Gujarat High Court
Pp Softtech Private Limited vs Union Of India on 16 February, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/19031/2023 ORDER DATED: 16/02/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 19031 of 2023
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PP SOFTTECH PRIVATE LIMITED
Versus
UNION OF INDIA
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Appearance:
MR G H VIRK(7392) for the Petitioner(s) No. 1
MR PRASHANTH S UNDURTI (10983) for the Petitioner(s) No. 1
MR HARSHEEL D SHUKLA(6158) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 16/02/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) [1] By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs:
"A. Issue appropriate writ, order and/or direction, directing the respondent to permit the petitioner to export / ship an aggregate quantity of 4232 MT of Non Basmati White Rice (equalling to 161 nos. of 20 Feet Containers) already procured by the petitioner prior to the implementation of the Notification dated 20.07.2023 by the Directorate General of Foreign Trade at Annex.-B more particularly the consignments earmarked as Shipping Bill Nos.2363518, 2363521, 2494419, 2349651, 2454059, 2466653, 2452229, 2480893 and 2486332, by the Indian Customs EDI system; at Annex.-F. B. Pending the adjudication, hearing and final disposal of the captioned petition, direct the respondent to permit the petitioner Page 1 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined to export / ship an aggregate quantity of 4232 MT of Non Basmati White Rice (equalling to 161 nons. of 20 Feet Containers) already procured by the petitioner prior to the implementation of the Notification dated 20.07.2023 by the Directorate General of Foreign Trade at Annex.-B more particularly the consignments earmarked as Shipping Bill Nos.2363518, 2363521, 2494419, 2349651, 2454059, 2466653, 2452229, 2480893 and 2486332, by the Indian Customs EDI system at Annex.-F. C. Issue ex parte, ad interim relief in terms of prayer clause 38(B), above;
D. Grant any such other and/or further relief(s) that this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
[2] The brief facts of the case are that the petitioner is a company incorporated under the Companies Act, 2013 and is engaged in the business of export of various agricultural commodities such as Basmati and Non-Basmati Rice. The petitioner also deals with import and supply of Fuel Oil and Base Oil.
[2.1] It is the case of the petitioner that pursuant to the Notification No.20/2023 dated 20th July 2023 issued by the respondent No.1 - Directorate General of Foreign Trade (for short, "DGFT"), Department of Commerce, Government of India, the Export Policy of Non-Basmati White Rice (semi-milled or wholly milled rice, whether or not polished or glazed: Other) under ITC Page 2 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined HS Codes 1006 30 90 came to be amended, whereby the export of the said commodity was put under the prohibited category.
[2.2] In view of the said Notification, the petitioner was unable to perform and service numerous "purchase contracts"
executed by it for exporting more than 4232 Metric Tonnes of Non- Basmati White Rice.
[3] The petitioner has, therefore, approached this Court with the aforesaid prayers to direct the respondent to permit the petitioner to export the Non-Basmati White Rice, for which the purchase contracts are executed by the petitioner prior to the said Notification.
[4] Learned advocate Mr. G. H. Virk for the petitioner submitted that the petitioner has already entered into various purchase contracts and thereby, is duty bound to export the Non-Basmati White Rice and the impugned Notification dated 20th July 2023 prohibits the export of Non-Basmati White Rice, which was a free commodity available for export without prohibition prior to issuance of such Notification. It was submitted that by the said Page 3 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined Notification, the Export Policy of the commodity has been changed from "free" to "prohibited" and the exceptions made in the said Notification are not applicable to the facts of the case of the petitioner. It was also pointed out that a Trade Notice dated 18 th August 2023 also does not provide any exception to the facts of the case of the petitioner. As the petitioner has already filed shipping bills, for which summary has been issued by the customs authority, however, prior to the issuance of Notification at 21:57:01 hours on 20th July 2023, the petitioner could not act to fall within any exceptions carved out in the said Notification and accordingly, the petitioner is unable to export the Non-Basmati White Rice and because of the said Notification and 4232 Metric Tonnes of the commodity in question is lying at the godowns of the petitioner at Gandhidham - Kachchh, Gujarat.
