TaxTMI 
TaxTMI 
2008 (12) TMI 205
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....ial quantities every year from south East Asian countries like Indonesia and Thailand. According to them, they can conveniently import the same through anyone of the ports on the Eastern Cost. But, the respondents issued the impugned Notification, thereby amending the import policy for certain items as detailed below :- Betel Nuts : Exim Code Item Description Policy Policy conditions 0802 90 10 Whole Free Import allowed only through Mangalore Port. 0802 90 12 Split Free Import allowed only through Mangalore Port 0802 90 13 Ground Free Import allowed only through Mangalore Port 0802 90 19 Other Free Import allowed only through Mangalore Port. The grievance of the petitioners is that the restriction of import of the betel-nuts only through Mangalore Port is highly unreasonable, arbitrary and unconstitutional and therefore, the same is liable to be quashed. 3. The following are the main grounds raised by the petitioners :- (1) The impugned Notification has failed to take into account the fact that bete....
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....near Mangalore Port. The import of betel-nut through Mangalore port will neutralize the freight cost advantage enjoyed by the imports made at ports away from domestic producers in the country. (4) Yet another reason for the Notification is to bring the cost of imported betel-nuts close to the price of domestic betel-nuts, so that the domestic farmers can be provided adequate remunerative price for their produce. (5) The Notification has not restricted free flow of trade and commerce within the territory of India by imposing restriction on import of betel-nuts only through Mangalore Port. The Impugned Notification is neither unreasonable nor does it violate Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with Para 2.1 of the Foreign Trade Policy. 5. Before adverting to the other grounds raised, let me, first, consider the legal position regarding the scope of judicial review of policy decision of the Government, under Article 226 of the constitution of India. 6. Admittedly, the Notification under challenge is part of the export and import policy of the Central Government. In general, such kind of policy decisions of the Central Government, whic....
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....orted in 1984 (3) SCC 465, while dealing with the Court's interference in respect of Import Policy of the Government, the Court has held as follows :- "The import Policy of any country, particularly a developing country, has necessarily to be tuned to its general economic policy founded upon its constitutional goals, the requirements of its internal and international trade, its agricultural and industrial development plans, its monetary and financial strategies and last but not the least the international political and diplomatic overtones depending on "friendship, neutrality or hostility with other countries". There must also be a considerable number of other factors which go into the making of an import policy. Expertise in public and political, national and international economy is necessary before one may engage in the making or in the criticism of an import policy. Courts do not possess the expertise and are consequently incompetent to pass judgment on the appropriateness or the adequacy of a particular import policy". 9. In Bennett Coleman & Co. v. Union of India reported in 1972 (2) SCC 788, the Hon'ble Supreme court has held as follows :- "....The argument of the p....
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....It may be true that such a policy decision of the Government may be against the business interest of a party, but that by itself would not justify to invalidate the policy. Keeping in view the above settled position of law, let me now proceed to examine the facts of the case to find whether the impugned Notification is either arbitrary or unreasonable or unfair etc. so as to fall within the scope of judicial review. 13. At this juncture, it is necessary to know the background of the Notification. According to the statistics available with the Central Government, betel-nuts is grown in more than 4 lakhs acres of land in the States of Karnataka, Kerala and Assam and the total production of betel-nuts of the country is approximately 5 lakh M.T. Large number of people from these areas are depending on its cultivation. But the domestic production does not meet the demand of the consumers. Therefore, the import of betel-nut is allowed. However, import of betel-nuts in large quantities would naturally affect the interest of the home producers of betel-nuts, which would certainly tend to threaten to generate unemployment and other related problems. According to the Central Government, t....
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....licy thereafter, the Central Government; however has been empowered to make provision for prohibiting, restricting or otherwise regulating the export and import of goods, in U.P Co-operative Cane Unions Federation v. West U.P Sugarmills Association and others reported in 2004 5 SCC 430, while interpreting the terms 'regulate' and 'prohibit', the Hon'ble Supreme Court has held "but, ordinarily the word 'regulate' would mean to control or to adjust by rule or to subject to governing principles whereas the word 'prohibit' would mean to forbid by authority or command. The expressions 'regulate' and prohibit' inhere in them elements of restrictions, but it varies in degree". From this authoritative pronouncement of the Hon'ble Supreme Court, it is now beyond any doubt that the Central Government is empowered to regulate the market by imposing appropriate restrictions in respect of imports and exports. The impugned Notification restricting the import has been issued in exercise of the power conferred on the Central Government by the Act. The competency of the Government to issue the said Notification to regulate the import of betel-nuts is not under challenge in these writ petitions. ....
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....t their produces by incurring additional fright charge to the markets near the East Coast which would not be in the interest of the country's economy. Consequently, there will be two markets, one at West Coast where local products would be kept for marketing at a higher cost, whereas there will be another market at the East Coast with low cost. By the time, when the local produce reaches the East Coast, the cost would be uncomparably higher and so, it cannot compete with the imported goods. Instead, if the import is restricted only through Mangalore Port, the importers have to necessarily incur additional freight charges and as a result, they would be impelled to keep the sale price more or less in par with the local produces. 18. The interest of the domestic producers and the workmen employed in the Industry is paramount for the Government. The strategic increase of freight cost would surely generate competition between the home producers and the imported betel-nuts so as to eliminate the monopoly of low cost imported betel-nuts. This will ultimately protect the interest of the home producers. Thus, the object behind the Notification falls within the four corners of the Foreign....
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....I.R. 1967 SC 829); Krishnan Kakkanth v. Government of Kerala (1997 (9) SCC 495). Applying these principles we are unable to hold that the Notifications are arbitrary or unreasonable." "16. In the result, for the forgoing discussion, we find absolutely no merits in the challenge raised by the petitioners to the Notification dated December 12, 2001 and the Notification dated December 19, 2001. The Notifications are legal and valid and based upon the policy framed by the Central Government". The view taken by the Division Bench of Bombay High Court squarely applies to the facts of the present case. 20. A similar Notification restricting import of palm oil through ports in Kerala came to be challenged before the Kerala High Court, on similar grounds in Parison Foods (P) Ltd. v. Union of India reported in CDJ 2008 KER HC 216. A learned Single Judge of Kerala High Court, after having analysed the provisions of the Act as well as the Trade Policy 2004-09 has upheld the Notification, while doing so, the learned Judge has held as follows :- "....Hence, the power to regulate could extend to the authority to prohibit. Therefore, the existence of the power with the DGFT to issue th....
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....)(g) of the Constitution of India. 22. Placing heavy reliance on the said Judgment, the learned counsel for the petitioners would submit that by having a similar view, if the facts involved in the present writ petitions are considered, the Impugned Notification would also face the same fate. But, I am not persuaded to agree with the said argument since the facts are totally distinguishable. In that case, the import of woollen rags were restricted to, through Bombay and Delhi ports only on the ground that there was no proper facility in the other ports to have surveillance of the goods being imported. Taking the view that it is for the Government to provide such facilities in other ports also, the Division Bench held that for the reason that there are no sufficient facilities in other ports, the importers cannot be made to suffer to carry goods to distant places by importing only through Bombay and Delhi ports. The Division Bench also took the view that such import only through these ports would put the importers near these ports in an advantageous position, thereby pushing the other traders to the backseat, so as to impel them to suffer hostile discrimination. But, in our case, ....
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....ngle Judge of this Court in the above writ petition. The learned Judge has taken the view that the Notification violates Article 14, 19(1)(g) and 301 of the Constitution of India mainly on the ground that the reasons stated for restriction that the ports other than Delhi and Bombay do not have the surveillance was not acceptable. The learned Judge has rightly held that Madras port is considered to be one of the ancient and well equipped ports. When that is so, treating the Madras port and the similar ports of this country as secondary ports, thereby projecting the Bombay and Delhi ports alone as fully equipped ports was deprecated by the learned Single Judge. The learned Judge has further held that if any such facility is not already available in Madras Port, it is for the Government to provide such facilities so as to have surveillance of the import. In respect of the said view taken by the learned Judge, I am fully in respectful agreement. But, that view cannot be made applicable to the impugned Notification for the reasons which I have already stated. 25. Yet another reason for imposing restrictions as stated in the counter is to stop illegal import of betel-nuts into India. ....