CWP No. 5344 of 2007 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 5344 of 2007 Date of decision: May 20, 2009 Escorts Limited, 15/5 Mathura Road, Faridabad ..... PETITIONER VERSUS Union of India through the Secretary, Ministry of Commerce & Industry, Department of Commerce, New Delhi and another ..... RESPONDENTS CORAM: HON'BLE MR. JUSTICE M.M.KUMAR HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present: Mr. Animesh Sharma, Advocate, for Mr. Akshay Bhan, Advocate, for the petitioner. Mr. Kamal Sehgal, Advocate, for the respondents. *** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the digest? AUGUSTINE GEORGE MASIH, J. In the present writ petition, the challenge is to the notification dated 12.06.2006 issued by the Directorate General of Foreign Trade and Ex Officio Additional Secretary to the Government of India, New Delhi CWP No. 5344 of 2007 2 (Annexure P-6) on the ground that the said notification has been issued without authority of law in so far as retrospective effect has been given to the amendment made in the Target Plus Scheme (Annexure P-2) notified under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as 'the Act, 1992'). A prayer has been made for issuance of a writ in the nature of mandamus declaring the notification dated 12.06.2006 (Annexure P-6) ultravires the Act, 1992 and the Constitution of India as the same is unreasonable and arbitrary being violative of Articles 14 and 19 (1)(g) of the Constitution of India in so far as the benefit has been withdrawn with retrospective effect. The petitioner is engaged in the business of manufacturing and sale of various items including agricultural machinery (Tractors) etc. It is engaged in the sale of these goods on export basis to places outside the country. In view of the exports made by the petitioner Company and in recognition thereof, Certificate of Recognition as Trading House by the office of Joint Director General, Foreign Trade, has been granted. To accelerate the growth in export, various schemes are notified by the Ministry of Commerce and Industry, Government of India with an intention to earn foreign exchange in the country and also to globalized the Indian manufactured products. Keeping this principle in mind, the scheme was launched by the Ministry of Commerce in the year 2004 under the Foreign Trade Policy for the year 2004-2009, which included the Target Plus Scheme, copy whereof has been appended as Annexure P-2 to the writ petition. The scheme was floated with the intention to accelerate the growth in export by rewarding Star Export Houses, who have achieved a quantum growth in exports in the current licensing year in comparison to the previous licensing year. The entitlement for a duty credit of a CWP No. 5344 of 2007 3 performing Star Export House was to be based on incremental export. Under the Scheme, if a Star Export House achieved a certain percentage of incremental growth in its export in comparison to the previous licensing year, duty credit entitlement was to be granted as given in clause 3.7.3 notified under the Scheme. Clause 3.7.3 reads as under:- “3.7.3. The entitlement under this scheme would be contingent on the percentage incremental growth in FOD value of exports in the current licensing year over the previous licensing year, as under: Percentage Incremental Duty Credit Entitlement Growth (as a % of the incremental growth) 20% and above but 5% below 25% 25% or above but 10% below 100% 100% and above 15% (of 100%)” The Ministry of Commerce and Industry, Government of India, vide its notification dated 31.03.2006 (Annexure P-5) in exercise of its powers conferred under Section 5 of the Act, 1992 read with paragraph 1.3 of the Foreign Trade Policy, 2004-2009, as amended, abolished the Target Plus Scheme for exports from 1.4.2006 onwards. Vide this notification, sub-paras 3.7.1 to 3.7.8 in para 3.7 were also deleted w.e.f. 1.4.2006. The effect of the said notification was that Target Plus Scheme stood abolished with prospective effect i.e. from 1.4.2006 onwards. The petitioner has submitted that it does not have any CWP No. 5344 of 2007 4 grouse with regard to the said notification dated 31.03.2006 as it is conceded that the Government is empowered to notify any Scheme or to withdraw the same at any stage unless the same is governed by principle of promissory estoppel and it is within the power of the Government to do so. The petitioner had accepted the said decision of the Government with regard to the withdrawal of the Target Plus Scheme and had accordingly, made arrangement to manage its affairs according to the new Policy. A notification dated 12.06.2006 was issued by the Ministry of Commerce and Industry, Department of Commerce, according to which, the Central Government made the following amendments in the Target Plus Scheme for exports effected during 1.4.2005 to 31.03.2006 of the Foreign Trade Policy (Re-2005), 2004-2009, as amended:- “1. The first sentence of the Para 3.7.3 is replaced as under: “The entitlement under this scheme would be contingent on the minimum percentage incremental growth of 20% in FOB value of exports in the current licensing year over the previous licensing year, and the rate of entitlement shall be 5% of the incremental growth.” 