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1. The petitioners in both the writ petitions are engaged in the activities of import and export. For the purpose of carrying out the activities of import and export, it is required to have IE Code No.(Import and Export Code No.). The petitioner in CWP No.4938/2001 applied for and was granted IE Code No.0598054685. The petitioner in CWP No.4945/2001 was, likewise, given IE Code No.0593065336.

2. In these writ petitions, the petitioners are challenging Advice memo dated 23rd March, 2001 issued by the office of the Joint Director General of Foreign Trade. This Advice memo is issued in respect of four firms including both the petitioners as well and reads as under:

8. The short question, in these circumstances, which arises for consideration is as to whether it was incumbent upon the respondents to issue show cause notice and give opportunity of being heard before issuing such Advice Memo.

9. Before answering this question, it would be necessary to notice the nature and effect of this Advice Memo. For this purpose, one may have to look into relevant provisions of Export and Import Policy as well as Foreign Trade (Development & Reglation) Act, 1992 and Imports and Exports (Control) Act, 1947. The Parliament has enacted a Foreign Trade (Development & Regulation) Act, 1992 (for short' the Act') for the development and regulation of foreign trade by facilitating imports into, and augmenting exports from, India and for matters connected therewith or incidental thereto. Section 3 of the Act empowers the Central Government to make provisions relating to imports, exports and for this purpose it may make orders and announce export and import policy. EXIM Policy 1997-2002 has been announced by the Central Government in exercise of powers contained in Section 3 of the Act. Section 7 of the Act stipulates that no person shall make any import of export under IE Code No. granted by the DGFT or the officer authorised by the DGFT in this behalf. Section 8 deals with suspension and cancellation of IE Code No. and Section 9 lays down the provision for issuing, suspension and cancellation of licenses. Relevant for our purpose, is Section 9 which is in the following terms:

11. Para 4.9 of this Policy provides that no export or import shall be made by any person without an Importer-Exporter Code unless specifically exempted.

12. In exercise of powers conferred by Section 19 of the Act, the Central Government has framed Foreign Trade (Regulations) Rules 1993 (for short`the Rules'). These Rules state in detail the procedure for grant of license. Relevant Rule would be Rule 7 and a portion thereof which is required for our purpose is extracted below:

"7. Refusal of license-
(a) Before a person can undertake import of export, he is to obtain IE Code Number.
(b) Likewise he is to get import license as prescribed under Section 9 of the Act.
(c) Grant of such a license is not a right as stipulated para 4.7 of the EXIM Policy 1997-2002 and the DGFT is given power to refuse to grant or renew a license but in accordance with the provisions of the Act and the Rules.
(d) Since a person cannot import/export without such a license and the conduct of business in import and export depends thereon, the DGFT or the licensing authority can reject the application for issue or renewal of license. But this refusal cannot be in an arbitrary manner. That is why sub-section (2) of Section 9 provides that if the licensing authority or the Director General has to refuse grant or renewal of license, it has to record in writing his reasons for such refusal. Further in order to ensure that power is exercised objectively, Rule 7 of the Rules stipulates the circumstances under which license can be refused.