertaining the present petition is devoid of any merit and hence, denied. Even though the registered office of the petitioner company is in State of Maharashtra, the petitioner company has a significant investment in the form of full-fledged manufacturing plant in the State of Gujarat. It is from the said plant that the p....
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....g line of averments made by the Respondent No.2 including the present one which are utterly baseless, presumptive, glaring misrepresentation of facts with a view to surreptitiously prejudice this Bench, goes to show the complete lack of desire for fair play by the Respondent No.2 and instead, reflects badly of what governmental institutions should stand for. Exemplary costs and strictures, if any, should be deserved by the deponent of the affidavit for repeatedly making false allegations and attempting to misguide this Bench to intentionally cause harm to the interest of the petitioner and scuttle its legitimate right to approach this Court and seek relief subject to the Court's discretion. 7.26 The contents of Para 2C of the affidavit are denied. The preliminary objections raised by the respondent are frivolous and without any substance. There is no suppression of any material fact which would have a bearing on the adjudication of legality of the provisions questioned in the present petition. 7.27. The allegations of Para 3 of the affidavit are denied which state that the petitioner has apparently sought to surreptitiously file an appeal before this Bench against the ord....
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....n behalf of a stranger to the proceeding and one who is otherwise incompetent in law to put forth the case of the Respondent No.2. 7.29 The contents of Para 5 are denied and Para 6 does not require any comment. 7.30 The averment of the Jt. DGFT on behalf of the Respondent No.2 in Para 6[1] of the affidavit to the extent it states that the HOP Vol. I is a consolidated compilation of the methodology necessary for execution and implementing the FTP and also the averment that the Respondent No.2 being an executive body is entrusted to carry out the FTP and can frame guidelines or procedures for this purpose is admitted. However, the subsequent averments made therein with respect to the specific comments made qua the nature and characteristics of the provisions contained in Para 8.3.6 of the HOP Vol I in elation to which it has been stated in the affidavit that the DGFT has merely provided these as procedural guidelines as these duty drawback rules are sufficiently in consonance with the intended purpose of DGFT are denied for the reasons more fully described below: 7.30.1 The duty drawback rules have been formulated by the Central Government by way of a delegated legislation p....
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....r and time for claiming drawback on other than by post Procedural 13. 14 It provides for payment of drawback with interest Procedural 14. 15 It provides for supplementary claim Procedural 15. 16 It provides for repayment of erroneous or excess payment of drawback Substantive 16. 16A It provides for recovery of drawback where export goods proceeds not realized Substantive 17. 17 It provides for power to relax the rules Substantive 18. 18 It provides for repeals and savings Substantive 7.30.4 From a bare perusal of scheme of duty drawback rules it can be clearly noticed that the same deals largely with substantive aspects [i e. 13 Rules] and only few provisions deal with procedural matters [i e. 5 Rules]. 7.30.5 Under these circumstances, when an executive incorporates the duty drawback rules by reference, such incorporation by reference as has been done in Para 8.3.6 of the HOP is clearly a colourable device aimed at incorporating substantive law in the garb of mere procedural guidelines. 7.30.6 Such an action by the executive which amounts to nothing but legislation, goes against the very grain of separation or....
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....d rely upon Para 1 of the writ petition are denied. 7.38 The contents of Para 10 are denied. 7.39 The averments of Para 6 [AtoD] are denied in view of the above submissions. 7.40 The contents of Para 6 [E&F] of the affidavit are denied by relying upon the submission made in Para E of the writ petition. 7.40 In regard to para 6[11] of the affidavit, the petitioner requests this Court to allow the writ petition filed by the petitioner. 7.41 The contents of Para 6[12] requires no comments. 7.42 In regard to Para 6[13] of the affidavit, the petitioner requests this Court to allow the writ petition filed by the petitioner. 8. Mr Harin Raval, the learned Senior Advocate appearing on behalf of the Union of India, has, at the outset, taken a preliminary objection as to the maintainability of the present Special Civil Application on the ground of suppression of material facts. According to Mr. Raval, the petitioner has attempted to mislead this Court by mischievous averments as well as suppression of true and correct facts. According to Mr. Raval, the petitioner is guilty of not disclosing the order passed by this Court in an earlier petition filed by the petitioner bei....