[5] It was further submitted that the entire quantity of commodity sought to be exported by the petitioner is approximately 1.94% of the entire quantity already permitted by the respondent for export post implementation of the Notification dated 20th July 2023 i.e. approximately 2,18,000 Metric Tonnes, Page 4 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined and thereby, the petitioner is required to be permitted to export 4232 Metric Tonnes of the said commodity.
[6] It was further submitted that the conduct of the respondent defeats the purpose and object behind the implementation of the Notification since procuring additional quantity of commodity from the open market, the respondent is further creating scarcity and causing increase in the price of the commodity in the open market. [7] In support of his submissions, reliance was placed on the order dated 29th November 2023 passed by the Hon'ble Andhra Pradesh High Court in IA No.2 of 2023 in Writ Petition No.25933 of 2023, wherein the similar circumstances, the Hon'ble Andhra Pradesh High Court, after relying upon the orders passed in Writ Petitions Nos.32049 of 2022 and other similar matters, permitted the writ applicant to export the goods, for which the purchase contract was entered into so as to discharge the obligations on the ground that the restrictions imposed in the Notification operate retrospectively and impede the traders from honouring their obligations and such impediment is impermissible being in violation of the doctrine of legitimate expectation.
Page 5 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined [8] Learned advocate Mr. Virk for the petitioner also relied upon
the order passed by the Hon'ble Bombay High Court in the case of M/s. Bharti Foods, Bhowari vs. Union of India (Writ Petition No.6539 of 2023 and other allied matters vide order dated 10 th November 2023), wherein the Bombay High Court permitted the export of Non-Basmati White Rice that was stored by the petitioners therein at the concerned warehouses prior to 20 th July 2023 subject to outcome of the writ petition with a rider that in case the petitioners therein fail in the writ petition, the respondents authorities would be free to take recourse to the provisions under Sections 113(D) and 114 of the Customs Act, 1962. [9] Learned advocate Mr. Virk also referred to and relied upon the decision of this Court in the case of M/s. Maya Agri Impex Pvt Ltd vs. Union of India (R/Special Civil Application No.16017 of 2023 decided on 27th September 2023).
[10] It was further submitted that considering the above decisions and peculiar facts of the case of the petitioner that the petitioner is under obligation to export the Non-Basmati White Rice, the Page 6 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined respondent may be directed to permit the petitioner to export 4232 Metric Tonnes commodity in question lying in the warehouse of the petitioner.
[11] On the other hand, learned Standing Counsel Mr. Harsheel Shukla appearing for the respondent submitted that the impugned Notification dated 20th July 20223 issued for the purpose of putting a ban on the export of Non-Basmati White Rice as the prices were rising in the domestic market by the Government of Gujarat and it is a policy decision of the Government, therefore no interference be made by this Court permitting the petitioner to export the commodity in violation of the said Notification as the petitioner is not entitled to export such commodity and more particularly, as the petitioner is not falling in any of the exceptions provided in the said Notification.
[12] In support of his submissions, reliance was placed by the learned advocate Mr. Shukla on the decision of the Hon'ble Delhi High Court in the case of VI Exports India Private Limited vs. Union of India (Writ Petition (C) No.11649 of 2023 decided on 9 th January 2024), wherein in the similar facts, the Hon'ble Delhi High Page 7 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined Court dismissed the writ petition relying upon the decisions of the Hon'ble Apex Court in the case of State of West Bengal vs. Subhas Kumar Chatterjee (2010) 11 SCC 694 and in the case of CCE vs. Hari Chand Shri Gopal (2011) 1 SCC 236. It was further pointed out that the Hon'ble Delhi High Court has also considered the decisions of the Hon'ble Andhra Pradesh High Court as well as of this Court.
[13] Having heard the learned advocates for the respective parties and after considering the material on record, it would be germane to refer to the Notification No.20/2023 dated 20 th July 2023 along with exceptions, whereby the export of the Non-Basmati White Rice is prohibited by the DGFT, which reads as under:
"Government of India Department of Commerce Directorate General of Foreign Trade Vanijya Bhawan, New Delhi Notification No.20/2023 New Delhi, Dated 20th July 2023.
