TaxTMI 
TaxTMI 
2026 (3) TMI 666
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....Advs. Mr. Ripudaman Bhardwaj, CGSC Mr. Gaurav Barathi, Mr. Vishal Thakur, Mr. Chirantan Priyadarshan, Advs. for intervenor, Mr. Ripu Daman Bharadwaj, CGSC with Mr. Kushagra Kumar and Mr. Amit Kumar Rana, Advs. for UOI, Ms. Arti Bansal CGSC with Ms. Shruti Goel. Advs. JUDGMENT PER OM PRAKASH SHUKLA, J. 1. Through the present Letters Patent Appeals ["LPA"], the Appellants assail the correctness of the common judgment dated 14.07.2020 ["Impugned Judgment"], rendered by the learned Single Judge of this Court in W.P. (C) Nos. 7676/2019, 11123/2019, 11125/2019, and 13124/2019. These writ petitions were filed by the Appellants raising substantially similar grievances, primarily concerning the refusal of Respondent No. 2 to register the Appellants' sales contracts for the import of poppy seeds from the Republic of Turkey ["Turkey"], in accordance with the Guidelines dated 25.06.2019 ["Guidelines"] issued by Respondent No. 1. Furthermore, the Appellants raised concerns before the learned Single Judge regarding the fixation of a Country Cap, which was alleged to have been determined in contravention of the applicable framework. 2. The Appellants contended that poppy seeds wer....
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....y's crop-year production, carry-forward stock, and its domestic or export requirements. 9. In accordance with the MOU, CBN issued a Public Notice dated 25.06.2019, along with the Guidelines, specifying the process for registering sales contracts pertaining to the import of poppy seeds from Turkey for the crop year 2018-19. Thereafter, Turkish exporters proceeded to register their sales contracts with the TMO. 10. However, at the time of the issuance of the Public Notice and Guidelines, the Country Cap for the crop year 2018-19, which was required to be fixed as mandated by the MOU, had not yet been fixed. Aggrieved by non-fixation of the Country Cap, the Appellants filed W.P.(C) No. 7676/2019 before this Court, contending that the registration process could not lawfully proceed in the absence of the fixation of the Country Cap. The Appellants argued that no steps towards registration ought to be permitted until the Country Cap was fixed. 11. On 30.07.2019, the Respondents conceded before the learned Single Judge that the Country Cap had not yet been fixed. The Respondents further submitted that, in view of the strict timelines, no imports would be permitted for the cro....
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.... in the connected appeals also filed separate writ petitions, aggrieved by the non-issuance of import permits by CBN despite registration of their sales contracts with TMO. 19. In response to this grievance, CBN sought clarification from the TMO. By a letter dated 30.10.2019, the TMO informed CBN that the Appellants' contracts could neither be approved nor uploaded, as the notified Country Cap of 18,000 MT had already been exhausted by other registered contracts. It was further indicated that these sales contracts could be uploaded if the Government of India revised the Country Cap, and also indicated availability of 26,540 MT of poppy seeds in Turkey for export to India. 20. Relying on the above communication regarding the availability of an additional quantity of poppy seeds in Turkey for export, the Appellants submitted representations to the respondents on 01.01.2020 and 02.01.2020, seeking enhancement of the provisional Country Cap. In response, it was conveyed that the final Country Cap for the crop year 2019-20 had been fixed at 18,000 MT in accordance with the applicable Guidelines. 21. Aggrieved by both the fixation of the final Country Cap at 18,000 MT and the no....
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....disclosed rationale or justification, was manifestly arbitrary and discriminatory. 25. Learned Senior Counsel further argued that, in terms of the Guidelines read with the MOU, the registration of a sales contract with the TMO ought to have been automatically reflect on the portal accessible to CBN. The subsequent insistence on a separate stage of "uploading", as indicated in the communication dated 30.10.2019, introduced an artificial distinction between registration and uploading that was not contemplated under the governing framework. This, according to the Appellants, contravened both the Guidelines and the MOU, by creating an additional procedural barrier not envisaged under the framework. 26. It was further contended that the non-reflection of the Appellants' registrations on the ground of the exhaustion of the Country Cap was itself contrary to the MOU, which envisages that registrations shall not exceed the notified quantity. The Appellants argued that, in such circumstances, the CBN should have sought clarification from the TMO regarding how excess registrations were entertained. Additionally, it was submitted that the CBN ought to have objected to the introduction o....
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....l Development Corpn. v. Platinum Entertainment (2015) 1 SCC 558, Mannalal Jain v. State of Assam and Others (1961) SCC OnLine SC 355, Bharti Airtel Ltd. v. Union of India (2015) 12 SCC 1 and Haridas Exports vs. All India Float Glass Manufacturers' Association (2002) 6 SCC 600, to support their submissions. Submissions of learned CGSC Mr. Mukul Singh 29. Per contra, learned Counsel for the Respondents contended that under the Guidelines and the MOU, the registration of sales contracts was to be undertaken exclusively by the TMO on its portal. Any grievance related to non-registration or non-reflection of contracts, therefore, lies within the domain of the TMO. CBN's role is limited to accessing the system and verifying registrations reflected therein for the purpose of granting import licenses. It was submitted that no fault could be attributed to the CBN for the non-reflection of the Appellants' contracts in the system, as CBN had acted strictly in accordance with the prescribed procedure. 30. Learned Counsel further submitted that there was no violation of Articles 14 or 19(1)(g) of the Constitution. Import regulation is a matter of economic policy framed in public in....
