1. By this petition filed under Article 226 of the Constitution of India, the petitioner is challenging the legality of the order dated October 19, 1978 passed by the Joint Chief Controller of Imports and Exports in exercise of the appellate jurisdiction, and the order passed by the Chief Controller of Imports and Exports in revisional jurisdiction and communicated to the petitioner by letter dated March 30, 1979.
2. The petitioner is carrying on business in the firm name and style of M/s. Hassanand Hemandas & Co., and the firm is an 'established importer' and carries on business as wholesalers and retailers in arms and ammunition. The Import Trade Control Policy for the period April 1977 to March 1978 was announced by the Union of India and it provides for policy for, 'established importers.' The detailed import policy for established importers is given in Section IV of the Import Trade Control Policy Rules. It inter alia provides that the quota licence is given to an established importer as a percentage of the value of his past imports, as appearing in the quota certificate in accordance with the import policy in force. Item 93.01/07 is about 'arms and ammunitions; parts thereof', and sets out that for arms and ammunition 5% would be the quota percentage. In other words, an established importer of arms and ammunition is entitled to a quota licence of the value computed at 5% of the sum mentioned in the quota certificate held by such established importer. The petitioner firm holds the quota licence certificate bearing No. 114921, dated January 17, 1957 for the sum of Rs. 3,64,393 in respect of cartridge cases filled and empty. The firm also holds a quota certificate licence bearing No. 888149, dated December 21, 1964 for the sum of Rs. 1,93,454 in respect of arms and ammunition. On the basis of the quota certificate, the firm was entitled to a quota licence of the value of Rs. 18,129 and Rs. 9,672 respectively.
3. As required by the Policy Book, the petitioner's firm applied on September 5, 1977 for quota licence based on the entitlement for the quota licence in respect of both the certificates. The Joint Chief Controller of Imports and Exports by order dated March 6, 1978 granted the licence, but after deducting the amount of 25% from the entitlement of the firm in respect of both the certificates. The firm carried an appeal before the Joint Chief Controller of Imports and Exports in respect of both the certificates and the appeals were dismissed by an order dated October 19, 1978. The only ground given for rejection of the appeal was that there is no provision for established imports in the AM-79. Policy Book and reliance was placed on para 199 of Policy Book of AM-79. The revisional authority has confirmed the order by giving an additional reason that arms and ammunition is canalised through S.T.C. vide S. No. 42 of Appendix 8 to the April/March 1979 Import Policy Book.
4. Shri Mehta, learned counsel, appearing in support of the petition submitted that the decision of the Appellate Authority and the revisional authority is entirely erroneous and the reliance upon paragraph 199 of Policy Book AM-79 which reads as under, was entirely erroneous.
'There is no provision in the new policy for established importers. Hence, such application for erstwhile quota licences, lying undisposed as on 1st April 1978 will stand automatically rejected. In such case, also, the applicants will not be eligible to the refund of the fees paid.'
The mere perusal of this paragraph makes it clear that the application for erstwhile quota licence will automatically stand rejected provided the licensing authority has not passed any order on such applications till April 1, 1978. In the present case, the licensing authority granted the licence on March 6, 1978, but with 25% cut. Paragraph 199 of Policy Book AM-79 has no application whatsoever to the facts of the case as the licences were in fact granted prior to April 1, 1978. In my judgment, the reliance by the appellate authority and the revisional authority on this paragraph to deprive the petitioner of the advantage of entitlement under the Policy Book of 1977-78 is entirely erroneous and cannot be sustained.
5. Shri Desai, learned counsel appearing on behalf of the Department, submitted that the Revisional authority has found that item of arms and ammunition is canalised through S.T.C. in the Import Policy Book of April 1979 and therefore it will not be possible to grant relief to the petitioner. In my judgment, the reason given by the revisional authority is not correct. The mere fact that the item is canalised is no ground to deprive the petitioner of the licence by reduction of 25% of the entitlement. The petitioner would be entitled to get the licence as per the Import Policy of 1977-78 to the full extent and without deduction of 25% of the entitlement. In case the item is banned in accordance with the policy in existence at the relevant time, then naturally the petitioner would not be entitled to import the banned item, but the mere fact that the item is canalised would not deprive the petitioner from claiming the advantage of the entitlement under the policy of 1977-78. In my judgment, the petitioner is entitled to the relief sought in the petition.
6. Accordingly, the petition succeeds and the rule is made absolute and the respondents are directed to issue licence to the petitioner in accordance with the Import Policy of 1977-78 without deducting 25% of the entitlement. In the circumstances of the case, there will be no order as to costs.