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....dent no.3 and order dated April 13, 2012 passed by the respondent no.4 in appeal and instructions contained in the minutes dated March 15, 2011 and September 09, 2011 of PIC as illegal, arbitrary, contrary to FTDR Act and violative of Articles 14, 19(1)(g) and 300-A of the Constitution; (b) To pass an order, directing the respondent authority to disburse the amount claimed by the petitioner towards the duty draw back along with interest". 8.2 According to Mr. Raval, the factum of filing of the said petition, that the same being disposed of by order dated 26th June, 2013 and the further fact that an order having been passed on 21st March, 2011 by the Joint Director General of Foreign Trade, rejecting the claim for grant of deemed export benefit which led to filing of earlier petition being Special Civil Application No.2569 of 2013 and filing of a departmental appeal and the same having been dismissed by order dated 13th April, 2012, have been suppressed from this Court. According to Mr. Raval, suppression of above material facts alone is sufficient to dismiss the present writ-petition. 8.3 Mr. Raval has further contended that the petitioner has even not disclosed before thi....
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....alf of respective parties with respect to the power of the Joint Director General of Foreign Trade in reviewing and/or recalling the earlier decision of approving the duty drawback and even with respect to eligibility of duty draw back by the petitioner under the relevant Export and Import Policy / Foreign Trade Policy. Mr. Raval further points out that the Division Bench has further observed in paragraph 4 by recording the submissions of the learned Counsel appearing on behalf of this very petitioner that it would submit fresh detailed representation to the Director General of Foreign Trade in support of their claim that they are entitled to and eligible to duty draw back with respect to the goods in question under relevant Export and Import Policy / Foreign Trade Policy and has also recorded the request to make suitable observation that Director General of Foreign Trade may take a fresh decision on such representation to be made by the petitioner against the decision of the Joint Director General of Foreign Trade dated 21st March, 2011 and also with respect to eligibility of duty draw back with respect to the goods in question by the petitioner, independently with open mind and w....
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....the present petitioner is substantially and vitally interested in those proceedings, inasmuch as if such amount is ordered to be refunded to GSECL being the amount of import duty paid by it on such imports, it is reasonable and bona fide believed, in view of the terms and conditions of the contract entered into between GSECL and the petitioner, that it would claim the reimbursement of such amount from GSECL. Mr. Raval further submits that the said action of the Union of India and Director General of Foreign Trade is challenged on various grounds including the applicability of the Foreign Trade Policy and the very provisions, namely, para 8.3.6 and para 2.3. According to Mr. Raval, apart from suppressing the above mentioned facts, the present petition, which is lacking in bona fides, is filed with the mala fide intention of causing an impediment to the smooth hearing and decision of the said petition which is pending and is in session of another Bench which has the requisite determination to deal with it according to the present roster. Mr. Raval further submits that the said matter was fixed in the presence of the present petitioner on 30th July, 2013. According to Mr. Raval, the p....
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....r dated 26th June 2013 by another Division Bench and the issue in the aforesaid writ-application was whether the Joint Director General of Foreign Trade had the power to withdraw the approval letter allowing the benefit of duty drawback once approved by him. Mr. Ghosh contends that the petitioner had also challenged in the said petition the existence of the Policy Interpretation Committee headed by the Respondent No.2 prior to 2012 and its Minutes dated 15th March, 2011 on the basis of which such benefits were denied to the petitioner by the DGFT. According to Mr. Ghosh, the relief prayed in the said petition did not pertain to seeking the High Court's intervention to rule on the vires of the provisions of the FTP or HOP unlike what has been prayed for and pleaded in the present petition. Mr. Ghosh contends that the subject-matter of the aforesaid petition was solely the challenge of the propriety of certain orders passed and actions of the Jt. DGFT and the Respondent No.2 within the framework of the legislative provision on a bona fide assumption of power by the authority was legal and proper in view of legality of the source of power. Mr. Ghosh contends that the challenge in the ....
