Calcutta High Court (Appellete Side)
Sanmarg Private Limited vs Union Of India & Ors on 5 October, 2018
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Appellate Side
W.P. No. 11957 (W) of 2016
With
C.A.N. 10268 of 2017
Sanmarg Private Limited
Vs.
Union of India & Ors.
For the Petitioner : Mr. Jaydeep Kar, Sr. Advocate
Mr. Mainak Bose, Advocate
Mr. Shakeel Akhtar, Advocate
For the Union of India : Mr. Kausik Chanda, Ld. A.S.G.
Mr. Bipul Kundalia, Advocate
Mr. Debashis Basu, Advocate
For the Respondent No. 6 : Mr. Rishabh Karnani, Advocate
Hearing concluded on : October 01, 2018
Judgment on : October 05, 2018
DEBANGSU BASAK, J.:-
The petitioner has challenged notification no. 09/2015-20 dated
June 3, 2016 issued by Director General of Foreign Trade.
Learned Senior Advocate for the petitioner has submitted that,
Director General of Foreign Trade has no jurisdiction to issue the
impugned notification. By the impugned notification, a foreign trade
policy is sought to be altered. Assuming that foreign trade policy can
be altered, it has to be done by the Central Government. The Director
General of Foreign Trade cannot be said to be the Central
Government. He has drawn the attention of the Court to the
provisions of the Foreign Trade (Development and Regulation) Act,
1992 and has submitted that Section 6(3) of the Act of 1992 does not
permit a Director General of Foreign Trade to issue any notification in
exercise of powers under Section 3 or 5 of the Act of 1992. The
impugned notification states that, the same has been issued in
exercise of powers conferred under Section 3 of the Act of 1992. He
has referred to Section 19(3) of the Act of 1992 and has submitted
that, the impugned notification has not been laid before the
Parliament in terms of Section 19(3) of the Act of 1992 till date. At
least, nothing has been placed on record to suggest otherwise.
Therefore, even on that score, the impugned notification is non est in
the eye of law.
Learned Senior Advocate for the petitioner has submitted that,
the petitioner is engaged in the business of publication of newspaper.
Such business requires newsprint. Newsprint is imported. The
petitioner does not require large quantity of newsprints for the
quantum of business of the petitioner. The petitioner places orders on
import houses for newsprints. Other newspaper publications not
having large volume of business also places orders for newsprints on
import houses, who makes the requisite supplies. The import houses
imports the newsprints on behalf of such individual newspaper
businesses. The impugned notification affects the right of the
petitioner to carry on business of publication of newspaper. The
impugned notification requires small business persons to comply with
such requisitions which are onerous. By the impugned notification,
the petitioner has to satisfy the customs authorities about the import
requirements at the time of import of the newsprint. Compliance with
such requirement will mean that, the petitioner will have to import the
newsprint in its own name. In doing so, the petitioner will be required
to import large quantities of newsprints. Import of newsprint at such
volume is not economically feasible for the petitioner. Money and
space will get tied down in such process. It is not financially feasible
for a small business house as that of the petitioner to do so.
Referring to Section 18G of the Industries (Development and
Regulation) Act, 1951, learned Senior Advocate appearing for the
petitioner has submitted that, the Central Government had passed the
Newsprint Control Order, 2004. He has referred to the various
provisions of the Control Order of 2004 and has submitted that, the
petitioner was governed by such Control Order. Relying upon 1987
Volume 2 Supreme Court Cases page 602 (State of Haryana v.
P.C. Wadhwa, IPS, Inspector General of Police & Anr.) and 2009
Volume 5 Supreme Court Cases page 46 (Atul Commodities
Private Limited & Ors. v. Commissioner of Customs, Cochin 9)
learned Senior Advocate for the petitioner has submitted that, Director
General of Foreign Trade cannot amend the Foreign Trade Policy. It
can, at best, issue a notification which is clarificatory in nature. The
impugned notification seeks to amend the Policy, which cannot be
done by the Director General of Foreign Trade.
Learned Additional Solicitor General appearing for the
respondent has submitted that, although, the impugned notifications
speaks of exercise of power under Section 3 of the Act of 1992, for all
practical purposes, powers under Section 5 of the Act of 1992 were
exercised. The power of the Central Government to amend the Foreign
Trade Policy being there under Section 5 of the Act of 1992, the
statement in the notification that, powers under Section 3 of the Act of
1992 has been invoked, is of no consequence. The impugned
notification should be read to be one as an exercise of power under
Section 5 of the Act of 1992. Reading the impugned notification as
such, there is no requirement for the notification being placed before
the Parliament in terms of Section 19(3) of the Act of 1992. He has
submitted that, the time period prescribed in Section 19(3) of the Act
of 1992 is directory in nature. He has relied upon 2011 Volume 9
Supreme Court Cases page 1 (K.T. Plantation Private Limited &
Anr. v. State of Karnataka) and 2012 Volume 4 Supreme Court
Cases page 578 (Accountant General, State of Madhya Pradesh v.
