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Union of India and ors. Vs. Alok Exports Etc. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtMumbai High Court
Decided On
Case NumberAppeal Nos. 338 and 339 of 1979
Judge
Reported inAIR1980Bom280; 1989(24)LC677(Bombay)
ActsConstitution of India - Article 226; Imports and Exports Control Act, 1947 - Sections 3; Exports (Control) Order, 1977; General Clauses Act, 1897 - Sections 6; Exports (Control) Amendment Order, 1979; Indian Partnership Act, 1932; Defence of India Rules, 1939 - Rule 84; Emergency Provisions Continuance Ordinance, 1946; Import Control Order, 1955; Exports (Control) Order, 1968; Drugs and Cosmetics Act, 1940; Indian Tariff Act, 1934; Sales Tax Act; Orissa Sales Tax Act, 1947 - Sections 5(1) and 8; Madras Hindu Religious and Charitable Endowments Act, 1951 - Sections 64(4); Taxation Laws
AppellantUnion of India and ors.
RespondentAlok Exports Etc.
Appellant AdvocateD.R. Dhanuka,;V.N. Lokur,;R.L. Mukerjee and;M.I. Sethna, Advs.
Respondent AdvocateA.P. Rana,;M.O. Chinoy,;J.C. Bhatt,;V.J. Taraporwala,;T.R. Andhyarujina and;D.R. Podar, Advs.
Excerpt:
customs - trade - article 226 of constitution of india, section 3 of imports and exports control act, 1947, exports control order 1977, section 6 of general clauses act, 1897, exports (control) amendment order, 1979, indian partnership act, 1932, rule 84 of defence of india rules, 1939, emergency provisions continuous ordinance, 1946, import control order, 1955, exports (control) order, 1968, drugs and cosmetic act, 1940, indian tariff act, 1934, sales tax act, sections 5 (1) and 8 of orissa sales act, 1947, section 64 (4) of madras hindu religious and charitable endowments act, 1951 and taxation laws - whether argenti nitrus or silver nitrate b.p. for purpose of export control covered by words 'silver salts, silver chemicals and compounds with more than 50 per cent silver contents' -.....kania, j.1. these two appeals are directed against the judgments delivered by pendse, j. in misc. petn. no. 1479 of 1979 (1980 cen. cus. 32-d) and misc. petn. no. 1114 of 1979 respectively. appeal no. 338 of 10979 arises from the judgment in misc. petn. no. 1479 of 1979 and appeal no. 339 of 1979 arises from the judgment in misc. petn. no. 1114 of 1979. both the appeals raise common questions of law and the difference in the facts is not material from the point of view of the questions involved for decision. we, therefore, propose to dispose of both these appeals by this common judgment.2. as the main judgment has been delivered by pendse, j. in misc. petn. no. 1114 of 1979, it will be more convenient to first deal with the facts in appeal no. 339 of 1979. the respondents herein, who were.....
Judgment:

Kania, J.

1. These two appeals are directed against the judgments delivered by Pendse, J. in Misc. Petn. No. 1479 of 1979 (1980 Cen. Cus. 32-D) and Misc. Petn. No. 1114 of 1979 respectively. Appeal No. 338 of 10979 arises from the judgment in Misc. Petn. No. 1479 of 1979 and Appeal No. 339 of 1979 arises from the judgment in Misc. Petn. No. 1114 of 1979. Both the appeals raise common questions of law and the difference in the facts is not material from the point of view of the questions involved for decision. We, therefore, propose to dispose of both these appeals by this common judgment.

2. As the main judgment has been delivered by Pendse, J. in Misc. Petn. No. 1114 of 1979, it will be more convenient to first deal with the facts in Appeal No. 339 of 1979. The respondents herein, who were the petitioners in the said petition, are a partnership firm registered under the Indian PartnershipAct, 1932, and carry, on business as exporters of drugs and chemicals. They are registered with the Basic Chemicals and Pharmaceutical Export Promotion Council (hereinafter referred to as the said Council'). Appellant No, 1 is the Union of India and the other appellants are the officers appointed by appellant No. 1 and exercise their powers and functions under the Imports and Exports Control Act, 1947 (XVIII of 1947), (hereinafter referred to as 'the said Act'% On 23rd March 1979 a contract was entered into between the respondents and one Campaign Des Metaux Precious, Paris, a firm dealing in precious metals (hereinafter referred to as 'the said French firm') whereby the respondents Bold to the said French firm one metric ton of Argenti Nitrus of International Pharmaceutical specifications at 154.60 dollars per kg. C. I, F,, the total value being 154600.00 dollars. The delivery was to begin in April 1979 and to be completed by Mar. 1980, or as mutually settled. By another contract dated 28th March, 1979 the respondents agreed to sell to Pinstripe Limited, Manchester, 15 metric tons of Argenti Nitrus (Ag NO3) conforming with the specifications laid down in the latest British Pharmacopoeia Codex or International Pharmacopoeia at 161.00 dollars per kg. C. I. F. The delivery was to begin in April 1979 and to be completed by March 1980 or as mutually settled. There is a special condition in this contract which provides that parties are deemed to counter provisions to cover the contractual obligations and that any default in the execution of obligations under the contract in the present form would be construed to be a dispute which would entitle the aggrieved party to liquidated damages at 10% of the uncompleted contract without going into actual details of the losses or damages of the party concerned or the grounds thereof. The contract dated 23rd March 1979, was registered with Corporation Bank Limited on 26th March 1979 and the contract dated 28th March, 1979 was registered by the respondents with the Corporation Bank Limited on 30th March, 1979.

3. At this stage, some material facts in Appeal No. 338 of 1979, which arises from the decision in Miscellaneous Petition No. 1479 of 1979 may also be noted. On 29th March, 1979, the respondents in that appeal entered into a contract with Pinstripe Limited, Manchester, whereby the said respondents agreed to sell toPinstripe Limited, Manchester, 12 1/2 metric tons of Argenti Nitrus of the specifications contained in the latest British Pharmacopoeia Codex or International Pharmacopoeia at the rate of 161.00 dollars per kg, C. I. F, The delivery was to begin in April 1979 and to be completed by March 1980, or as mutually settled. There was a similar provision regarding liquidated damages as was contained in the contract dated 28th March. 1979, set out earlier. The said contract dated 29th March 1979, was registered with Joint Chief Controller of Imports and Exports, Bombay, on 30th March, 1979 and was also registered with the Corporation Bank Limited on the same date. It may be mentioned here that in respect of these contracts in both the appeal Letters of Credit were duly opened by the foreign buyers in favour of the respondents.