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....hat that the present petitioner is substantially and vitally interested in those proceedings, inasmuch as, if duty drawback is ordered to be granted to GSECL by the High Court, then the present petitioner would claim the reimbursement of such amount from GSECL demonstrates lack of knowledge of facts and the law on the part of the deponent. Mr. Ghosh further contends that neither in the pleadings nor in the oral submissions has a request been made by the petitioner or his lawyer to transfer the present petition to the Court hearing Special Civil Application No. 15706 of 2011 nor has the said writ petition transferred to this Court. 9.3 Mr. Ghosh further contends that the contention of the Respondent No.2 that cause of action for the petitioner to challenge the Foreign Trade Policy would arise only if there is a decision which is adverse to the petitioner if decided by the Director General of Foreign Trade, in compliance of the directions contained in the order dated 26th June, 2013 rendered in Special Civil Application No. 2569/13" betrays possession of rudimentary knowledge of law and highlights absolute non-application of mind on the part of the respondent No.2. 9.4 Mr. Ghos....
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....x was collected cannot be dismissed on the sole ground of payment of tax by the petitioner inasmuch as there cannot be a waiver of constitutional rights of mandatory character or fundamental rights. The only exception to this principle is where the assessee has passed on the burden of tax to the third parties i.e. the consumers. (See MAFATLAL INDUSTRIES LTD AND OTHERS VS. UNION OF INDIA AND OTHERS reported in (1997) 5 SCC 536. Thus, if the Constitution does not permit an authority to collect tax by enactment of appropriate law vesting such power, merely because such authority has recovered the amount by virtue of ultra vires adjudication, cannot be a factor standing in the way of the assessee to challenge the provisions as ultra vires just as in a Civil Litigation after suffering a decree, the judgment debtor in the executing proceedings can pray for declaration that the decree sought to be executed is a nullity for want of inherent jurisdiction without preferring any appeal against the original decree (See CHIRANJILAL SHRILAL GOENKA VS. JASJIT SINGH reported in (1993) 2 SCC 507). 12. Moreover, we find substance in the contention of Mr. Ghosh, the learned counsel appearing for t....
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.... he thought that the existence of earlier litigation and directions contained therein are not material and, for that reason, he was entitled not to mention such fact. Mr Raval contends it was the duty of the petitioner to give details of the earlier litigation and then it is for the Court to decide whether this Court will take into consideration such fact. 13.2 In the above case before the Supreme Court, the question was whether non-mentioning of an earlier order dated 2nd May 2003 in the earlier application for extension of time filed by the Trustees and the finality attached to it was a relevant fact which has not been clearly disclosed before the Supreme Court by the petitioner and, according to the respondent, in view of the suppression, the Special Leave to Appeal should not be granted to the petitioner. The Supreme Court in paragraph 45 of the judgment made a categorical finding that the order dated 2nd May 2003 was very much material and in that context in paragraph 46 made the following observations:- "46. It is not for a litigant to decide what fact is material for adjudicating a case and what is not material. It is the obligation of a litigant to disclose all the fa....
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....s of law and thereby create an impediment for the concerned authorities and the institutions who are to monitor those persons who seek such challenges by abusing the process of the Court. Such frivolous challenges always result in prolongation of the litigation, which enables such unscrupulous elements who always thrive on other peoples money to take advantage of the pendency of such litigation preferred by them and thereby gain, on the one side, unlawful advantage on the monitory aspect and to the disadvantage of innocent victims, and ultimately, gain unlawful enrichment of such ill-gotten money by defrauding others. In effect, such attempts made by invoking the extraordinary jurisdiction of the writ Courts of many such challenges, mostly result in rejection of such challenges. However, at the same time, while taking advantage of the long time gap involved in the pending proceedings, such unscrupulous litigants even while suffering the rejection of their stand at the end as to the vires of the provisions, always try to wriggle out of their liabilities by stating that the time lag had created a situation wherein those persons who were lured to part with huge sums of money are eithe....
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....f law made before it for the purpose of entertaining the same as well as for granting any interim relief during the pendency of such writ petitions. For the above stated reasons it is also imperative that when such writ petitions are entertained, the same should be disposed of as expeditiously as possible and on a time bound basis, so that the legal position is settled one way or the other." 13.5 After going through the aforesaid observations made in paragraphs 31 and 32, we find that the Supreme Court was concerned with a case where frivolous pleas of vires of the provisions were taken in order to delay the proceeding or to obstruct the judicial proceeding and in that context, made the aforesaid observations. The said observations cannot have any application to a case where the Court, on consideration of the materials on record, holds that a particular provision really ultra vires the provision of the Constitution or the Act itself. We have already pointed out that there is no waiver of a constitutional provision going to the root of the power of a statutory authority. The above observations, in our opinion, should be borne in mind while entertaining a writ application challeng....
