TaxTMI 
TaxTMI 
TaxTMI 
1972 (1) TMI 101
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....y a common judgment of the learned single Judge, the facts in the respondent's writ petition No. 933 of 1970 being, by common consent, treated as illustrative of all the other cases as well. On December 7, 1968 Lala Manickchand, proprietor of Messrs Katrella Metal Corporation, Madras, respondent in this Court, submitted an application, as a new unit, for the licensing period,1968-69 for the grant of an import licence for Rs. 9,900/for importing stainless steel as an actual user for manufacturing. hospital requisites. The registration certificate dated December 31, 1968 issued to the respondent as a small scale industry by the Additional Assistant Director of Land Commerce, District Madras North, reads : "DEPARTMENT OF INDUSTRIES & COMMERCE SMALL SCALE INDUSTRIES DIVISION S. No. 571 Registration No. MS.N.SSI/506/033 CERTIFICATE This is to certify that M/s. Katrala Metal Corporation 54 Sydenhams Road, Madras 7 office at 90 N.S.C. Bose Road, Madras 1 is a genuine Small Scale Industry engaged in the manufacture of Hospital and Surgical Instruments, Trays, Mugs, Basins and Household Utensils out of Stainless steel. Sd/ S. Gopalakrishnan Addl. Asstt. Director of Land & Commerce,....
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.... Controller's telegram dated 9th January, 1969. 2. The position has been reviewed, in consultation with the Department of Iron & Steel, and it has been decided that the applications for Stainless Steel Sheets, plates and strips received from newcomer units during 1968-69 should be scrutinised by the Directors of Industries and the Regional Offices and Licensing Sections very carefully, before import licences are granted, with a view to ensuring that new units which are not well-equipped do not get away with import licences of this sensitive item. 3. For the purpose of scrutinising the applications, it is necessary to call for the following data from the .applicant : (1) Date of registration of the unit. (2) Date on which power connection was obtained. (3) Details of the machinery installed. (4) Value of the machinery installed. (5) Whether the machinery is imported or indigenous. (6) The address of the firm from whom the machinery was purchased. (7) Date of purchase of the machinery. (8) Date of installation of the machinery. (9) Details of the end products to be manufactured. (10) Whether the unit is fully equipped to manufacture the items in question. (11) Past exper....
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...., instrument trays, wash bowls, measuring jugs, ointment jars and medicine cups as end-products were in non-priority category. The sponsoring authorities were accordingly directed to ensure that only those hospital equipment and appliances were to be treated as priority industries which would appropriately be classified as " medical and surgical equipment and appliances". On May 29, 1969 the Chief Controller of Imports and Exports issued General Licensing Instruction No. 31 of 1969 on the subject of "grant of import licence to units engaged in the manufacture of hospital equipment". After inviting attention to the earlier G.L.I. No. 29/69 dated May 19, 1969 it was stated in this instruction that after further consideration in consultation with the D.G.T.D. a list had been prepared in respect of the end-products which alone would be treated as priority industries under the general heading "medical and surgical equipment and appliances." That list was enclosed for the guidance of the Licensing and Sponsoring authorities and in case of doubt those authorities were directed to refer the matter to head-quarters Special Licensing Cell. On October 31, 1969 the Director of Industries, Madr....
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....ons pending until the completion of the examination. The petitioner's application could not therefore be disposed of. However, instructions have since been received vide the Chief Controller of Imports and Exports, New Delhi letter dated 8-4-1970, which inter alia provides that applications received by the sponsoring authorities in time may be considered irrespective of the date on which they were forwarded to the licensing authorities and in terms of the licensing policy for 1970-71." It was added in this para of the counter-affidavit "According to policy for 1970-71, the material stainless steel sheets is a canalised item for non-priority industries and release orders are to be issued on Minerals and Metals Trading Corporation." In the judgment of the learned single Judge it was stated to be common ground that the application of the writ petitioners had to be dealt with in terms of the relevant import policy in force for the year 1968-69. However, a little lower down in that judgment, after reproducing the relevant portion of paragraph 10 of the counter-affidavit, it was also observed : "Learned counsel for the Central Government urged that the Licensing Authority whoever it ....
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....e order viz. March 25, 1971. In this Court the question canvassed at the bar is a very narrow one, namely, whether the application for the import licence in question should be considered in accordance with the policy in force when the licence is granted or when the application is made. No point of mala fides or arbitrariness was argued in the High Court and no serious attempt was made on behalf of the respondent to sustain the impugned order of the High Court on that basis, as indeed, it is not possible for this Court to entertain and adjudicate upon such a plea in this appeal in the absence of a considered opinion of the High Court. The appellants' learned counsel Shri V. S. Desai at the outset drew our attention to s. 3 (1) (a) of the Imports & Exports (Control) Act, 18 of 1947 which empowers the Central Government to prohibit, restrict or otherwise control imports and exports and to cl. 6 ( 1 ) (a) of the Imports (Control) Order, 1 9 5 5 made by the Central Government in exercise of the powers conferred on it by ss. 3 and 4 of Act 18 of 1947. Clause 6(1) of the Order empowers the Central Government or the Chief Controller of Imports and Exports to refuse to grant a licence or di....