4. On 30th March, 1979, there was an amendment in Entry 77 of Part B of Schedule I of the Exports (Control) Order, 1977. In order to appreciate the effect of this amendment it is necessary to notice at this stage certain facts regarding the legal position prevailing on that date and earlier. The Imports and Exports Control Act, 1947, (i.e. the said Act) was enacted on 24th March, 1947, with the object of enabling the Central Government to exercise powers to prohibit, restrict or otherwise control the import and export which till that time had been controlled and governed by orders issued from time to time in exercise of the powers conferred by Rule 84 of the Defence of India Rules, 1939, as extended by the Emergency Provisions Continuance Ordinance (XX) of 194ft, Very briefly stated, Section 3 of the said Act provided that the Central Government may by order published in the Official Gazette make provisions for prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by of under the order the import of goods into India and export of goods from India. In exercise of the powers conferred by Section 3 of the said Act, the Central Government issued the Import Control Order, 1955, Sub-clause (1) of Clause 3 of the said Import Control Order provided that save as otherwise provided in the said Order, no person shall import any goods of the description specified in Schedule I, except under and in accordance with a licence or a customs clearance permit granted by the Central Government or by any officer specified in Schedule II. In exercise of the powers conferred by Section 3 of the said Act an Export Control Order was issued in 1957 by the Central Government, The said Export Control Order was repealed and replaced by the Exports (Control) Order, 1977, with which we are concerned in these matters. The said Exports (Control) Order 1977, (hereinafter referred to as 'the said Order'), has also been issued in exercise of the powers conferred by Section 3 of the said Act which we have already referred to above. Sub-clause (I) of Clause 3 of the said Order of 1977, provides that save as otherwise provided in the said Order, no person shall export any goods of the description specified in Schedule I, except under and in accordance with a licence granted by the Central Government or by an officer specified in Schedule II. Clause 15 of the said Order by Sub-clause (b) thereof provided that nothing in the said Order shall apply to any goods covered by executive instructions issued by the Chief Controller of Imports and Exports. Clause 16 of the said Order which deals with Repeal provides, inter alia, that anything done or any action taken under the Exports (Control) Order, 1968, including any appointment made or licence issued under any of the provisions of the said Order of 1968, or Notification, shall be deemed to have been done or taken under the corresponding provisions of the said Order of 1977. Part 'A' of Schedule I to the said Order of 1977, sets out the items the export of which is not normally allowed. These items are admittedly, although somewhat inaccurately, described as 'banned items' from the point of view of exports. Part 'B' of the said Schedule sets out the items the export of which is allowed on merits or subject to ceiling or other conditions to be specified from time to time. Prior to 22nd February 1979, item No. 77 of Part 'B' of the said Schedule ran as follows :

'(i) Silver bullion, silver sheets and plates which have not undergone any process of manufacture subsequent to rolling.

(ii) Silver salts, silver chemicals and compounds with more than 50 per cent Silver contents

(iii) Manufactures and products wholly or mainly of silver with more than 50 per cent silver contents'.

Item No. 78 of Part 'B' of the said Schedule related to Silver Coins. It appears that increasing restrictions were placed by the Central Government during the years 1979, on the export of silver items by deletion of different parts of item No. 77. On or about 20th February 1979 sub-item (i) of item 77 of Part 'B' of the said Schedule was deleted and the goods covered by the said sub-item were included in item 47 of Part 'A'. On 30th March, 1979, Sub-item (ii) of item 77 of Part 'B' was deleted and the goods covered by the said sub-item were included in a new item viz, item 55 of Part 'A' of the said Schedule. The deletion of Sub-item (ii) of item 77 Part 'B' of the said Schedule, with which we are directly concerned in these appeals, was effected by the Exports (Control) 22nd Amendment Order, 1979, dated 30th March, 1979, issued in exercise of the powers conferred by Section 3 of the said Act. On the same day, namely, 30th March, 1979, a Public Notice was issued by the Ministry of Commerce, Civil Supplies and Co-operation, Government of India, New Delhi The said Notice, inter alia, referred to the Exports (Control) Amendment Order of 1979 and announced that the provisions oi Paragraph 316 of the Hand Book of Import-Export Procedures, 1978-79, would not be applicable to any pre-ban commitments consequent to the said Public Notice and all such cases would be decided 'on merits'. At this stage, we may also take a brief note of some of the provisions of the Import Policy and the Export Policy during the relevant period. Chapter 18 of the Import Policy April 1978-March, 1979, issued by the Department of Commerce, Government of India, deals with the Registered Exporters, Paragraph 113 of the said Policy, which is the first paragraph contained in the said Chapter, shows that the object of the provisions of the said Chapter is to provide Registered Exporters by way of import replenishment the materials required in the manufacture of the products exported. Paragraph 114 of the said Chapter runs thus;

'Export made of products appearing in Appendix 17 will qualify for the grant of import replenishment ('REP') licences, if such exports are made in accordance with the export policy in force'.

Paragraph 119 of the said Chapter reads thus;

'The extent of import replenishment permissible against each product enumerated in column 2 of Appendix 17 shall be that set out in column 3 thereof. These percentages will apply in the case of exports made on or after 1-4-1978 except for registered contracts to whom the relevant provisions would apply'.

Paragraph 120 of the said Policy lays down that categories of Registered Exporters are merchant-exporters, manufacturer-exporters and Export Houses, Paragraph 146 runs thus:

'in order to provide stability for the growth of exports, a scheme has been introduced for the registration of contracts. In such cases a Registered Exporter will be eligible to claim import replenishment at the same rate and for the import of the same items as were permissible on the date of the firm con-tract with the overseas party. However, if the rate of replenishment on the date of export were to be higher than the said rate, the exporter will be eligible to such higher rate. These provisions will also apply to 'deemed exports' covered by Para 116 (b), (c) and (e) above'.