Subject : - Amendment in Export Policy of Non-Basmati rice under HS Code 1006 30 90.
S.O.(E) The Central Government, in exercise of powers
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NEUTRAL CITATION
C/SCA/19031/2023 ORDER DATED: 16/02/2024
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conferred by Section 3 read with Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992), as amended, read with Para 1.02 and 2.01 of the Foreign Trade Policy, 2023, hereby amends the Export Policy of Non-basmati rice against ITC (HS) code 1006 30 90 of Chapter 10 of Schedule
2 of the ITC (HS) Export Policy, as under:
ITC HS Code Description Export Revised Export Policy Policy 1006 30 90 Non-basmati white rice Free Prohibited (Semi-milled or wholly milled rice, whether or not polished or glazed: Other)
2. The Notification will come into immediate effect. The provisions as under Para 1.05 of the Foreign Trade Policy, 2023 regarding transitional arrangement shall not be applicable under this Notification for export of Non-basmati rice. Consignments of Non-basmati rice will be allowed to be exported under following conditions:
i. where loading of Non-basmati rice on the ship has commenced before this Notification;
ii. where the shipping bill is filed and vessels have already berthed or arrived and anchored in Indian ports and their rotation number has been allocated before this Notification; The approval of loading in such vessels will be issued only after confirmation by the concerned Port Authorities regarding anchoring/berthing of the ship for loading of Non-basmati rice prior to the Notification; iii. Where Non-basmati rice consignment has been handed over to the Customs before this Notification and is registered in their system / where Non-basmati rice consignment has entered the Customs Station for exportation before this Notification and is registered in the electronic systems of the concerned Custodian of the Customs Station with verifiable evidence of date and time stamping of these commodities having entered the Customs Station prior to 20.07.2023. The period of export shall be upto 31.08.2023.
iv. Export will be allowed on the basis of permission granted Page 9 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined by the Government of India to other countries to meet their food security needs and based on the request of their Government.
3. Export of Organic Non-basmati rice will be governed in accordance with Notification No.03/2015-2020 dated 19th April, 2017 read with Notification No.45/2015-2020 dated 29th November, 2022.
4. Effect of this Notification:
Export Policy of Non-basmati white rice (Semi-milled or wholly milled rice, whether or not polished or glazed: Other) under HS Code 1006 30 90 is amended from "Free" to "Prohibited".
Sd/-
(Santosh Kumar Sarangi) Director General of Foreign Trade Ex-Officio Additional Secretary, Government of India Email: [email protected] (Issued from F. No.01/91/171/010/AM23EC/e-33294)"
[14] On perusal of the aforesaid Notification, it appears that ITC HS Codes 1006 30 90, which pertains to Non-Basmati White Rice (Semi-milled or wholly milled rice, whether or not polished or glazed: other) was free commodity prior to issuance of the Notification as per the Export Policy and the Central Government, in exercise of powers conferred by Section 3 read with Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, as amended read with Para 1.02 and 2.01 of the Foreign Trade Policy, 2023, amended the Export Policy and notified the said ITC HS Page 10 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined Code from "free" to "prohibited" category with effect from 21:57:01 hours on 20th July 2023. The said Notification, however, provides for export of the Non-Basmati White Rice on various situations, as numerated in paras (i) to (iv) of para - 2 of the said Notification. [15] Admittedly, the case of the petitioner does not fall in any of the above sub-paragraphs (i) to (iv) of para - 2 of the said Notification, meaning thereby, neither the loading of Non-Basmati White Rice on the ships commenced before the said Notification nor the ships already berthed or arrived at for the shipping bills filed by the petitioner nor the petitioner had handed over the consignments to the Customs before the said Notification nor any permission was granted by the Government of India to the other countries to meet their food security needs in the facts of the case. The aforesaid Notification No.20/2023 dated 20 th July 2023 was further explained by the Trade Notice No.23/2023 dated 18 th August 2023, whereby the DGFT, on receipt of the representations made from the Stakeholders including Customs Authorities clarified with regard to conditions (i), (ii), and (iii) of para - 2 of the said Notification as to whether all the three conditions are independent Page 11 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined of each other or exporter has to fulfill all the conditions together and for that, the clarification was issued that all the three conditions are independent of each other and export is allowed in case of completion of any one of the conditions of para - 2 of the said Notification by the exporter. However, in the facts of the case, none of the conditions is fulfilled by the petitioner, and therefore, even the Notification No.23/2023 would not be applicable to the facts of the case.
[16] The Hon'ble Delhi High Court, in the case of VI Exports India Private Limited (supra), dealt with the similar issue as to the issuance of writ of mandamus to the respondent for permitting the petitioner to export the Non-Basmati White Rice under the said Notification No.20/2023 dated 20th July 2023. The Hon'ble Delhi High Court, after considering such issue in details and after considering the decision of the Hon'ble Andhra High Court as well as the decision of this Court, dismissed the writ petition as under:
"16. A perusal of the Notification bearing No.20/2023 dated 20.07.2023 and the subsequent amendment to the said Notification vide Notification No.29/2023 dated 29.08.2023 indicates that there are five conditions which are to be fulfilled to get exemption for exporting "Non-basmati white rice (semi-milled Page 12 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined or wholly milled rice, whether or not polished or glazed: other)"
which has been prohibited by the Government by the issuing the said Notifications. The Government by the said Notifications decided to prohibit completely the export of Non-basmati rice primarily in view of the rising price of the same in the market as huge quantity of rice was being exported from the country which had led to scarcity of non-basmati rice in the country and a consequent increase in prices for the same.
17. Notification No.20/2023 dated 20.07.2023 states that the decision of ban on export of Non-basmati rice will come into immediate effect. However, the said Notification has allowed the export of consignments of Non-basmati rice subject to the conditions as mentioned in the Notification. The first paragraph of the said Notification states that "where loading of Non-basmati rice on the ship has commenced before this Notification". This condition has not been satisfied by the Petitioner for the reason that the ship had not berthed in Kandla Port before the issuance of Notification. The second paragraph under which consignment could be permitted to be exported consists of several conditions which are " (i) where the shipping bill is filed; (ii) vessels have already berthed or arrived; (iii) anchored in Indian ports and their rotation number has been allocated before this Notification; (iv) approval of loading in such vessels has been issued after confirmation by the concerned Port Authorities regarding anchoring/berthing of the ship for loading of non-basmati rice prior to the Notification". The Petitioner had filed the shipping bills and had received the vessel call number (VCN) and the customs rotation number but the vessel had not berthed or arrived and anchored in Indian port, and therefore, this condition has also not been satisfied by the Petitioner. The third paragraph states that "where Non-basmati rice consignment has been handed over to the Customs before this Notification and is registered in their system / where Non-basmati rice consignment has entered the Customs Station for exportation before this Notification and is registered in the electronic systems of the concerned Custodian of the Customs Station with verifiable evidence of date and time stamping of these commodities having entered the Customs Station prior to 20.07.2023. The period of export shall be upto 31.08.2023". The third paragraph was amended by the notification dated 29.08.2023. The said amendment specified the time limit on 20.07.2023 by which time the non-basmati rice had Page 13 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined to be handed over to the customs stations and registered in the system. The said paragraph also provides that even if the non- basmati rice consignment had not been handed over to the customs station but had entered the customs station for exportation and registered with the system of the concerned Custodian of the customs station with verified date and time of stamping had been entered into the customs station prior to 21:57:01 hours on 20.07.2023, the consignment was exempted from the notification and could be exported if export duty has been paid. One more exemption was added under which if export duty had been paid before 21:57:01 hours on 20.07.2023, then the exporter could export the non-basmati rice. The last paragraph is not applicable in the present case because no permission has been granted by the Government of India for export to the country to which rice was to be exported to meet its food security needs.