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....y material fact and thus, the said decision cannot have any application to the facts of the present case. 15. In the case of K.D. SHARMA vs. STEEL AUTHORITY OF INDIA LIMITED AND OTHERS reported in (2008) 12 SCC 481, where the petitioner made false statement and concealed material facts and mislead the Court, the apex Court held that in such a case, the court may dismiss the petition at the threshold without considering the merits of the claim. In the said case, an impression was sought to be created as if no notice was ever given to the appellants nor was he informed about the consideration of cases of eligible and qualified bidders in pursuance of the order passed by the High Court in review and confirmed by the Supreme Court. The true facts, however, were just contrary to what was sought to be placed before the Court. A notice was issued by SAIL to the appellant, he received the notice, intimated in writing to SAIL that he had authorized R to appear on his behalf, R duly appeared at the time of consideration of bids. The bid of the respondent No.2 was found to be lower and was accepted and the contract was given to him. In the above facts, the Supreme Court observed that the a....
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....he fact that after the dismissal of the first appeal by the Division Bench, possession of the land was taken by the Land Acquisition Collector on 13th July 2001 and transferred to the Development Authority. In such circumstances, the Supreme Court held that a person who does not come to the court with clean hands is not entitled to be heard on merits of his grievances, and is not entitled to any relief. 18. We, thus, find that suppression of the facts indicated in the above decision was very much material and in the above context, the Supreme Court made the aforesaid observations which is not the case before us. 19. In the case of PRESTIGE ENGINEERING (INDIA) LTD. v. COLLECTOR OF CENTRAL EXCISE, MEERUT AND OTHERS reported in (1994) 6 SCC 465, the question was as regards interpretation of the Notification No. 119/75-C.E. dated 30th April 1975 issued by the Central Government under rule 8(1) of the Central Excise Rules, 1994. The said notification partly exempted goods falling under Item No. 68 manufactured in a factory as "job work" and included under the explanation, the articles returned after manufacturing process by the "job worker". In such circumstances, the Supreme Cour....
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.... said Division Bench setting aside the order impugned. We, therefore, overrule even the second objection raised by Mr. Raval as regards want of territorial jurisdiction. 23. We now propose to enter into the question whether para 2.3 of the FTP is unconstitutional and ultra vires the FTDR Act and whether Para 8.3.6 of the HOP is ultra vires the FTDR Act as well as FTP and further whether Para 7 of the declaration attached with ANF- 8 form read with the provisions of HOP which gives power to the Respondent No.2 or its subordinates to re-verify or re-determine the duty drawback benefits once such benefits are granted to the claimant is ultra vires the FTDR Act. 24. In order to appreciate the aforesaid questions, it would be profitable to refer to Sections 3, 5, 6, 15, 16, and 19 of FTDR Act which are quoted below: "Section 3. Powers to make provisions relating to imports and exports - (1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. (2) The Central Government may also, by Order published in the Official Gazette, make provision ....
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....n aggrieved by any decision or order made by the Adjudicating Authority under this Act may prefer an appeal, - (a) where the decision or order has been made by the Director General, to the Central Government; (b) where the decision or order has been made by an officer subordinate to the Director General, to the Director General or to any officer superior to the Adjudicating Authority authorized by the Director General to hear the appeal, within a period of forty-five days from the date on which the decision or order is served on such person : Provided that the Appellate Authority may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the aforesaid period, allow such appeal to be preferred within a further period of thirty days : Provided further that in the case of an appeal against a decision or order imposing a penalty or redemption charges, no such appeal shall be entertained unless the amount of the penalty or redemption charges has been deposited by the appellant : Provided also that, where the Appellate Authority is of opinion that the deposit to be made will cause undue hardship to the appellant, it may, ....