S.K. Dubey & Anr.) in support of such contentions.
Learned Additional Solicitor General has submitted that, by the
impugned notification, the Central Government has sought to
implement a change in the policy under Section 5 of the Act of 1992.
The Director General of Foreign Trade is entitled to issue such
notification as powers under Section 5 have been exercised in the
present case. Therefore, there is no requirement for such notification
to be placed before the Parliament. Orders issued under Section 5 of
the Act of 1992 need not be placed before the Parliament under
Section 19(3) of the Act of 1992.
Learned Additional Solicitor General has submitted that, the
Director General of Foreign Trade was empowered by a notification
dated March 24, 1993 to issue orders on behalf of the Central
Government. In the present case, the proposal to issue the notification
was vetted at appropriate levels including the Minister-in-Charge.
Ultimately, the impugned notification was issued. By the impinged
notification, Director General of Foreign Trade has merely
communicated the decision of the Central Government, which he was
authorised to do.
In support of his contentions, learned Additional Solicitor
General has relied upon 2012 Volume 11 Supreme Court Cases
page 321 (Ashok Sadarangani & Anr. v. Union of India & Ors.)
and 2003 Volume 6 Supreme Court Cases page 277 (Air India
Cabin Crew Assn. v. Yeshaswinee Merchant & Ors.).
The petitioner is carrying on business of publishing and printing
a Hindi newspaper by the name of Sanmarg. The petitioner is
registered with the Registrar of Newspapers. The petitioner requires
newsprint for his business. It was obtaining such newsprint from
custom bonded warehouses in terms of the import policy, prior to the
issuance of the impugned notification. The petitioner claims that, its
daily requirement of newsprint is less than 8 metric tons. According to
the petitioner, it is not economically viable for the petitioner to import
large quantity of newsprint as the petitioner would be required to do,
in terms of the impugned notification. The same will entail a huge
expenditure on account of import of newsprint as also infrastructural
requirements such as storage facilities. The petitioner does not have
such capacity or facility. The policy existing prior to the impugned
notification permitted the petitioner to buy the requisite quantity of
newsprint required from custom bonded warehouses without the
petitioner being required to incur huge expenditure on import of
newsprint and mobilize large infrastructural facilities.
The impugned notification dated June 3, 2016 has sought to
amend the import policy no. 2 under exempted code 4801 of Chapter
48 of ITC (HS) 2012 Schedule I (Import Policy). The impugned
notification has been issued by the Director General of Foreign Trade.
The impugned notification records that, it has been issued in exercise
of powers conferred by Section 3 of the Act of 1992 read with
paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-20 as
amended from time to time.
The relevant provisions of the Act of 1992 for the purpose of
consideration of the present writ petition are as follows:-
"2(h). "Order" means any Order made by the Central Government
under section 3;
3. Powers to make provisions relating to imports and exports. --
(1) The Central Government may, by Order published in the Official
Gazette, make provision for the development and regulation of
foreign trade by facilitating imports and increasing exports.
(2) The Central Government may also, by Order published in the
Official Gazette, make provision for prohibiting, restricting or
otherwise regulating, in all cases or in specified classes of cases
and subject to such exceptions, if any, as may be made by or
under the Order, the import or export of goods or services or
technology: Provided that the provisions of this sub-section shall
be applicable, in case of import or export of services or technology,
only when the service or technology provider is availing benefits
under the foreign trade policy or is dealing with specified services
or specified technologies.
(3) All goods to which any Order under sub-section (2) applies shall
be deemed to be goods the import or export of which has been
prohibited under section 11 of the Customs Act, 1962 (52 of 1962)
and all the provisions of that Act shall have effect accordingly.
(4) without prejudice to anything contained in any other law, rule,
regulation, notification or order, no permit or licence shall be
necessary for import or export of any goods, nor any goods shall
be prohibited for import or export except, as may be required under
this Act, or rules or orders made thereunder.
5. Foreign Trade Policy. --The Central Government may, from time
to time, formulate and announce, by notification in the Official
Gazette, the foreign trade policy and may also, in like manner,
amend that policy:
Provided that the Central Government may direct that, in
respect of the Special Economic Zones, the foreign trade policy
shall apply to the goods, services and technology with such
exceptions, modifications and adaptations, as may be specified by
it by notification in the Official Gazette.
6. Appointment of Director General and his functions.--(1) The
Central Government may appoint any person to be the Director
General of Foreign Trade for the purposes of this Act.
(2) The Director General shall advise the Central Government in
the formulation of the foreign trade policy and shall be responsible
for carrying out that policy.