Paragraph 147 states that the details of the scheme are given in Appendix 20. Appendix 20 to the said Policy gives the details of the requirements and procedure regarding registration of Export Contracts. Appendix 17 to the said Policy contains the description of export products covered by the import policy for Registered Exporters, the percentage of import replenishment and materials allowed for import against each product as well as other conditions relating thereto. Column 2 of Appendix 17 contains the description of the goods concerned and Column 3 sets out the percentage of import replenishment. Under the head B in the said Appendix are covered chemicals and allied products. Item B II is 'Drugs and Drug Intermediates'. Item B II-1 is 'Drugs and penultimate (drug) intermediates, n. o. s.'. The remarks in Column 5 against this item, inter alia, show that it is only such of the drugs, which find a mention in the latest Indian Pharmacopoeia, the Pharmacopoeia of the United States of America, British Pharmacopoeia and some other Pharmacopoeias and such other drugs as are specially certified by the Drugs Controller (India) and appearing in the manufacturing licence issued under the Drugs and Cosmetics Act, 1940 (as amended), whichwould be eligible for import replenishment licence against exports if otherwise admissible. The Hand Book of Import-Export Procedures, 1978-79, was also issued by the Department of Commerce, Government of India, which, as shown in the opening part of the said Hand Book, is in the nature of supplement to the import and export policies of the Government. Chapter XIII of the said Hand Book deals with Export Licensing Procedure. Paragraph 316 of the said Chapter deals with pre-ban commitments. The opening part of paragraph 316 runs thus:

'Unless otherwise provided, the following types of pre-ban (including pre-control) commitments will be ordinarily honoured for export control purposes'. Clauses (1) to (5) of this Paragraph set out certain types of pre-ban commitments, Clauses (4) and (5) of the said Paragraph run thus:

'(4) Where, against a specific export order, (i) an irrevocable L/C had been opened and accepted by a scheduled Indian Bank or (ii) advance payment had been received through an authorised dealer in foreign exchange, covering the full f. o. b. value of the consignment, prior to the date ol the ban; or

(5) Where the exporter is able to produce any other evidence which the Head of the regional licensing office considers to be satisfactory proof of a pre-ban commitment. (The Head of the office should in writing record on the file concerned with each case, the reasons for his decision accepting or rejecting the application)'.

Clause (6) of Paragraph 316, provides for details regarding intimation of pre-ban commitments to the concerned authorities. The said Clause, however, lays down as follows;

'.......The submission of such evidence shall not, however, confer any right on the person concerned to the grant of any export licence or permission to export'.

5. From the averments in the petition it appears that after the Public Notice of 30th March, 1979, referred to earlier, the respondents sought certain clarifica-tions from the said Export Council regarding the said Notice and certain correspondence ensued in that., regard. Inour view, it is not necessary to go into that correspondence nor to consider asto what were the clarifications given by the said Export Council, All that, ismaterial to note in this regard is that after 30th March, 1979, therespondents in both the petitions sought permission from the appellants concerned to export certain quantities of Argenti Nitrus in fulfilment at the aforesaid contracts, which we have set out above, and the said appellants refused to permit the said goods to be exported. Thereupon the respondents filed the said two petitions contending that the action of the appellants in notpermitting the respondents to export Argenti Nitrus under the aforesaid contracts was illegal, wrongful and invalid. It may be mentioned here that under certain interim orders passed by this Court, certain quantities of Argenti Nitrus have been allowed to be exported in the partial carrying out of the said contracts. But, we are not concerned with that aspect of the matter in deciding these appeals. In his judgment in the said petitions, Pendse J. came to the conclusion that the Department had proceeded on an erroneous assumption that the article in question, namely, Argenti Nitrus, which is the same thing as silver nitrate B. P., was one which came within the ambit of Entry 77 (ii) of Part 'B' of Schedule I to the said Order before its amendment on 30th March 1979 or of item 55 of Part 'A' in Schedule I to the said Order after the Exports (Control) Amendment Order, 1979, issued on 30th March, 1979, as aforestated. It was held by him that the silver salt, namely, silver nitrate, which is a major component of Argenti Nitrus undergoes various processes including dissolution in sulphuric acid and the identity of silver salt no longer survives when the end product comes into existence. Hence, it would not be proper to describe the said drug as silver salt or silver chemical or compound merely because the major component of such product is a silver salt. It was further held by Pendse, J., that the doctrine of promissory estoppel was attracted and the respondents were entitled to export the goods in question without any licence notwithstanding the provisions of the Exports (Control) Amendment Order, 1979 and the Public Notice dated 30th March, 1979. Pendse, J., however, rejected the contention of the respondents that the export promotion scheme contained in Chapter 18 and Appendix 20 of the said Import Policy was in the nature of aself-contained code determining as to what goods were exportable by the registered, exporters under the said export promotion scheme and hence the provisions of the said Order and the Export Policy would not be applicable at all for the purpose of determining as to whether certain goods are liable to be freely exported in the case of contracts entered into by registered exporters as provided in the export promotion scheme. In view of the conclusions reached by Pendse, J., to the effect that the goods in question viz. Argenti Nitrus, were not covered at all by item 55 in Part 'A' in Schedule I to the said Order and that the doctrine of promissory estoppel was applicable, Pendse, J., allowed the petitions and declared that the article Argenti Nitrus was not covered by item 77 (ii) in Part 'B' of the Schedule I to the said Order prior to its amendment or included in item 55 in Part 'A' of Schedule I after the amendment of the said Order in 1979. In view of this declaration, the appellants, their servants and agents were restrained from preventing the respondents from exporting the said drug known as Argenti Nitrus in fulfilment of their contracts with the foreign buyers which contracts were referred to in the said petitions. It is these judgments that have been sought to be assailed by the appellants in the appeals before us,

6. The first question, which we propose to consider, is, whether the goods in question are covered by item 55 of Part 'A' of Schedule I to the said Order, after the amendment on 31st March 1979. The said item 55, as we have already pointed out runs thus:

'Silver salts, silver chemicals and compounds with more than 50 per cent silver content'.