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....refrain from substituting it with its own view. 35. Therefore, to begin with, it is appropriate to reproduce the relevant portion of the Impugned Judgment, which reads as follows: "31. In view of the above, it is can be seen that the respondent no.2 is to verify the fact of registration of the sales contract by the 1MO through the online system maintained by the TMO. The submission of the respondents that the contract of the petitioners were not found as registered on the online system maintained by the TMO, has not been controverted by the petitioners by production of any document. The only submission made is based on the. document which shows that a registration number has been granted to the petitioners. Incase, even after the grant of such registration, the sale contracts are not being shown on the online system, the petitioners should have approached the TMO for the due reflection of such contracts on its online system. However, again, no document has been filed by the petitioners to show any such attempt by the petitioners or the result thereof. The reasons for non-reflection of the contracts of the petitioners on the online system are therefore, not discernable a....
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....site to reproduce the relevant clauses hereunder- "III. Procedure (i) Once the application is received by Narcotics Commissioner, requesting for registration of sales contract for import of poppy seeds from Turkey, the office of the Narcotics Commissioner shall verify the fact of registration of sales contract by TMO (through online system maintained by TMO). (ii) If the sales contract is found to be registered by TMO, Narcotics Commissioner will grant provisional registration to importer if condition as specified in Para-II are fulfilled. Such provisional registration will be sent to the importer and the online system maintained by TMO shall be up-dated accordingly. (iii) The applicant importer, on receiving provisional registration will be required to open Irrevocable Letter of Credit (ILC) in favour of Turkish Exporter or make advance payment to the extent of minimum 20% of total contract value of qty. allowed to be registered in provisional registration. Explanation: Contract value for the purpose of this clause will be computed proportionately in case quantity allowed to be imported under provisional registration is less than the qu....
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....the CBN to "register the sales contract registered by TMO as per details accessed on the online system maintained by TMO". 39. The scheme emerging from these clauses is clear: the portal is to be maintained solely by the TMO, and exporters are required to register their sales contracts with the TMO. The role of the CBN is restricted to accessing the portal and verifying the sales contracts reflected therein, after which the CBN registers the contracts. 40. The limited role of the CBN is further reinforced by Clauses (i) and (ii) of the Guidelines, which confine its function to verification of sales contracts through the portal maintained by the TMO. It is only when the sales contracts are reflected on the portal that the CBN can proceed to grant registration. Thus, CBN's role is purely consequential and dependent upon the reflection of contracts by the TMO on the portal. 41. In this case, it is evident from the letter dated 30.10.2019 that the Appellants' sales contracts were not reflected on the portal accessible to the CBN, as the said contract could not be uploaded by the TMO since the Country Cap had already been exhausted due to other sales contracts. Once it is estab....
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....lications, shall be uploaded by them with CBN, for issuance of Import Permits." (emphasis supplied) 44. Article III (5) of the MOU further highlights the distinction between "registration" and "uploading", although for CBN, by expressly stating that "CBN shall upload the details of sales contract so registered by it on the online system". Therefore, uploading is a distinct step that occurs after registration, rather than being an automatic outcome of registration. Accordingly, we are unable to concur with the learned Senior Counsel for the Appellants that the reflection of the portal accessible to CBN is an inescapable sequitur to mere registration with the TMO. 45. It is equally clear that if mere registration with the TMO were to automatically result in reflection on the portal accessible to the CBN, by dispensing with the stage of uploading, the mechanism would effectively be reduced to a rigid first-come-first-serve system, thereby denying an equitable opportunity of even participation to all. 46. With respect to the mandate under Article 14 and 19 of the Constitution, we concur with the law laid down in Centre for Public Interest Litigation (supra), Natural R....
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....tead of continuing registration on first come first serve basis. CBN's failure to do so, it was argued, amounted to a violation of Article 14, thereby making it a fit case for the exercise of writ jurisdiction by this Court. 50. In Union of India and Ors. v. Hindustan Development Corporation and Ors (1993) 3 SCC 499, the Supreme Court explained the scope and limits of the doctrine of legitimate expectation in safeguarding against arbitrariness, if any, in the exercise of power by public authorities. It was observed as follows: "28. Time is a three-fold present: the present as we experience it, the past as a present memory and future as a present expectation. For legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right. However earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves cannot amount to an assertable expectation and a mere disappointment does not attract legal consequences. A pious hope even leading to a moral obligation cannot amount to a legitimate expectati....