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.... other Government Department the value of the licences issued in such cases will be treated as first charge on the monetary ceiling to be allocated for the next licensing period and the necessary intimation in this regard will be given to the sponsoring authority." According to Shri Desai the entire position of monetary ceiling, availability of good-, applied for from indigenous sources, essentiality of the goods applied for and other relevant factors have to be seen for considering the question of issuing import licences to actual users for back periods. These considerations, said Shri Desai, indicate that if availability of the goods applied for, from indigenous sources, improves or the position in regard to foreign exchange deteriorates or there is a chance in the matter of essentiality of the goods applied for, then, it would be and, indeed, it should be open to the licensing authority to come to a fresh decision on the question of issuing the licence 'uninfluenced by the consideration that during the previous licensing period the situation being more easy, the import licence applied for would have been more readily granted. The import policy is influenced by the condition of ....
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....ts for the period 1968-69 be treated as priority industry and licence issued to the respondent on this basis. As canalising policy was introduced only on April 1, 1970, when the respondent's case, according to Shri Singhvi's argument, had already been completed Is a result of the assurance contained in the letter of February 23, 1970, the respondent's industry was not governed by this policy and was entitled to get the import licence. Shri Singhvi placed strong reliance on r-. 7(2) contained in the Import Trade Control Handbook of Rules and Procedure of 1968 and contended that the applications for licences must be considered in tern-is of the relevant policy in force at the time of making the application. Reference in this connection was also made to r. 81 (c), according to which the role of the licensing authorities is : "(i) To issue licences on the basis of the recommendations of the sponsoring authorities where such recommendations are in consonance with the policy/procedure in force; (ii) In the case of rejections, to communicate reasons thereof to the applicants; (iii) To take penal action against the licencees or importers for violations of import and export control regul....
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....tory conduct violative of rules of natural justice and equality. It was also added that according to the respondent's information another 321 applicants were going to get licences without any proper basis or criteria. The counsel also made a reference to that part of the respondent's affidavit in the High Court where it was stated that if, as the respondent had reliably learnt, the 300 applicants who had asked for import licences were to be granted their prayers then the ceiling limit allotted for the year would be exhausted and the respondent would not get any relief. It was for this reason that prayer was made in the High Court for restraining the Joint Chief Controller of Imports and Exports from issuing any licence to any other person pending disposal of the respondent's application. According to Shri Singhvi on April 9, 1970 an undertaking was given by the State in the High Court that the plea of exhaustion of the quota would not be taken by it for defeating the respondent's claim. This submission was apparently made for the purpose of controverting the contention that the availability of foreign exchange being one of the vital considerations determining the grant of import li....
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.... of England, Third edn. Vol. II, p. 90) ". Quite clearly, this decision only reiterates the recognised rule in regard to the grant of mandamus and is of little help to the respondent. In our view the plea of arbitrariness and mala fides having not been pressed in the High Court it is not possible for this Court to consider it. The material on the existing record to which our attention was drawn is not enough to make out a prima facie case of either mala fides or arbitrariness to justify any further scrutiny. Indeed, in the High Court the State had agreed to consider the respondent's application and the only controversy there was as to the year of which the import policy was to govern the respondent's application. For this purpose, reliance was placed neither on the plea of mala fides nor of arbitrariness with the result that we decline to go into these pleas. There is no doubt that speedy disposal of applications for import licences is of the greatest importance. Indeed, in the Import Trade Control Handbook of Rules and Procedure, 1968 paras 302 to 304 have been exclusively devoted to the subject of Checks on delays. They provide; "302 (1) Every effort is made to avoid delays in....
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....Relations Officer in the import trade control office concerned or book an interview with the officer concerned through the Enquiry Officer in order to know the reasons for the delay in the disposal of his application. (c) Where a licensing authority calls for certain documents or information from the applicant or any deficiencies in the application are communicated to the applicant, and the applicant has furnished the required documents or information or made good the deficiencies but does not receive any further communication from the licensing authority within 15 days thereafter, he can bring the matter to the notice of the Public Relations Officer or book an interview with the Officer concerned to know the reasons for the delay in the disposal of the application. (d) Applications for import of capital goods and heavy electrical plant will take somewhat longer time. But in such cases also, if the applicant finds that there has been a delay in the disposal of his application, he can bring the matter to the notice of Public Relations Officer or book an interview with the concerned officer to know the reasons for delay." This importance is justified because it is necessary for ou....
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....d, clearly shows that the respondent's application included items of manufacture which were not covered by the priority list and as a result of a large number of new applicants for the sensitive item of stainless steel, the Department was compelled to hold a proper scrutiny in the larger interests both of the healthy growth of industry and of the balanced economy of the country. Fresh instructions for this purpose issued on June 4, 1969 became operative and the respondent was naturally required to comply with these instructions. Since the respondent's application contained items which were nonpriority end-products this application was kept pending until the completion of its examination, and in our opinion this was not unreasonable. It was on April 8, 1970 that the Chief Controller of Imports and Exports, apparently after proper review of the situation, issued instructions providing for the consideration of applications like those of the respondent, irrespective of the date on which they were forwarded to the Department, in terms of the licensing policy for 1970-71. Though that period has expired, Shri Desai has fairly offered on behalf of his clients even now to consider the respo....