18. A perusal of the third paragraph after amendment indicates that either the consignment of non-basmati rice should have been handed over to the Customs before 21:57:01 hours on 20.07.2023 and the consignment of Non-basmati rice handed over to the customs has been registered in Customs system OR the non- basmati rice consignment has been entered the Customs Station for exportation before 21:57:01 hours on 20.07.2023 and is registered in the electronic systems of the concerned Custodian of the Customs Station with verifiable evidence of date and time stamping of these commodities having entered the Customs Station prior to 21:57:01 hours on 20.07.2023. A perusal of the facts of the present case does not indicate that the consignment of Non-basmati rice for remaining 11,000 MT rice was handed over to the customs before 21:57:01 hours on 20.07.2023 and was registered in Customs system or the Non-basmati rice consignment had entered the Customs Station for exportation before the appointed time and has been registered in the electronic systems of the concerned Custodian of the Customs Station with verifiable evidence of date and time stamping of these commodities having entered the Customs Station prior to 21:57:01 hours on 20.07.2023. Admittedly out of 28,000 MT of rice only about 11,000 MT of rice could be stored in the warehouse of the port due to space crunch. Paragraph (iii)(i) of the amended notification dated 29.08.2023 was not fulfilled.
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19. Further, the Petitioner had paid the export duty only for 17,000 MT. The Petitioner, thus, has been permitted to export the same and the remaining 11,000 MT of rice for which export duty was not paid were not allowed to be exported.
20. The Government is in the best position to decide what is best for the interest of the national economy and Courts cannot dictate or sit in appeal as to how policies are to be framed. Policy making is exclusively within the province of the Government and such matters do not ordinarily attract the power of judicial review. The Government in its wisdom and taking into account the relevant factors has come out with a decision to ban export of Non-basmati rice in the country. The Government has also with its wisdom has carved out certain exemptions.
21. The Notification bearing No.20/2023 dated 20.07.2023 and the subsequent amendment to the said Notification vide Notification No.29/2023 dated 29.08.2023 issued by the Government are not under challenge in the instant writ petition. What the Petitioner is actually seeking is a writ of mandamus to compel the Government to breach its own Notification for which a writ of mandamus cannot lie. It is well settled that a writ of mandamus cannot lie to compel the State to act contrary to law. No mandamus can be issued directing the Government not to enforce its own Notification unless and until it is violative of Article 14 of the Constitution of India.
22. The Apex Court in State of West Bengal vs. Subhas Kumar Chatterjee, (2010) 11 SCC 694 has categorically held that no mandamus lies for issuing directions to a Government to refrain from enforcing a provision of law and no court can issue mandamus directing the authorities to act in contravention of the rules as it would amount to compelling the authorities to violate law and such directions may result in destruction of rule of law.
23. It is also well settled that exemptions in Notifications have to be construed strictly. [Refer: Commr. of Customs (Imports) v. Tullow India Operations Ltd., (2005) 13 SCC 789, A.P. Steel Re- Rolling Mill Ltd. v. State of Kerala, (2007) 2 SCC 725, Collector of Customs (Preventive) v. Malwa Industries Ltd., (2009) 12 SCC 735 and CCE v. Parle Exports (P) Ltd., (1989) 1 SCC 345)] Page 15 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined
24. The Apex Court in CCE v. Hari Chand Shri Gopal, (2011) 1 SCC 236 has held as under:
"Exemption clause -- Strict construction
29. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the noncompliance of which would not affect the essence or substance of the notification granting exemption.
30. In Novopan India Ltd. [1994 Supp (3) SCC 606] this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. CCE and Customs [AIR 1970 SC 755 :
(1969) 2 SCR 253] held that (Novopan India Ltd. case [1994 Supp (3) SCC 606] , SCC p. 614, para 16) "16. ... such a notification has to be interpreted in the light of the words employed by it and not on any other basis.
This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification i.e. by the plain terms of the exemption."