We may also note the nature of the goods in question. What has been contracted to be sold by the respondents under the aforesaid contracts and what is sought to be exported is Argenti Nitrus. In paragraph 24 of the Miscellaneous Petition No. 1114 of 1979, it has been averred by the respondents that the item Argenti Nitrus must conform to the specifications prescribed in the International Pharmacopoeia. There are similar averments in the other petition also. Silver Nitrate is a chemical containing three elements viz., silver, nitrogen and oxygen, and is referred to in chemistry as Ag NO3 Argenti Nitrus is silver nitrate containing not less than 99.5% of Ag NO3, which really, meansthat impurities are reduced to the level of less than 5%. Argenti Nitrus has been described as comprising transparent, colourless crystals or white crystalline powder, odourless, very soluble in water and soluble in alcohol. Without going into details it appears to us to be the undisputed position that silver has to be chemically treated in order to convert it into silver nitrate and a chemical process has also to be undergone with regard to silver nitrate with a view to reducing impurities to the accepted level of .5% or less and obtain silver nitrate B. P. or Argenti Nitrus. The submission of Mr. Dhanuka, the learned counsel for the appellants, is that silver nitrate is one of the well-recognised and universally accepted categories of silver compounds, Silver nitrate or Ag NO3 is regarded as the most important commercial silver salt. It was submitted by him that Argenti Nitrus is merely silver nitrate of a particular quality and silver nitrate is a silver compound, in fact, the most important commercial silver salt. It was urged by him that merely because Argenti Nitrus is used as a drug, it cannot be called or categorised as a drug, and merely by reason of the use of Argenti Nitrus as a drug it does not cease to be a silver compound. Mr. Dhanuka referred to Text-Book of Inorganic Chemistry by J. R. Partington, Fifth Edition. In this book at page 806 silver nitrate has been described as the most important salt of silver. It has been stated that one of the recognised methods of preparing silver nitrate is to dissolve silver in aqua fortis, boil in a phial with a long neck, not stopped, until one-third has been consumed (evaporated) and finally set in a cold place. By this method one obtains small fusible stones, transparent as crystal. It is also stated on the same page in the next paragraph that silver nitrate decomposes when strongly heated; Oxygen and nitrogen dioxide are evolved and silver remains. Mr. Dhanuka also referred to Encyclopaedia of Chemical Technology, Second Edition, Volume 18. The Chapter on 'Silver Compounds' in this book starts on page 295 and the relevant extract dealing with silver nitrate is at page 298. In this book also, silver nitrate is described as the most Important commercial silver salt. It is stated that this is because it is stable, freely soluble inwater and can be prepared in high purity and it serves as the commercial starting material for virtually all other silvercompounds. It is further stated in the same book (at page 299) that if silver nitrate is heated at 440C it decomposes into metallic silver, nitrogen and oxides of nitrogen. In Encyclopaedia of Industrial Chemical Analysis, Volume 18, the Editor-in-Chief being Foster Deed Snell, we find that on Page 173, 27 types of silver salts are listed and they are described in Table 10 as commercially available silver compounds and their respective uses are also given there. Silver nitrate is one of the items included in the said Table 10. It is mentioned that silver nitrate is used in medicine, mirrors and so on. In Handy and Herman on Silver, Silver nitrate is dealt with in Chapter 16. The opening part of the Chapter shows that silver nitrate is the common starting material for nearly all chemical products of silver, the most important of which is photographic film. These authorities sufficiently establish that from the point of view of scientists and lexicographers in the subject or from the point of view of chemists generally, silver nitrate is one of the silver compounds and is regarded as the most important commercial silver salt. The submission of Mr. Dhanuka is that silver nitrate B. P. or Argenti Nitrus is merely silver nitrate purified to a certain degree and by such purification, which might involve a process, the article does not cease to be a silver compound or a silver salt. In support of this contention Mr. Dhanuka relied on the decision of a Division Bench of the Allahabad High Court in Industrial Gases Ltd. v. Commr., Sales Tax (1968) 21 STC 124. There the article in question was oxygen gas manufactured by the industrial process known as fractional distillation of liquid air and was sold by the assessee both for industrial and medicinal purposes. One of the questions was whether the oxygen manufactured by the assessee was a chemical or medicine. It was held that where oxygen would be regarded as a chemical it would be taxed at the rate applicable to chemicals, namely, when sold for industrial purposes and at the lower rate applicable to medicines, when sold for medicinal purposes. It was submitted by Mr. Dhanuka, on the basis of this decision, that as silver nitrate could be used for medicinal as well as other purposes it could not be regarded as a drug but must be regarded as a silver compound or silver salt. In our view, this decision is not of much relevance in thecontroversy before us. In the first place, we have, with respect, some reservations as to whether for the purposes of the levy of tax it can be said that goods should be categorised according to the use to which they are put. It is apparent that when goods are being sold it is very often impossible to establish as to what are the uses to which they are intended to be put by the purchasers. Where articles are categorised for the purpose of levy of sales tax or customs or excise duty it is well known that the question which often arises is whether the goods in question would fall under one item or the other in the Schedules to the sales tax legislation or customs tariff or excise tariff. The approach of the Court in such cases is to determine what is the trade meaning given to a particular item in the tariff or schedule and see whether the goods in question are included in that category or item according to the trade parlance. In the case before the Allahabad High Court, it is very significant that this principle has been accepted, but there was no evidence as to what meaning commercially was attributed to the word 'chemical'. The next decision retied on by Mr. Dhanuka is a Full Bench decision of the Allahabad High Court in Commr., Sales Tax v, Prayag Chemical Works : AIR1970All191 . In that case it was held that sodium silicate is included in the expression 'chemicals of all kinds' in Item No. 7 of Notification No. ST-905/X dated 31st March 1956. Three separate but concurring judgments were delivered by the three learned Judges who constituted the Full Bench. Pathak, J. (as he then was) in the course of his judgment, has observed that whether a commodity can be described as a 'chemical' for the purpose of the entry in the notification must be determined not by the use for which a particular purchaser buys it but with reference to the general properties which make it saleable to the entire range of prospective buyers. Reference was next made by Mr. Dhanuka to the decision Of the Supreme Court in the leading case of Dunlop India Ltd. v. Union of India AIR 1977 SC 597. It has been held in that case (at p. 606) that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under adistinct entry, the basis of classificationis not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance then there is no difficulty for statutory classification under a particular entry. The question there was whether V. P. Latex which was acquired in the process of manufacturing tyres could be said to fall under Item 39 of the Indian Tariff Act, 1934, the said item being 'rubber raw' or whether it could more appropriately fall under Item 82 (3) (a) of that Act which included, inter alia, artificial or synthetic resins. It was held that V. P. Latex must be regarded as included under the head 'rubber raw'. It is significant that the question there was whether the article in question fell under one entry or the other. It was submitted by Mr. Dhanuka that the head 'silver compound' includes a class of items. The said expression is a generic expression as also the expression 'silver salt'. It was submitted by him that no one would go to a shop and ask for a silver compound or silver salt as such but would only ask for the particular type of silver salt or silver compound which he requires. It was further urged by him that the scheme of Item 77, as It stood before the deletion referred to earlier, shows that the intention was to regulate the export trade in respect of the goods containing silver and that silver in all its forms other than silver coins was intended to be covered under the said item. We may mention here that it was also submitted by Mr, Dhanuka that the technical or scientific meaning of the expression 'silver compound' accords with the trade meaning or popular user, a submission for which we find no basis at all on the record, because there is nothing in the affidavit jn reply which would indicate that the expression 'silver compound' has a trade meaning or that silver nitrate B. P. or even silver nitrate is covered in tha trade meaning attributed to the expression 'silver compound'. It was finally submitted in this connection by Mr. Dhanuka that as the construction given by the customs authorities that ArgentiNitrus or silver nitrate B, P. is a silver compound or silver salt, is a possible construction, the Court should not interfere in the matter and set aside that construction. In this regard, Mr, Dhanuka referred to the decision of theSupreme Court, in Collector of Customs, Madras v.. Ganga Setty : [1963]2SCR277 and another decision in V. V. Iyer v. Jasjit Singh : AIR1973SC194 . It was also submitted by Mr. Dhanuka that in the present case there was no material in the petitions which would show as to what was the trade meaning or popular parlance meaning given to the expression 'silver compound' or 'silver salt', it was submitted by him that the trade or commercial meaning of a particular word is a fact to be proved in each case and until such fact is proved the commercial or trade meaning of common terms must be presumed to be the same as the common meaning or dictionary meaning. In support of this submission Mr. Dhanuka relied on the observation of Ekbote, C. J. in Ramaswamy v. State of Andhra Pradesh (1973) 32 STC 309 decided by a Division Bench of the Andhra Pradesh High Court.

7. As against these submissions of Mr. Dhanuka, the submission of Mr. Rana, the learned counsel for the respondents, is that the primary object oi the Government was to promote exports to the maximum extent in order to earn foreign exchange though not at the cost of the economy of the country and hence the items to which Export Control is sought to be applied must not be interpreted very widely. It was pointed out by him that Export Control in contradistinction with Import Control, is to be exercised in respect of a limited number of items whose supply position demands that their exports should be regulated in the larger interest of the country. He referred to Paragraph 1 of the Export Policy, April 1979-March 1980. Paragraph 3 of the said Policy shows that only items included in Schedule I to the Exports (Control) Order, 197? are under control. No such item can be exported unless it is covered by a valid licence issued by a licensing authority competent to grant an export licence for that item. Goods which are not included in the said Schedule can be shipped without any export licence unless their export is controlled under any other law for the time being in force. It was submitted by him that there is no restriction in respect of exports contracts of pharmaceuticals and medicines and that the item in question before us viz. Argenti Nitrus, is a drug or medicine and hence was not covered by the original Item 77 (ii) at all nor isit now covered by Item 55 of Part 'A' of Schedule I to the said Exports (Control) Order, 1977. It was submitted by him that the words used in the import and export policy books and statutory orders framed under the said Act must be understood and construed in their popular sense i. e. in the sense in which they are understood by persons engaged in or used to trade in the article in question. In support of this contention, several authorities were cited by Mr. Rana. But, it is hardly necessary to refer them, because it is now well settled that the words describing the items in sales tax legislation or customs legislation or other fiscal legislation must be understood and construed according to their popular sense viz. in the sense in which they are understood by persons dealing with the commodities in question. However, we may refer to some of the cases relied on by Mr. Rana in this connection. In H. R. Syiem v. P. S. Lulla : (1970)72BOMLR534 , on a difference of opinion between Tarkunde and Vimadalal, JJ., it was held by Kot-wal, C. J. that the entries in the Index attached to the Import Trade Control Schedule are of the nature of aids to construction not necessarily legal and binding but which aids should be invoked in the case of doubt or difficulty in order to throw light upon what was intended by the broad classification and broad entries in the remarks column in the Schedule. At page 562 of the said report there are observations made by Kotval, C. J. that when we are dealing with the Import Export Trade Control Order, the words used in the I. T. C. Schedule must be understood in the sense in which traders importing the goods commonly understand them. In support of this conclusion Kotval, C. J. has cited the observation of the Supreme Court in Commr. of Sales Tax, Indore v. M/s. Jaswant Singh Charan Singh : [1967]2SCR720 that: 'But it is now well settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense'. Reliance was placed by Mr: Rana on the decision of a single Judge of this Court in Subhash Chandar Nishat v. Union of India (Misc. Petn. No. 60 of 1972 decided on 21-7-1977 andreported in 1979 ELT 212. Ithas been held there that the meaning suggested by technical and scientific tests can never be preferred to the meaning gathered from the common parlance of the people in trade and commerce conversant with the subject matter. The submission of Mr. Rana is that in popular parlance or in trade parlance silver nitrate B. P. is regarded as a drug and, therefore, it cannot be considered to be a silver compound or silver salt or silver chemical. It was urged by Mr. Rana that if the intention was to prohibit or ban the export or control the export of silver nitrate B. P. that article should have been specifically mentioned in Part 'A' of Schedule I to the Exports (Control) Order, 1977. Reference was also made by Mr. Rana to a decision of the Orissa High Court in State of Orissa v. Janata Medical Stores (1976) 37 STC 33 : 1976 Tax LR 1451 where it was held that thermometers, lactometers, syringes, eye-wash glasses and measuring glasses do not come within the meaning of the expression 'glassware' in Serial No. 38 of the schedule of taxable goods in Notification No. 33927-F dated 30th December 1957, issued under the first proviso to Section 5 (1) of the Orissa Sales Tax Act, 1947. It has been held in that case: (page 34) -

'.....The extreme, peculiar andscientific meaning of the goods, which might sometimes deviate from the popular meaning, cannot prevail. 'Glassware' as understood from the Shorter Oxford Dictionary is 'articles made of glass'. In popular sense glassware would ordinarily refer to articles made of glass. In general use, when glassware is referred to one's mind, thermometers, lactometers, syringes or eyewash glasses or even measuring glasses do not occur. A general merchant dealing in glassware ordinarily does not deal in these articles'.

