Case Note & Summary
The petitioner, Larsen & Toubro Limited, a company incorporated under the Indian Companies Act, 1913, challenged a Letter dated 1-12-2016 and a Show Cause Notice dated 22-7-2016 issued by the Foreign Trade Development Officer and the Deputy Director General of Foreign Trade, Mumbai. The petitioner had obtained an Advance Authorisation Licence No. 0310424318 dated 26-3-2007 for import of materials without payment of customs duty, subject to an export obligation. The petitioner exported the goods and submitted ARE-1 forms as proof of export under paragraph 4.25 of the Handbook of Procedures 2009-14. The respondents rejected the ARE-1 forms and issued a show cause notice alleging non-fulfillment of export obligation. The petitioner argued that ARE-1 forms are valid proof of export and the respondents' action was arbitrary. The court, after hearing both sides, held that the respondents had no jurisdiction to reject the ARE-1 forms and quashed the impugned letter and show cause notice. The court directed the respondents to accept the ARE-1 forms and redeem the Advance Authorisation Licence forthwith.
Headnote
A) Foreign Trade - Export Obligation - Advance Authorisation - Proof of Export - Paragraph 4.25 of Handbook of Procedures 2009-14 - The petitioner sought redemption of Advance Authorisation Licence by submitting ARE-1 forms as proof of export. The respondents rejected the forms and issued a show cause notice. The court held that ARE-1 forms are valid proof of export under paragraph 4.25 and the respondents' action was arbitrary and without jurisdiction. (Paras 1-10)
B) Administrative Law - Natural Justice - Show Cause Notice - The court found that the show cause notice was issued without proper application of mind and without considering the petitioner's explanation. The court quashed the notice and directed the respondents to accept the ARE-1 forms and redeem the licence. (Paras 11-15)
Issue of Consideration
Whether the respondents were justified in rejecting the ARE-1 forms as proof of export and issuing a show cause notice for non-fulfillment of export obligation under the Advance Authorisation scheme.
Final Decision
The court allowed the writ petition, quashed the impugned letter dated 1-12-2016 and show cause notice dated 22-7-2016, and directed the respondents to accept the ARE-1 forms and redeem the Advance Authorisation Licence No. 0310424318 dated 26-3-2007 forthwith.
Law Points
- Export obligation
- Advance Authorisation
- ARE-1 forms
- Proof of export
- Paragraph 4.25 of Handbook of Procedures 2009-14
- Foreign Trade Policy
- Natural justice
Case Details
Writ Petition No.14375 of 2016
S.C. Dharmadhikari, Prakash D. Naik
Mr. Vikram Nankani, Senior Advocate with Mr. Prakash Shah, Mr. Ashish Chouhan, Mr. Prithviraj Choudhari & Mr. Jas Sanghavi i/by M/s. PDS Legal for the Petitioner; Mr. R.V. Desai, Senior Advocate with Mr. Parag Vyas for the Respondents
Union of India through Joint Secretary, Ministry of Commerce; Joint Secretary, Ministry of Law, Justice & Company Affairs; Director General of Foreign Trade; Zonal Additional Director General of Foreign Trade; Zonal Deputy Director General of Foreign Trade
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Nature of Litigation
Writ petition challenging a letter and show cause notice regarding rejection of ARE-1 forms as proof of export under Advance Authorisation scheme.
Remedy Sought
Quashing of impugned letter and show cause notice, and direction to respondents to accept ARE-1 forms and redeem Advance Authorisation Licence.
Filing Reason
Respondents rejected ARE-1 forms submitted as proof of export and issued show cause notice for alleged non-fulfillment of export obligation.
Issues
Whether the respondents were justified in rejecting ARE-1 forms as proof of export under paragraph 4.25 of Handbook of Procedures 2009-14.
Whether the show cause notice was issued without jurisdiction and in violation of principles of natural justice.
Submissions/Arguments
Petitioner argued that ARE-1 forms are valid proof of export under paragraph 4.25 and respondents' action was arbitrary.
Respondents argued that ARE-1 forms were not acceptable as proof of export and the show cause notice was valid.
Ratio Decidendi
ARE-1 forms are valid proof of export under paragraph 4.25 of the Handbook of Procedures 2009-14, and the respondents had no jurisdiction to reject them or issue a show cause notice for non-fulfillment of export obligation.
Judgment Excerpts
The writ petition challenges a Letter dated 1-12-2016 issued by the Foreign Trade Development Officer, and a Show Cause Notice dated 22-7-2016 issued by the Deputy Director General of Foreign Trade, Mumbai.
The petitioner seeks a writ of certiorari or any other writ, order or direction praying for calling of the records and proceedings and after scrutiny and verification of the impugned Letter, same be quashed and set aside and thereafter the respondents be directed to forthwith redeem the Advance Authorisation Licence No.0310424318, dated 26-3-2007 by accepting ARE1s as proof of export under paragraph 4.25 of Handbook of Procedures 2009-14.
Procedural History
The petitioner filed a writ petition in the High Court of Judicature at Bombay challenging a letter dated 1-12-2016 and a show cause notice dated 22-7-2016. The court issued rule and with consent of both sides disposed of the petition finally.
Acts & Sections
- Indian Companies Act, 1913:
- Foreign Trade (Development and Regulation) Act, 1992:
