TaxTMI 
TaxTMI 
2008 (7) TMI 388
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....y restrictions. It was because of the erstwhile policy of the Government, the farmers have increased their cultivation in respect of Maize in States like Tamil Nadu, Karnataka and Andhra Pradesh. According to the petitioner, Maize is not a staple food for the people and it is used as a poultry feed. It is based on the said Policy, the petitioner's firm stated to have entered into the contract with foreign buyers M/s. Hapiways Management Services Pvt. Ltd., Singapore, on 09-05-2008, for shipment of 4000 MT of Indian Yellow Maize to Colombo during June 2008 to July 2008. Pursuant to the contract entered by the petitioner with the foreign buyers, the petitioner has procured Maize and signed with the Shipping Company M/s. Marine Export and Trading Company, on 26-06-2008 fixing a vessel, mv. Medhu Faru, to carry the quantity of 1700 MT to Colombo between 1st July to 8th July 2008. A similar arrangement was entered with an another Shipping Company M/s. EBC Marine Pvt. Ltd., on 30-06-2008, fixing a vessel called mv. Bagawan, to carry a quantity of 2100 MT to Colombo between 3rd to 5th July 2008. Therefore, the contract was entered with the said two shipping Companies for the purpose of ex....
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.... cannot be questioned in a Court of Law. 8. The case of the first and second respondents is that the Government while framing a Policy or changing the Policy is presumed to have taken into consideration the public interest at large and that cannot be within the domain of judicial review. According to the first and second respondents, Foreign Trade is incidental to the objective to see that the food grains are available to the people, while denying that the Maize is not a staple food. It is also the case of the first and second respondents that in respect of applicability of Policy, there is no legitimate expectation in commercial field. The first and second respondents would also rely upon the various judgments of the Apex Court to state that the Foreign Trade Policy is the Government's domain, which cannot be questioned. It is also the case of the first and second respondents, that withdrawal of concessions, namely, transitional arrangements given in the Foreign Trade Policy 2004-09 in para 1.5 is incidental and the first and second respondents, while deciding or changing the Policy have the right to withdraw such concessions. It is also the case of the first and second respond....
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....r the truckers strike was withdrawn. In order to consider the request of the petitioner, a report was called for from the Customs Officer in charge of 'Raja Container Freight Station', who in turn reported that the said two S/Bills were not registered in the Customs at all and the cargo was not at all examined and the export cargo not falling under the custody of the Customs Authority prior to the prohibition of export of Maize. Therefore, according to the third respondent, on the factual situation, the petitioner's case is distinctive, since no initial steps have been taken on the part of the petitioner and therefore, the petitioner cannot claim equality as per Notification issued in respect of the other three exporters, as stated above viz., Kakinada, Jam Nagar and Kandla Ports. 10. Mr. N. Dilip Kumar, learned counsel appearing for the petitioner would fairly submit that the petitioner is not covered under Policy 9.12 of the Foreign Trade Policy and Handbook of Procedures (Foreign Trade Procedures Part- 2). The said Policy of 9.12 deals with the date of shipment and despatch in respect of exports. As far as the petitioner's case is concerned, the shipping bills have been produ....
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....t in the counter affidavit is highlighted by the learned Assistant Solicitor General, stating that on enquiry it was found that the shipping bills were not even registered with the Customs Department and cargo was never examined by the Customs Department at all and the export cargo cannot be falling under the custody of the Customs Authority prior to prohibition of export of Maize. Therefore, according to the learned Assistant Solicitor General, it is only in respect of cases where the goods have passed on to the level of custody of the Customs Authority prior to the imposition of prohibition, the benefits have been given as per the Notification dated 5-7-2008. He would also refer to the representation of the petitioner dated 4-7-2008, which has been properly answered on the basis that the petitioner has not taken any initial step for the purpose of proceeding with the export procedure. He would also reiterate by referring to the various judgments of the Apex Court to contend that in respect of the Policy matters, the power of Judicial Review of the Courts are limited and the Courts must be slow in interfering with the Policy matters because it is the Government which is obliged to....
