Calcutta High Court
Lgw Industries Limited vs Union Of India & Ors on 28 January, 2016
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
OD-13
WP 1355 of 2015
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
LGW INDUSTRIES LIMITED
Versus
UNION OF INDIA & ORS.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
Date : 28th January, 2016.
Appearance:
Mr.Abhrajit Mitra, Sr.Adv.
Mr.Aryak Dutta, Adv.
Mr.Dipankar Das, Adv.
..for the petitioner
Ms.Debjani Roy, Adv.
..for the respondents.
The Court: The petitioner complains of the ex post facto alteration of the material terms of an incentive scheme that has seriously prejudiced the petitioner since the petitioner had organised and planned its export business on the basis of the incentive scheme declared by the Central Government on December 28, 2012. 2
Under the Incremental Exports Incentivisation Scheme, exporters were to be given a duty credit scrip at the rate of 2 per cent on the incremental growth achieved in exports in fourth quarter of 2012-13 over the fourth quarter of 2011-12. The exact words of the substantive part of the scheme are set out:
"An IEC holder would be entitled for a duty credit scrip @ 2% on the incremental growth (achieved by the IEC holder) during the period 01.01.2013 to 31.3.2013 compared to the period from 01.01.2012 to 31.3.2012 on the FOB value of exports. Incremental growth shall be in respect of each exporter (IEC holder) without any scope for combining the exports for Group Company."
The petitioner exported raw cotton in both the financial years and reported a phenomenal growth of more that 2000 per cent during the relevant period in the fourth quarter of 2012-13. Upon the petitioner applying for the duty credit scrip of value in excess of Rs.1 crore, the petitioner's claim was rejected apparently on the ground that by a subsequent notification of September 25, 2013 the following two clauses were inserted in the relevant scheme:
"(i) Benefit of Incremental Export Incentivisation Scheme for the last quarter of 2012-13 will be limited to 25% growth or incremental growth on Rs.10 crores in value, whichever is less.
"(ii) Claims in excess of this value will be subjected to greater scrutiny by Regional Authority."
The petitioner claims that apart from the fact that it is unreasonable and arbitrary on the part of the Union to 3 announce an incentive and attempt to take it away ex post facto, the Central Government has no authority under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 to alter a disclosed policy with retrospective effect.
The petitioner says that prior to the notification of September 25, 2013 being published, the petitioner had made the application for the incentive. The petitioner's application could not have been considered on the basis of the subsequent notification. The petitioner says that it is unnecessary for the present purpose to challenge the notification on several other grounds which are available.
The petitioner refers to a yet unreported judgment of the Delhi High Court rendered on September 28, 2015 in WP(C) 1345 of 2015 (Sesa Sterlite Limited v. Union of India) where a similar view has been taken that the subsequent notification cannot affect the rights that had vested in any exporter prior to the subsequent notification coming into effect.
On a previous petition of this petitioner, an order was passed on May 6, 2015 with the observation that retrospective effect could not be given to the administrative order of September 23, 2013. However, such order on WP No.450 of 2015 permitted the second respondent 4 to the earlier petition to decide the petitioner's application in accordance with law without being influenced by any observation in the order.
The second respondent has considered the matter and by the order impugned dated October 1, 2015 has declined the incentive to the extent due under the original notification of December 28, 2012. The concerned authority has found that the petitioner is entitled to the maximum of about Rs.99,000/- under the incentive scheme in view of the subsequent notification of September 23, 2013.
In the light of the discussion above and particularly since the authority under Section 5 of the said Act does not permit a benefit already vested to be withdrawn from the hands of the beneficiary, WP No.1355 of 2015 is allowed by setting aside the order impugned dated October 1,2015 and by requesting the second respondent to reconsider the matter and pay the rightful dues of the petitioner under the incentive scheme in accordance with the notification of December 28, 2012 but without taking into account the first clause of the subsequent notification of September 25, 2013 to the extent that such clause detracts from the quantum of the incentive that an exporter is entitled to under the original notification. Appropriate steps should be taken by second respondent to ensure that the rightful dues of the 5 petitioner are made available to the petitioner within six weeks from date. It will also be open to the petitioner to seek appropriate interest for the period of delay.
There will be no order as to costs.
Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SANJIB BANERJEE, J.) dg2