Case Note & Summary
The petitioners, M/s. Harihar Collections and M/s. Raj Grow Impex LLP, are engaged in the import and export of agricultural commodities. They imported peas (yellow peas, green peas, etc.) under bills of entry dated 18.11.2019 and 01.11.2019. However, the Government of India, by notification dated 29.03.2019, amended the import policy under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, placing peas under the restricted category. The petitioners had entered into contracts for import prior to this amendment and had obtained necessary permissions. The respondents, including the Customs authorities, refused to clear the goods citing the amendment. The petitioners filed writ petitions under Article 226 of the Constitution seeking quashing of communications dated 02.09.2020 and directions to clear the goods. The court considered whether the amendment applied to pre-existing contracts. It held that the amendment was prospective and that the petitioners' contracts were saved by the transitional provisions in the Foreign Trade Policy, which allow imports under contracts entered into before the amendment. The court found the communications arbitrary and directed the respondents to clear the goods. The judgment emphasizes the principle of legitimate expectation and the need for administrative fairness.
Headnote
A) Foreign Trade - Import Policy - Restricted Goods - Section 3 Foreign Trade (Development and Regulation) Act, 1992 read with Foreign Trade Policy 2015-20 - Petitioners imported peas under bills of entry dated 18.11.2019 and 01.11.2019, but the import policy was amended on 29.03.2019 placing peas under restricted category - Petitioners had entered into contracts prior to the amendment and obtained necessary permissions - Respondents refused clearance citing the amendment - Court held that the amendment applies prospectively and petitioners' contracts were saved by the transitional provisions in the Foreign Trade Policy - Directed respondents to clear the goods (Paras 1-24).
Issue of Consideration
Whether the petitioners are entitled to clearance of imported peas under the restricted category based on contracts entered into prior to the amendment notification dated 29.03.2019, and whether the communications dated 02.09.2020 denying clearance are arbitrary and illegal.
Final Decision
The court allowed the writ petitions, quashed the communications dated 02.09.2020, and directed the respondents to clear the imported goods.
Law Points
- Foreign Trade Policy
- Legitimate Expectation
- Import Policy Amendment
- Restricted Goods
- Section 3 Foreign Trade (Development and Regulation) Act 1992
- Paragraphs 1.02 and 2.01 Foreign Trade Policy 2015-20
Case Details
2020 LawText (BOM) (10) 21
Writ Petition (L) No.3503 of 2020 and Writ Petition (L) No.3502 of 2020
Ujjal Bhuyan, Abhay Ahuja
Dr. Sujay Kantawala with Mr. P. Choudhari, Mr. Samsher Garud and Ms. Juhi Valia i/b. Jaykar & Partners for the petitioner; Mr. Anil C. Singh, ASG with Mr. Pradeep S. Jetly, Senior Advocate and Mr. J. B. Mishra for Respondent Nos.4 to 6; Ms. Faranaaz Karbhari with Mr. Ishwar Ahuja and Ms. Khushboo Rupani for Respondent No.7
M/s. Harihar Collections and M/s. Raj Grow Impex LLP
Union of India through the Secretary, Ministry of Commerce and others
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Nature of Litigation
Writ petition under Article 226 of the Constitution challenging communications denying clearance of imported goods and seeking direction to clear the goods.
Remedy Sought
Petitioners sought quashing of communications dated 02.09.2020 and direction to respondents to clear imported peas under bills of entry.
Filing Reason
Respondents refused to clear imported peas citing amendment to import policy placing peas under restricted category, despite petitioners having entered into contracts prior to the amendment.
Issues
Whether the amendment to import policy dated 29.03.2019 applies to imports under contracts entered into prior to the amendment?
Whether the communications dated 02.09.2020 denying clearance are arbitrary and illegal?
Submissions/Arguments
Petitioners argued that they had entered into contracts prior to the amendment and obtained necessary permissions, and the amendment should not apply retrospectively.
Respondents argued that the amendment placed peas under restricted category and therefore clearance cannot be granted.
Ratio Decidendi
The amendment to import policy placing peas under restricted category is prospective and does not affect imports under contracts entered into prior to the amendment. The transitional provisions in the Foreign Trade Policy save such contracts, and the respondents' refusal to clear the goods was arbitrary.
Judgment Excerpts
By filing this petition under Article 226 of the Constitution of India, petitioner has sought for the following reliefs:-
Government of India in the Ministry of Commerce and Industry (Department of Commerce) had issued a notification dated 29.03.2019 in exercise of powers conferred by section 3 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-20 amending the import policy in respect of peas...
Procedural History
The writ petitions were filed on 06.10.2020 and heard together. The court disposed them off by common judgment and order on 15.10.2020.
Acts & Sections
- Foreign Trade (Development and Regulation) Act, 1992: Section 3
- Constitution of India: Article 226