31. Of course, some of the provisions of an exemption notification may be directory in nature and some are mandatory in nature. A distinction between the provisions Page 16 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined of a statute which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in their nature, on the other, must be kept clearly distinguished. In TISCOLtd. [(2005) 4 SCC 272] this Court held that the principles as regard construction of an exemption notification are no longer res integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning wherefor the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed literally. An eligibility criteria, therefore, deserves a strict construction, although construction of a condition thereof may be given a liberal meaning if the same is directory in nature.
32. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably be expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the "essence" or the "substance" of the requirements. Like the concept of "reasonableness", the acceptance or otherwise of a plea of "substantial compliance" depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means "actual compliance in respect to the substance essential to every reasonable objective of the statute" and the Court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed.
33. A fiscal statute generally seeks to preserve the need to Page 17 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance with an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted.
34. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the "substance" or "essence" of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the "essence" of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance with those factors which are considered as essential."
25. The Petitioner has not been able to fulfil any of the condition under which it could have exported the rice in its entirety. The ship had not berthed before 20.07.2023. Loading had not started before 20.07.2023. 11,000 MT of rice which is sought to be exported had not entered the customs station for exportation before the issuance of Notification. The Petitioner has not filed any verifiable evidence of date and time of stamping of these 11,000 MT of rice having entered the Customs station prior to Page 18 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024 NEUTRAL CITATION C/SCA/19031/2023 ORDER DATED: 16/02/2024 undefined 20.07.2023. The Petitioner only has valid shipping bills, vessel call number (VCN) and the customs rotation number. Though the Petitioner states that but for the Notification they would have been able to pay the export duty for the remaining of 11,000 MT of rice and that this circumstance cannot be taken against Petitioner because the Petitioner has already paid the export duty for 17,000 MT of rice and therefore, nothing prevented the Petitioner to pay the balance of export duty for 11,000 MT of rice as well, before the said notification No.20/2023 came into force, and this argument cannot be accepted because directing the Respondent to relax the condition in this case would amount to forcing the Government to breach its own Notification which this Court cannot to do so by way of the present writ petition.
26. The doctrine of substantial compliance and intended use would not come in aid of the Petitioner because the purport of the Notification is to immediately put a ban on the export of Non- basmati rice, and therefore, the argument raised by the Petitioner that the Petitioner has substantially complied with the Notification and it has shipping bills, vessel call number (VCN) and the customs rotation number which shows the intention of the Petitioner to export rice would not come to its aid. The purpose of the Notification was to immediately put ban on the export of Non- basmati rice in order to meet the internal needs of the country in future. In this light, this Court is not inclined to invoke the principle of substantial compliance and intended use in the facts of the present case.
27. A perusal of the Judgment dated 12.10.2022 passed by the High Court of Andhra Pradesh at Amaravathi in W.P.(C) Nos. 32049/2022, 33016/2022, 33156/2022, shows that it does not contain any reason as to why the consignment were allowed to be exported. There is no discussion regarding the purpose for which the notification was brought issued. The judgment primarily flows out of the concession given by the Government Advocate. This Court is, therefore, not in a position to follow the judgment passed by the High Court of Andhra Pradesh. With regard to the judgment dated 27.09.2023, passed by the High Court of Gujarat at Ahmedabad in Special Civil Application No.16017/2023, titled as M/s Maya Agri Impex Pvt. Ltd. v. Union of India, the facts of that case and the present case are entirely different. In that case, the ship, instead of reaching Kandla port reached Bhavnagar port.
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There is nothing on record to show that as to whether the export duty in that case had been fully paid or not and, therefore, the said judgment also cannot be relied upon in the present case."
[17] We are in complete agreement with the reasons assigned by the Hon'ble Delhi High Court, and therefore, in order to avoid duplication, the same are not reiterated.
[18] As the facts of the present case are similar, for the same reasons, this petition petition is not entertained and is accordingly dismissed. Notice is discharged. No order as to cost.
(BHARGAV D. KARIA, J) (NIRAL R. MEHTA,J) CHANDRESH Page 20 of 20 Downloaded on : Fri Mar 01 21:26:57 IST 2024