(3) The Central Government may, by Order published in the
Official Gazette, direct that any power exercisable by it under this
Act (other than the powers under sections 3, 5, 15, 16 and 19)
may also be exercised, in such cases and subject to such
conditions, by the Director General or such other officer
subordinate to the Director General, as may be specified in the
Order.
19. Power to make rules.--(1) The Central Government may, by
notification in the Official Gazette, make rules for carrying out the
provisions of this Act.
(2) In particular, and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
following matters, namely:--
(a) the manner in which and the conditions subject to which a
special licence may be issued under sub-section (2) of section 8;
(b) the exceptions subject to which and the person or class of
persons in respect of whom fees may be levied and the manner in
which a licence, certificate, scrip or any instrument bestowing
financial or fiscal benefits may be granted or renewed under sub-
section (1) of section 9;
(c) the class or classes of goods (including the goods
connected with service or technology) for which a licence,
certificate, scrip or any instrument bestowing financial or fiscal
benefits may be granted under sub-section (2) of section 9;
(d) the form in which and the terms, conditions and
restrictions subject to which licence, certificate, scrip or any
instrument bestowing financial or fiscal benefits may be granted
under sub-section (3) of section 9;
(e) the conditions subject to which a licence, certificate, scrip
or any instrument bestowing financial or fiscal benefits may be
suspended or cancelled under sub-section (4) of section 9; 3
(ea) the matter in which goods the import of which shall be
subject to quantitative restrictions, may be identified and the
manner in which the causes of serious injury or causes of threat of
serious injury in relation to such goods may be determined under
sub-section (3) of section 9A;
(f) the premises, goods (including the goods connected with
the service or technology), documents, things and conveyances in
respect of which and the requirements and conditions subject to
which power of entry, search, inspection and seizure may be
exercised under sub-section (1) of section10;
(g) the class or classes of cases for which and the manner in
which an amount, by way of settlement, may be determined under
sub-section (4) of section 11;
(h) the requirements and conditions subject to which goods
(including the goods connected with the service or technology) and
conveyances shall be liable to confiscation under sub-section (8) of
section 11;
(i) the manner in which and the conditions subject to which
goods (including the goods connected with the service or
technology) and conveyances may be released on payment of
redemption charges under sub-section (9) of section 11;
(j) any other matter which is to be, or may be, prescribed, or
in respect of which provision is to be, or may be, made by rules.
19(3). Every rule and every Order made by the Central
Government under this Act shall be laid, as soon as may be after it
is made, before each House of Parliament, while it is in session, for
a total period of thirty days which may be comprised in one
session or in two or more successive sessions, and if, before the
expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any
modification in the rule or the Order or both Houses agree that the
rule or the Order should not be made, the rule or the Order, as the
case may be, shall thereafter have effect only in such modified
form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule or the Order."
Section 2(h) of the Act of 1992 defines order to mean any order
made by the Central Government under Section 3. Section 3(1) allows
the Central Government to publish an Order in the Official Gazette
making provision for the development and regulation of foreign trade
by facilitating imports and increasing exports. Section 3(2) empowers
the Central Government to make provisions relating to import and
exports. It allows the Central Government to make provision for
prohibiting, restricting or otherwise regulating, in all cases or in
specified classes of cases and subject to such exceptions, if any, as
may be made by or under an order, the import or export of goods or
services or technology. In respect of import or export of services and
technology the provisions of Section 3(2) will apply only when the
service or technology provider avails benefits under the Foreign Trade
Policy or deals with specified services or specified technologies. The
power of the Central Government to prohibit, restrict and otherwise
regulate the import or export of goods or services or technology has to
read along with its powers under Section 11 of the Customs Act, 1962.
This appears from Section 3(3) of the Act of 1992. Section 5 of the Act
of 1992 allows the Central Government to formulate and amend the
Foreign Trade Policy from time to time. Notwithstanding the Central
Government formulating and assuming a Foreign Trade Policy and
even amending it subsequently, it can, under Section 3 of the Act of
1992, make provision for prohibiting, restricting or otherwise
regulating import or export of goods or services or technology. It can
do so if it is of the opinion that, the purposes enumerated in Section
11 of the Customs Act, 1962 stands satisfied so to do. Section 6 of the
Act of 1992 deals with the appointment of the Director General of
Foreign Trade and its functions. Sub-section 3 of Section 6 allows the
Central Government to direct that any power exercisable by it under
the Act of 1992 may also be exercised by the Director General or such
officer subordinate to the Director General as may be specified in the
order. However, Section 6(3) states that the Central Government
cannot empower the Director General or any officer sub-ordinate to
the Director General to exercise any powers under Section 3, 5, 15, 16
and 19 of the Act of 1992. It is the contention of the respondents that,
the Director General of Foreign Trade has been accorded sanction to
authenticate orders/notifications/other instruments in the name of
the Central Government under the provisions of the Act of 1992. In
this regard reliance has been placed on an Order dated March 24,
1993. Such order is as follows:-
ORDER
No. 1/93 .....7-11013/1/9.2-E.III). Sanction of the President is hereby accorded to grant the status of ex-officio Addl. Secretary to the Government of India to the Director General, Foreign Trade, so as to enable him to authenticate Orders/Notifications/Other instruments in the name of the Central Government under the provisions of the Foreign Trade (Development and Regulation) Act, 1992.