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....ion (2) of section 8; (b) the exceptions subject to which and the person or class of persons in respect of whom fees may be levied and the manner in which a licence, certificate, scrip or any instrument bestowing financial or fiscal benefits may be granted or renewed under sub-section (1) of section 9; (c) the class or classes of goods (including the goods connected with service or technology) for which a licence, certificate, scrip or any instrument bestowing financial or fiscal benefits may be granted under sub-section (2) of section 9; (d) the form in which and the terms, conditions and restrictions subject to which licence, certificate, scrip or any instrument bestowing financial or fiscal benefits may be granted under sub-section (3) of section 9; (e) the conditions subject to which licence, certificate, scrip or any instrument bestowing financial or fiscal benefits may be suspended or cancelled under sub-section (4) of section 9; (ea) the matter in which goods the import of which shall be subject to quantitative restrictions, may be identified and the manner in which the causes of serious injury or causes of threat of serious injury in relation to such goods ma....
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....onstituted to aid and advice DGFT. Para 2.4 of the FTP: DGFT may, specify procedure to the followed by an exporter or importer or by any licensing / regional authority or by any other authority for purposes of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and FTP. Such procedures, or amendments if any, shall be published by means of a Public Notice. Para 8.3.6 of the HOP 8.3.6 Subject to procedure laid down in HBP, Customs and Central Excise Duty Drawback Rules, 1995 shall apply mutatis mutandis to deemed exports. Para 7 of the declaration attached with ANF-8 form "7. I/we further declare that I/we shall immediately refund the amount of drawback obtained by us in excess of any amount/rate which may be re-determined by Government as a result of post verification." 26. After hearing the learned counsel for the parties and after going through the provisions quoted above, we find that Section 3 of the FTDR Act empowers the Central Government to make appropriate provisions for development and regulation of foreign trade. Similarly, Section 5 of the FTDR Act gives powers to the Central Government to formulate and announce, by way ....
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....l Excise Duty Drawback Rules, 1995 shall apply mutatis mutandis to deemed exports. 27. In the above context, Mr Ghosh, the learned advocate appearing on behalf of the petitioner, strenuously contended that the aforesaid provisions, namely, Para 2.3 of the FTP, Para 8.3.6 of the HOP and Para 7 of the ANF-8 form are in gross violation of Article 14 and 19[1] [g] read with Articles 246 and 265 of the Constitution of India and the provisions of FTDR Act. 28. We find that the Respondent No.2, namely, DGFT, through Para 8.3.6 of the HOP has incorporated by reference the provisions of Duty Drawback Rules mutatis mutandis to the FTP and HOP. We find substance in the contention of Mr Ghosh that the HOP is nothing but an administrative guideline as would appear from a combined reading of Para 2.4 of the FTP and Section 6 of the FTDR Act. We have already pointed out that Section 3 of the FTDR Act grants power to the Respondent No.1 to make provisions relating to imports and exports and the Respondent No.1 under Section 5 of the FTDR Act can formulate and announce the foreign trade policy. It further appears from Section 6(3) of the FTDR Act that of the powers conferred upon the Responde....
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....titution of India. 30. We find that the power granted to the Respondent No.2 under Para 2.4 of the FTP is to lay down the procedure to be followed by an exporter or by any licensing/regional authority or by any other authority for the purposes of implementing provisions of FTDR Act, Rules and the orders made there under and FTP and, therefore, those by necessary implication excludes the "Rule making power" conferred under Section 19 of the FTDR Act inasmuch as the powers conferred under Section 19 cannot be re-delegated to the Respondent no. 2 as expressly prohibited under Section 6(3) of the Act. 31. On going through the provisions of the FTDR Act, we find that those do not grant power to the Respondent No.2 or its subordinates to re-determine or re-verify the deemed export benefits if such benefits have been approved or granted as per the provisions of the FTDR Act except by way of review as provided in Section 16. In the absence of any power under FTDR Act, the Respondent No.2 or its subordinates cannot assume quasi-judicial power for instance, the power to re-determine or re-verify under the administrative guidelines i.e. Para 7 of the ANF-8 Form. Therefore, by virtue of ....