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....dia, I deem it fit to consider the said contention also. 15. On fact as it is stated in the counter affidavit by the third respondent Customs Department, there is no difficulty to come to the conclusion that as far as the procedure followed by the petitioner for export of Maize, the same is in the initial stage and steps have not been taken even for the purpose of presenting the cargo to the Customs to examine and therefore, the same was not within the custody of the Customs authority. While considering the said procedure, it is relevant to narrate the various steps to be followed for the purpose of completing the export process before going in to the Policy in cases of export. The first step to be taken is that the exporter has to present the shipping bills to the Customs Department and thereafter, it reaches the next stage of wharf during which, the Department consider the bills and then decide whether to give an order permitting the exporter to export the particular commodity. It is in the third stage, when the authority is satisfied that the exporter is entitled to export, the "Let Export Order" is issued. Once it is issued, it imposes certain obligations on the part of the ....
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.... 0 15000 (with LEO for 22000 MT) 2. Kandla/Halina 0 24000 (with LEO for 12000 MT) 3. Kandla/Ivan Makran 0 22000* 4. Kandla/Aqva Star 0 6500* 5. Kandla/Sea Trader 0 17000* 6. Kandla/Shebelle 0 25000* * with LEO for full quantity 3. It has been decided that above mentioned vessels may be allowed for export of maize subject to Irrevocable Commercial Letter of Credit (LC) supporting these shipments, of a date upto 3-7-2008. 4. This issues with the approval of Director General of Foreign Trade. Sd/- (Anil Aggarwal) Jt. Director General of Foreign Trade." 18. In the said order dated 05-07-2008, the first respondent, as a matter of Policy, perm....
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....h is applicable as far as policy making in this case depends upon the factual situation which can be comparable to "taxable event" in taxing law. In the present case, it is only when the goods pass on to the Customs Authority under its custody, the question of completion of the export will arise and in cases where the permission has been granted in respect of the three other exporters, they are distinct and they have crossed the first stage and in some cases the second stage has also been crossed where "Let Export Order" has been issued and the goods are awaiting for shipment. In view of the same, the contention of the learned counsel for the petitioner that there is a violation of Article 14 of the Constitution of India, is not sustainable and notification of the first respondent dated 5-7-2008 granting permission to export in respect of three traders cannot be held to be invalid. 20. Now, coming to the Policy of the Government, the Import and Export Policy of the Government is made as per statutory compulsion under the Foreign Trade (Development and Regulation) Act, 1992. Under the above said Parliamentary law, Section 3 provides power to the Central Government to make various....
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....ers of credit established before the date of imposition of any restrictions. Therefore, as per the said Policy, it enables the Government to permit export, in spite of imposing restrictions, in cases where certain transactions have crossed a limit of a period of an irrevocable commercial letter of credit. The Policy is not a matter of right for a trader, since the Policy is subject to change. Therefore, while issuing the Notification by the Central Government on 03-07-2008, by which, the Government by exercising its power under Section 5 r/w Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992) and also based on para 1.3 and 2.1 of Foreign Trade Policy of 2004-2009, has issued an amendment to be effected immediately in respect of entry No. 46B in Table B under Schedule 2 of ITC (HS) Classifications of Export and Import Items, 2004-09 by prohibiting export of Maize(Corn). While issuing such notification of imposing of ban on export of Maize dated 03-07-2008, the Government has also taken away the applicability of transitional arrangement conferred in Para 1.5 of Foreign Trade Policy 2004-09. The said Notification dated 03-07-2008 is as follows :- ....
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....e followed for the purpose of "date of shipment and despatch" in respect of exports. The repeated insistence by the learned counsel for the petitioner in respect of the term in Para 9.12 of the Handbook of Procedures that in cases where the procedures or Policy has been modified to the disadvantage of an exporter, the same shall not be applicable to the consignment already handed over to Customs for examination and subsequent export upto public Notification/Notification date, is also baseless. The said Para of 9.12 reads as follows :- Mode of Transportation Date of Shipment/Dispatch (i) By Sea For bulk cargo, date of Bill of Lading or date of mate receipt, whichever is later. (a) For containerised cargo, date of "Onboard Bill of Lading", or "Received for Shipment Bill of Lading", where the L/C provides for such Bill of Lading. For exports by containers from Inland Container Depot (ICD), date of Bill of Lading issued by shipping agents at the time of loading of export goods in ICD after customs clearance. (b) For Lash barges, date of Bill of Lading evidencing loading of export goods on board. (ii) By Air Date mentioned by appropriate Officer of Cu....