It is really needless to refer to any other decisions in this regard, because it seems to be a well accepted principle that when items are described in a Schedule or Notification under taxation laws generally or laws relating to imports and exports, it is normally the popular meaning which is taken into account viz. the meaning attributed to the terms used in the said schedules or notifications by people ordinarily accustomed to deal in such articles. The submission of Mr. Rana is that in popular parlancesilver nitrate B. P. is regarded as a drug and hence it cannot be regarded as a silver chemical, silver compound or silver salt. It was pointed out by Mr. Rana that even in the Index to the Import Trade Control Policy for the year April 1968-March 1969, which is known as Import Control Tariff, silver nitrate B. P. is classified as drug and drug intermediate under Item B. 19 in Section II as can be seen if the second item on page xxxviii of Section III of the Index is read with B. 1.9.7 at page 45 of the said Import Trade Control Policy. It was urged by him that this shows that even the Import Control authorities in the year April 1968 to March 1969 treated silver nitrate B, P. as a drug and not as a chemical. In order to show that silver nitrate B. P. or Argenti Nitrus must be regarded as a drug, considerable reliance was placed by Mr. Rana on the provisions of the Drugs and Cosmetics Act 1940, which was enacted to regulate the import, manufacture, distribution and sale of drugs and cosmetics, Section 8 of that Act provides that in relation to a drug, 'standard quality' means that the drug must comply with the standard set out in the Second Schedule and the Second Schedule provides that drugs must be included in the Indian Pharmacopoeia or any other Pharmacopoeia of any other country, and must conform to the standards of identity, purity and strength specified for drugs in the edition of such official Pharmacopoeia for the time being in force. It was pointed out by him that it is the admitted position that Argenti Nitrus is one of the drugs covered by the Drugs and Cosmetics Act and requires a licence for its manufacture, storage and sale. Mr. Rana drew our attention to the fact that samples taken from the consignments sent pursuant to the interim orders passed in these matters were sent to recognised laboratories like Italab Private Limited and Ar-Ex Laboratories Private Limited, and their reports indicate that the samples complied with the prescribed standards of quality as set out in various Pharmacopoeias. It was pointed out by Mr. Rana that the item in question was not merely silver nitrate which might be considered to be a silver salt, silver chemical or silver compound but silver nitrate B. P, which, as we have shown earlier, means silver nitrate of the purity specified in the British Pharmacopoeia. Mr.Rana pointed out that in case of magnesium sulphate, in the Import Trade Control Policy for 1968-69 magnesium sulphate by itself was treated as a chemical in Item B.2.1 of Section II, but magnesium sulphate B. P. was treated as a drug and drug intermediate in Item B.19.2 of Section II of the said Policy. The same position prevailed regarding castor oil and medicinal castor oil or castor oil B. P. It was also pointed out by Mr. Rana that in the Export Statistics prepared by the Basic Chemicals, Pharmaceuticals and Soaps Export Promotion Council, an official body comprising of the representatives of the Government and the trade, in respect of the years 1969-70 to 1971-72, silver nitrate B. P. is shown as a separate item and not Jumped up with silver nitrate generally. Our attention was also drawn by Mr. Rana to a book titled Drugs of Choice, 1978-79 with Walter Model as the Editor, where various uses of silver nitrate as a drug have been discussed, Mr. Rana also drew our attention to the various Pharmacopoeias viz. British Pharmacopoeia and Indian Pharmacopoeia. It is not necessary to refer to all these. It is sufficient to point out that in ths British Pharmacopoeia of 1963 the item of silver nitrate or Argenti Nitrus is included, The contents show that the item referred to must contain not less than 99.8% of AgNO3. In our view, it is not particularly necessary to refer to this material in detail, because there is no doubt that silver nitrate is used and recognised as a drug, although it is true, as shown even in the material relied upon by Mr. Rana, that it has also other uses.

8. In our view, the crucial question which arises for consideration in connection with the aforestated contentions is, whether Argenti Nitrus or silver nitrate B. P. should be held to be covered by the words 'silver salts, silver chemicals and compounds with more than 50 per cent silver contents. There is no dispute that Argenti Nitrus has more than 50 per cent silver contents, What we have to consider is whether Argenti Nitrus or silver nitrate B. P. can, for the purposes of export control, be considered to be silver salt, silver chemical or compound. It is true that normally speaking, these words 'silver salt, silver chemical or compound' would have to be interpreted in accordance with the trade parlance or popular parlance. What we have to examine iswhether there is material on record before us to show as to what is popular parlance meaning of these words and whether these words have any particular meaning according to the trade parlance or popular parlance.