2. Consequently, the table below the first sentence stands deleted. This will take effect for exports from 01.04.2005. This issues in Public interest.” It is this notification, which is under challenge in the present writ petition on the ground that as per the provisions of Section 5 of the Act, 1992, the Central Government has been empowered to formulate and announce export and import policy and also to amend the policy in the like CWP No. 5344 of 2007 5 manner. The Central Government can formulate the policy and amend the same with prospective effect as the same would not be violative of the principle of doctrine of promissory estoppel. A notification could not be issued withdrawing any benefit with retrospective effect as the same is not within the power of the Central Government as the principle of doctrine of promissory estoppel would come into play. On the basis of the promise in the form of Target Plus Scheme having been floated by the Central Government, the petitioner Company believing the same and accepting to achieve a particular percentage of exports vis-a-vis exports for the earlier year, calculated its costing considering the fact that it will have to pay lesser amount of duty on custom in the light of the said policy. Having achieved the percentage incremental growth, a right which has accrued to the petitioner Company could not be taken away with retrospective effect. It has been submitted that the notification dated 12.06.2006 cannot be sustained as the same is ultravires the Section 5 of the Act, 1992. When notice of motion was issued in the present case, counsel for the petitioner had relied upon a judgment of the Gujarat High Court in the case of Welspun India Ltd. v. Union of India, rendered in Special Civil Application No. 19753 of 2006 decided on 30.11.2006, wherein the notification dated 12.06.2006 issued by the Ministry of Commerce and Industry, Department of Commerce (Annexure P-6) has been set aside to the extent of its retrospectively. Counsel appearing on behalf of the respondents, had submitted that against the judgment of the Gujarat High Court, reliance whereon has been made by the petitioners, stands challenged in Hon'ble the Supreme Court and transfer applications in all matters of various High Courts, where similar writ petitions have been preferred, have been filed in Hon'ble the Supreme Court. On this basis, he CWP No. 5344 of 2007 6 had sought an adjournment. Time after time, counsel for the respondents had sought time to inform the Court with respect to the filing of the transfer application with regard to the present writ petition before Hon'ble the Supreme Court. No specific information was forth coming as to whether the said application has either been filed or has been listed or not. On 18.03.2009, one last opportunity was granted to the counsel for the respondents to move an application for transfer of the present writ petition before Hon'ble the Supreme Court as more than one year had passed since the request for adjournment was sought by the counsel for the respondents. Today also, counsel for the respondents is unable to inform the Court as to whether such an application for transfer has been preferred by the respondents before Hon'ble the Supreme Court or not. It would not be out of way to mention here that no reply to the writ petition has been preferred by the respondents despite of passing of more than one year. We have heard the counsel for the parties and have gone through the records of the case as well as the judgment of the Gujarat High Court in the case of Welspun India Ltd. v. Union of India (supra), relied upon by the counsel for the petitioner, counsel for the respondents could not point out anything to submit that the present case is not covered by the said judgment. We are also of the opinion that the present case indeed is covered by the above decision of the Gujarat High Court. It has not been disputed by the counsel for the respondents that the notification dated 12.06.2006 issued by the Director General of Foreign Trade and Ex-Officio Additional Secretary to the Government of India, Ministry of Commerce and Industry, Department of Commerce was under challenge on same grounds as have been pressed into service by CWP No. 5344 of 2007 7 the petitioner Company in the present writ petition. He is unable to rebut the reasoning given by the Gujarat High Court while holding notification dated 12.06.2006 (Annexure P-6) as ultravires of the Act, 1992 so far as it gives retrospective effect. We are also in full agreement with the judgment passed by the High Court of Gujarat in the case of Welspun India Ltd. v. Union of India, rendered in Special Civil Application No. 19753 of 2006 decided on 30.11.2006. Adopting the same reasoning, we allow the present writ petition and quash the notification No. 08(RE-2006)/2004-2009 dated 12.06.2006 issued by the Director General of Foreign Trade and Ex-Officio Additional Secretary to the Government of India, Ministry of Commerce and Industry, Department of Commerce (Annexure P-6) and declare it ultravires the Act, 1992 so far as it gives retrospective effect and the petitioners are held entitled to get duty credit entitlement certificate, if entitled to otherwise. ( M.M.KUMAR ) (AUGUSTINE GEORGE MASIH ) JUDGE JUDGE May 20, 2009 pj