This issues with the concurrences of the Finance Division vide their Dy. No. 930/FD/93, dated 24.3.93.
The Order dated March 24, 1993 has to be read in the context of Section 6 of the Act of 1992. The Director General of Foreign Trade can be empowered by the Central Government to exercise powers under the Act of 1992 except the powers under Sections 3, 5, 15, 16 and 19. The impugned notification claims to be one issued under exercise of powers under Section 3 of the Act of 1992. Therefore, under Section 6(3) of the Act of 1992, notwithstanding the Order dated March 24, 1993, the Director General of Foreign Trade has no jurisdiction to issue the same. Even if the contention of the Union of India that, the impugned notification is an exercise of powers under Section 5 of the Act of 1992 is accepted, then also, Director General of Foreign Trade has acted without jurisdiction, in view of Section 6(3). In view of Section 6(3), a Director General of Foreign Trade cannot be considered as the Central Government within the meaning of Section 3 and 5 of the Act of 1992. Furthermore Section 6(3) of the Act of 1992 requires an order passed thereunder to be published in the Official Gazette. Nothing is placed on record to suggest that, the Order dated March 24, 1993 was published in the Official Gazette. In absence of a publication in the Official Gazette, the Order dated March 24, 1993 cannot be said to be one under Section 6(3) of the Act of 1992.
It has been contended on behalf of the respondents that, the impugned Order although speaks of invocation of Section 3 of the Act of 1992, in effect, it is an exercise of powers under Section 5 of the Act of 1992.
Section 5 of the Act of 1992 allows the Central Government to formulate the foreign trade policy and to amend it. Section 3 of the Act of 1992 allows the Central Government to make provisions for prohibiting, restricting or otherwise regulating import or export of goods or services or technology. In the present case, by the impugned notification, a foreign trade policy has been sought to be amended. The Central Government could have done so in exercise of powers under Section 5 of the Act of 1992. It has however chosen to involve the provisions of Section 3 of the Act of 1992, as appearing in the impugned notification.
P.C. Wadhwa (supra) has considered the provisions of All India Services (Confidential Rolls) Rules, 1970 and has held that, the period prescribed in Rule 5, 6, 6A and 7 are directory but requires to be substantially complied with. Atul Commodities Private Limited (supra) has considered the notification issued under the Export and Import Policy, 2004-09. It has held that, amendment and clarifications are two distinct concepts. Power to amend the Import and Export policy is vested exclusively with the Central Government. Director General of Foreign Trade can only issue clarifications.
In the present case, by the impugned notification, the Director General of Foreign Trade has sought to amend the existing policy. On the strength of Atul Commodities Private Limited (supra), it can be said that, Director General of Foreign Trade has no jurisdiction to amend the Export and Import Policy. The impugned notification herein, has not been suggested to be clarificatory in nature.
K.T. Plantation Private Limited & Anr. (supra) has held that, non-laying of a notification required to be laid before the State Legislature under the provisions of Karnataka Land Reforms Act, 1961, is curable.
There was difference of opinion in S.K. Dubey & Anr. (supra) and therefore the registry was directed to place the papers before the Hon'ble the Chief Justice for it to be assigned to an appropriate Bench. Ashok Sadarangani & Anr. (supra) has held that reference of a case to a Larger Bench for decision does not mean that the law declared need not be applied or that the other proceedings involving the same issue should remain stayed till the decision is rendered. Air India Cabin Crew Association (supra) has held that, executive action of Central Government not formally expressed to have been taken in the name of the President is not ipso facto void.
In view of the discussion above, the impugned notification no. 09/2015-20 dated June 3, 2016 issued by the Director General of Foreign Trade is quashed. No further order need be passed in C.A.N. No. 10268 of 2017. C.A.N. 10268 of 2017 and W.P. No. 11957(W) of 2016 are disposed of accordingly. No order as to costs.
Urgent certified website copies of this judgment and order, if applied for, be made available to the parties upon compliance of the requisite formalities.
[DEBANGSU BASAK, J.] Later:-
The prayer for stay made on behalf of the respondents is considered and rejected.
[DEBANGSU BASAK, J.]