9. Coming to the petitions themselves, the averments are to the effect that the products sought to be exported by the respondents, who are the original petitioners, were drugs and penultimate drug intermediates. There are no specific averments in the petitions to the effect that in trade or common parlance the words 'silver salt, silver chemical and compound' would not include Argenti Nitrus or silver nitrate B. P., nor is there any averment in the petitions to the effect that there is any separate market as such for silver salts, silver chemicals or silver compounds and that silver nitrate B. P. or Argenti Nitrus is not one of the items dealt with in that market. The only averments to be found in this regard are in the affidavit in rejoinder in Misc. Petn. No. 1114 of 1979, affirmed by Radhesham S. Banka, the Manager of the respondents. In paragraph 4 of that affidavit, it has been alleged that the markets for drugs, on the one hand, and silver salt, silver chemical or compound, on the other, are different. It has been further stated that their uses are different and in the trade such an article, namely, silver nitrate B. P. is not considered to be a salt, chemical or compound and one cannot be, and is not, used in place of the other. It would appear that if the averment that the markets for drugs on the one hand, and silver salts, silver chemicals or compounds on the other, are different, is correct, there might be substance in Mr. Rana's contention that in popular parlance silver nitrate B, P. or Argenti Nitrus, which may be regarded as a drug, cannot be said to be a silver salt, silver chemical or compound. Two questions, however, have to be considered in this connection. In the first place, whether the respondents should be allowed to take up such a contention in view of the fact that the averments in this regard have been for the first time made in the affidavit in rejoinder and secondly, even if they are allowed to take up such a contention, any serious reliance can be placed on the averments to the aforesaid effect made in the said affidavit in rejoinder. In this regard, reliance was placed by Mr. Rana on the decision of the Supreme Court in S. D. G. Pandarasannidi v. State of Madras : [1965]3SCR17 . In that case, a notification dated 4th August 1956, issued by the Governor of Madras in exercise of the powers conferred on him by Sub-section (4) of Section 64 of the Madras Hindu Religious and Charitable Endowments Act, 1951, directing the continuance of the earlier notification dated 25th May, 1937 for a period of five years from 30th September 1956 was challenged by a writ petition filed in the High Court of Madras. That writ petition was rejected by the High Court. In that case, as shown by the discussion in paragraph 17 of the report, one of the pleas taken up by the appellant, who was the petitioner before the High Court, the plea being of violation of principles of natural justice, was rejected by the High Court on the ground that it had not been raised by the appellant in the writ petition in the sense that the plea was not mentioned in the first affidavit filed by the appellant in support of his petition but it was only in the affidavit in rejoinder filed by the appellant the said plea was expressly taken. When the matter was argued before the High Court, the respondents had full notice of the fact that the said plea was one of the grounds or pleas on which the appellant had challenged the validity of the impugned notification or order. It was held by the Supreme Court that the High Court was in error in assuming that the ground in question had not been taken at any stage by the appellant before the matter was argued before the High Court. It is true that in that case a plea of violation of principles of natural justice, in that the notification in question was issued without giving an opportunity to the appellant to show cause why the earlier notification should not be extended, was allowed to be taken for the first time in the affidavit in rejoinder. It, however, appears that there was no serious dispute that this was the correct factual position. In our view, in the light of this judgment, it cannot be said that a plea cannot be taken for the first time in the affidavit in rejoinder. However, the Court should be somewhat cautious in accepting such a plea. In the present case, it seems to be far from the accepted position that in trade parlance or popular parlance the words 'silver salt, silver chemical or compound' do not include a drug or that there are separate markets for silver salts,silver chemicals or compounds as such or that Argenti Nitrus is not one of the items dealt with in such a market. In fact, the correctness of these averments seems to be open to serious controversy and has actually been controverted by Mr. Dhanuka before us. Merely because, the appellants did not file an affidavit in surrejoinder, probably in view of the expedition with which the matter was to be heard, it cannot be said that the averments to the aforesaid effect in the affidavit in rejoinder are uncontroverted. Moreover the affidavit in rejoinder has been made merely by the Manager of the respondents, and the respondents, as can be seen from the petitions, merely carry on business as exporters of drugs and chemicals. There is nothing to show that they are dealers in silver salts, silver chemicals and compounds in the local markets. Moreover, there is not a single affidavit, supporting the averments to the aforesaid effect, made by any independent person dealing either in silver salts, silver chemicals or compounds or in drugs. If the respondents expected the aforesaid averments to be relied on, we should have expected that they would have stated as to which is the place where there is a market for silver salts, silver chemicals or compounds. In fact we doubt seriously whether there is any market for silver salts, silver chemicals or compounds as such. There may, of course, be a market for items which could be included in the words 'silver salt, silver chemical or compound', but we have grave doubts as to whether there is any market for silver salts, silver chemicals or compounds generally as such. In view of what we have discussed earlier, we are of the opinion that there is no reliable evidence of trade or popular parlance regarding the meaning of the words 'silver salt, silver chemical or compound' or that within the said meaning the said words would not include drugs. We are afraid that this aspect of the matter does not appear to have been fully appreciated by the learned trial Judge, who has placed reliance on the aforesaid averments in the affidavit in rejoinder as if there was no controversy regarding the same. We are unfortunately unable to agree with this approach. We may also point out here that we do not agree with the learned trial Judge that merely because some processes had to be undergone before the silver salt,namely, silver nitrate, is converted in to silver nitrate B. P. or Argenti Nitrus, it would necessarily lead to the conclusion that silver nitrate B. P. or Argenti Nitrus is not silver salt or silver chemical, It is common ground that silver nitrate B. P. or Argenti Nitrus is really silver nitrate purified to the required degree. Therefore, unless there is evidence that the words 'Silver Salt, silver chemical or compound' have any trade meaning and that silver nitrate B. P. would not be covered with-in such trade meaning, it cannot be assumed that merely because silver nitrate undergoes some process before conversion into silver nitrate B. p., silver nitrate B. P. cannot be regarded as silver salt, silver chemical or silver compound. As we have already pointed out, there ia no such reliable evidence in these mat-ters.

10. The same question viz. whether silver nitrate B. P. could be included in the words 'silver salt, silver chemical or compound' can also be looked at from another point of view. It is undoubtedly true, as has been laid down in a number of decisions, to some of which we have referred, that, normally speaking, entries in tariff schedules or any schedules to the Export or Import Control or to the Sales Tax Acts must be interpreted according to their trade or popular parlance. However, it is not as if the fundamental principle of legislative interpretation is any different regarding the interpretation of items in such schedules. That principle is that words in a statute or schedules to statutes or statutory orders must be interpreted so as to give effect to the legislative intent. As observed in Maxwell on the Interpretation of Statutes, Twelfth Edition, page 28:

'.........The object of all interpretationis to discover the intention of Parliament, 'but the intention of Parliament must be deduced from the language used', for 'it is well accepted that the beliefs and assumptions of those who frame Acts of Parliament cannot make the law'.'

We have, therefore, to see as to what was the legislative intent when the words 'silver salt, silver chemical or compound' were used in item 55 in Part 'A' in Schedule I to the Exports (Control) Order, 1977. When the said Order was passed and amended, as we have already set out earlier, it appears to us, prima facie, that the expression'silver salts, silver chemicals and compounds' was not used with a view to describe any goods according to trade or popular parlance at all. As we have already observed, we have grave doubts as to whether there is anything like 'silver salt, silver chemical or compound' as such in popular or trade parlance. In this regard it has been submitted by Mr, Dhanuka, and in our view not without force, that there are some entries in Part 'A' of Schedule I to the said Order, which describe what is intended to be covered by using words in a generic sense or in the sense in which they are denned in the dictionary rather than according to popular parlance. It was submitted by him that it is not as if words and expressions in entries in the Schedule to the Exports (Control) Orders are invariably employed according to the trade meaning or popular parlance as such. For example, item 25 in Part 'A' of Schedule I to the said Order as from April 1979, reads thus:

'Metals and their compounds, the following :

(i) Beryllium and its compounds, (ii) Lithium and its compounds.

XX XX XXXX XX XX (xii) Mercury.'