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....ption was granted i.e., in respect of three exporters, regarding some of them, "Let Export Order" has been issued for the whole quantity and regarding some of the items, only for a part of the quantity. "Let Export Order" is issued and for the remaining part, shipping bill is pending. When the entire quantity forms part of one consignment, out of which, "Let Export Order" had been issued for a part of the quantity and the remaining part is pending with the Customs Department for clearance, it cannot be equated with that of the petitioner's case, since, the entire commodity is only at the shipping bill stage i.e., the preliminary stage in the process of export. On the factual situation, I do not see any discrimination between the petitioner and the other three exporters and any illegality in granting permission, by applying Para 9.12 of the Handbook of Procedures. 29. In P.T.R. Export (Madras) Pvt. Ltd., v. Union of India, reported in [1996 (86) E.L.T. 3 (S.C.)], the Apex Court had an occasion to consider about the scope of judicial review against the Policy Making Powers of the Government and also applicability of the principle of estoppel. The Supreme Court, while analysing var....
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.... Government would take diverse factors for formulating the policy for import or export of the goods granting relatively greater priorities to various items in the overall larger interest of the economy of the country. It is, therefore, by exercise of the power given to the executive or as the case may be, the legislature is at liberty to evolve such policies. 4. An applicant has no vested right to have export or import licences in terms of the policies in force at the date of his making application. For obvious reasons, granting of licences depends upon the policy prevailing on the date of the grant of the licence or permit. The authority concerned may be in a better position to have the overall picture of diverse factors to grant permit or refuse to grant permission to import or export goods. The decision, therefore, would be taken from diverse economic perspectives which the executive is in a better informed position unless, as we have stated earlier, the refusal is mala fide or is an abuse of the power in which event it is for the applicant to plead and prove to the satisfaction of the Court that the refusal was vitiated by the above factors. 5. It would, therefore, be cle....
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....n of executive, quasi-legislative and quasi-judicial nature. It is trite law that exercise of power, whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary (See State of U.P and others v. Renusagar Power Co. and others (AIR 1988 SC 1737). At one time, the traditional view in England was that the executive was not answerable where its action was attributable to the exercise of prerogative power. Professor De Smith in his classical work "Judicial Review of Administrative Action", 4th Edition at pages 285 - 287 states the legal position in his own terse language that the relevant principles formulated by the Courts may be broadly summarized as follows. The authority in which discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it; it must not act under the dictates of another body or disable itself from exercising discretion in each individual case. In the purpo....
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....ns which purport to exclude judicial review are construed restrictively. There are, however certain areas of governmental activity, national security being the paradigm, which the Courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the government's claim is bona fide. In this kind of non-justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the Royal Prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service this is doubtful. Lords Diplock, Seaman and Roskili appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject-matter of a particular power, in that case national security. Many prerogative powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs, but some are reviewable in principle, including the prerogatives relating to the civil service where national security is not involved. Another non-justiciable pow....
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....endment a vested or accrued right which has been given to a trader cannot be taken away. On the facts of the present case, inasmuch as the petitioner's case has not even fallen under the category of custody under customs authority while following the export procedures, there is no question of any accrued right vested with the petitioner. 34. Likewise, the judgment of the Supreme Court in Ashoka Smokeless Coal India (P) Limited and Others v. Union of India and Others reported in 2007 (2) SCC 640 relates to fixing of price regarding essential commodities. In the light of the nationalization of Coal under the Coking (C) Coal Mines (Nationalization) Act, 1972, considering the categorization of consumers into two sectors, the Supreme Court has held that fixation of price of Coal, which is a vital product in Indian industries, should be fair and such policy decision of the executive of the Central Government must be construed in terms of Article 77 of the Constitution of India. The Supreme Court has held that the doctrine of legitimate expectation has been developed in the context of the principles of natural justice, which is construed on the basis of fixation of price on the point o....