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.... appeal on sufficient cause being shown. The said section puts certain other restrictions on preferring the appeal. 32.1 Section 16, on the other hand, authorizes the Central Government, in the case of any decision or order made by the Director General, or the Director General in the case of any decision or order made by any officer subordinate to him, to act on its own motion or otherwise, by calling for and examining the records of any proceeding for the purpose of satisfying itself or himself, as the case may be, as to the correctness, legality or propriety of such decision or order and make such orders thereon as may be deemed fit. The proviso, however, says that no decision or order shall be varied under section 16 so as to prejudicially affect any person unless such person has, within a period of two years from the date of such decision or order, received a notice to show cause why such decision or order shall not be varied and has been given a reasonable opportunity of making representation and, if he so desires, of being heard in defence. 32.2 Section 19 of the Act gives the Central Government the power to make rules for carrying out the provisions of the Act. 33. ....
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....ther persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board : Provided that no such orders, instructions or directions shall be issued- [a] so as to require any such officer of customs to make a particular assessment or to dispose of a particular case in a particular manner; or [b] so as to interfere with the discretion of the Commissioner of Customs [Appeals] in the exercise of his appellate functions. xxx xxx xxx Section 119 of the Income Tax Act, 1961: 119.[1] The Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board : Provided that no such orders, instructions or directions shall be issued-- [a] so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or [b] so as to interfere with the discretion of the Commissioner [Appeals] in the exe....
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....hat the Central Government shall cause every order issued under this clause to be laid before each House of Parliament. (Emphasis supplied by us). 34.1 Mr. Ghosh points out in the aforesaid three Acts, a similar provision has been made by giving power to the concerned Board to issue order or instruction or directions to the subordinate authorities for proper administration of the aforesaid three Acts with a further stipulation that such authorities and all other persons employed in the execution of those Acts should observe and follow such orders, instructions or directions of the Board. Mr. Ghosh further points out that in the aforesaid three Acts, there is a specific prohibition that those orders, instructions or directions shall not be issued so as to require any authority under those Acts to make a particular assessment or to dispose of a particular case in a particular manner or to interfere with the discretion of the quasi judicial authorities prescribed under those Acts. Mr. Ghosh, thus, contends that the power conferred under para 2.3 of FTP by empowering the respondent No.2 to interpret FTP should not be applicable to the functionaries acting quasi judicially under t....
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....such contention of Mr. Raval that the interpretation given by the respondent No.2 will have overriding effect upon the decisions of the Supreme Court or various High Courts while making judicial review of a decision passed by an authority under the FTDR Act. 37. We, therefore, hold that the interpretation given by the respondent No.2 in terms of Paragraph 2.3 of the FTP, no doubt, binds all the officers or the authorities under the FTDR Act provided however that there is no existing interpretation on the relevant point given by the High Courts or the Supreme Court and at the same time, such interpretation given by the Respondent no. 2 will not be binding upon the High Courts or the Supreme Court while making judicial review of any decision taken by the adjudicating authorities under the Act. 38. We now propose to deal with some relevant decisions relied upon by the learned counsel for the parties. 38.1 In the case of KUNJ BEHARI LAL BUTAIL & ORS. VS. STATE OF H.P. & ORS. reported in AIR 2000 SC 1069, a three- Judge Bench of the Supreme Court repeated the well settled proposition of law that a delegated power to legislate by making rules for carrying out the purpose of the ....
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....t made the following observations:- "13. Plain reading of Section 59A shows that if any question relating to the rate of tax leviable under the Act on any goods is referred to the Govt. then its decision thereon, notwithstanding any other provision in this Act is final. This section does not indicate as to who can make a reference to the Govt. There is no obligation on the Government to hear any dealer before it decides as to the rate of tax leviable on the sales or purchase of any type of goods. In fact, as we have noticed earlier, by an omnibus order dated 23rd April, 1984 the Govt. decided rates of tax payable in respect of various items without any opportunity of being heard having been granted to any of the dealers. Lastly Section 59A clearly states that the decision so given by the Govt. shall be final and would have an over-riding effect. 14. There is no warrant in our opinion in trying to read down the provisions of Section 59A. The works (sic) of the said provision are clear and unambiguous. The said section gives absolute power to the Govt. to decide any question regarding the rate of tax leviable on the sale or purchase of goods any manner it deems proper and final....