The opening part of item 27 in the same Part refers to 'Chemicals' and thereafter sets out 21 types of chemicals. In Part 'B' of the same Schedule we find that the opening part of item 45 reads as follows:

'Minerals ores and concentrates, the following:

(i) Bauxite.

(ii) Iron Ores,

XX XX XXXX XX XX (v) Manganese ores, XX XX XXXX XX XX

Item 81 of the same Part reads 'Ferro Alloys'. It does, prima facie, appear that these entries are also framed not with a view of being interpreted according to trade parlance but according to the generic meaning of the words used. They appear to contain language used in the dictionaries or scientific compilations, rather than words of trade parlance or popular parlance. Similarly, it would appear to us that the words 'silver salts, silver chemicals and compounds' have been used in their generic sense or as they are denned in scientific works. Mr. Dhanuka has produced ample materialbefore us, to which we have already referred, which would clearly show that in scientific books dealing with silver and in scientific encyclopaedias silver nitrate B. P. is regarded as a type of silver nitrate and would be included in the expression 'silver salt, silver chemical and compound'. In fact, as we have already referred to earlier, it is regarded as the most widely known commercial silver salt. We may, however, make it quite clear that in the present case had there been any reliable evidence that the words 'silver salt, silver chemical and compound' had any meaning in trade or popular parlance and that in such parlance a drug like silver-nitrate B. P. was not included within the connotation of those words we would have undoubtedly held that the expression 'silver salt, silver chemical or compound' must be interpreted according to the meaning in trade or popular parlance. However, as we have already pointed out, there is no such evidence in the present case. II is true that the material relied upon by Mr. Rana does indicate that in the Import Trade Control Policy for the year April 1968, to March 1969, silver nitrate B.P. has been treated separately from ordinary silver nitrate and has been treated as a drug unlike ordinary silver nitrate. This, however, in our view, cannot govern the decision of the present case. In the first place, silver nitrate B.P. was separately treated as a drug not for the purpose of export control but for the purpose of import trade control and in the import tariff and that too for the period April 1968 to March 1969. Mr. Rana has referred to the groupings in Appendix 17 to the Import Policy for April 1978 to March 1979, (as amended up to 31-10-1978), which are for a different purpose altogether viz., for the purpose of giving import replenishment and these groupings, in our view, cannot govern the meaning of the words or expressions used in item 55 of Part 'A' of Schedule I to the said Order. As has been repeatedly pointed out, it would be an error in construction if the words used in one statute or instrument are to be interpreted with reference to the words used in other statute or other instrument. The provisions of the Export Control Order cannot be interpreted with reference to the groupings of items for the purpose of replenishment of imports, which groupings have different scheme and are for a different purpose. Really speaking, in our view,what Mr. Rana has sought to do is to make his submissions on the footing as if there was a list of items of which the export was free and the item of 'drugs' was one of the items therein. If that had been the situation, it would undoubtedly have been the correct position that silver nitrate B. P. would be covered by the item 'drugs' and not by the words 'silver salt, silver chemical and compound'. But, it is beyond dispute that there is no list as such of items of which the export is free, and the result is that what we have really to see is whether the item in question viz., silver nitrate BP, falls within any of the items in Part 'A' or Part 'B' of Schedule I to the said Order. In our view, on a fair reading, the said item would be covered by item 55 in Part 'A' of Schedule I to the said Order and it must be regarded as silver salt, silver chemical or compound. It is the admitted position that silver nitrate BP has more than 50 per cent silver content and hence, in our view, it is covered by item 55 of Part 'A' of Schedule I to the Exports (Control) Order 1977. Before ending with the discussion on this point, we must express our surprise that notwithstanding the judgment of Pendse, J., which was delivered on 5th September 1979, the authorities have failed to clarify the matter and to make clear what appears to us to be their intention, namely, to include silver nitrate BP in the list of items which could not normally be exported by including the said item specifically in Part 'A' of Schedule I to the said Order. There would have been no difficulty in doing this, because it is not as if these Schedules are required to be passed by the Legislature. It is the governmental authorities which have the power to amend these Schedules and we see no reason why that could not have been done, so that at least arguments such as we have set out above could be avoided. The fact, however, that this has not been done cannot make any difference to the decision of the appeals before us, as, according to us, silver nitrate BP or Argenti Nitrus is covered by the item 55 of Part 'A' of Schedule I to the said Order.

11. We now propose to deal with the arguments on the question of promissory estoppel and other allied aspects. On these points, the arguments on behalf of the respondents in both the appeals were advanced by Mr. J. C. Bhatt, the learned counsel for the respondents in appealNo. 339 of 1979. Mr. Bhatt made his submissions regarding these questions on the basis of the provisions contained in the Import Policy for April 1978 to March 1979 in respect of registered exporters who had registered their contracts and in particular on Paragraph 146 read with Paragraph 119 thereof. It was pointed out by him that at the time when the respondents in these appeals, who are registered exporters, registered their contracts, the export of silver nitrate was allowed under item 77 (ii) of Fart 'B' of Schedule I to the said Order read with Open General Licence (O. G. L.) No. 3. Chapter 18 of the said Import Policy (April 1978-March 1979), deals with Registered Exporters. The first Paragraph viz., Paragraph 113, in this chapter makes it clear that the object is to provide Registered Exporters by way of import replenishment the materials required in the manufacture of the products exported. We have already set out most of the relevant provisions of Chapter 18 of the said import Policy. Hence there is no need to repeat the same at this stage. It may, however, be noted that it is provided in the first paragraph of Appendix 20 to the said Import Policy, which lays down detailed provisions for registration of export contracts that the contracts, should be got registered with an authorised dealer in foreign exchange within 45 days from the date of signing of the contract. In the case of contracts pertaining to IBRD/IDA aided projects in India, the registration can be made with any Bank.

12. The first submission of Mr. J. C, Bhatt was that the respondents were entitled to export silver nitrate despite deletion of item 77 (ii) from Part 'B' of Schedule I to the said Order, as they had entered into firm contracts prior to the deletion of this item on 30th March 1979. It was submitted by him that the amending Order dated 30th March 1979 by which the said item was deleted and shifted to Part 'A' of the said Schedule was not retrospective in its operation. It was urged by him that no power was given by Section 3 of the Imports and Exports (Control) Act, 1947 to the Central Government as the delegate of the Parliament to issue an order in the nature of amending order with retrospective effect and the amending order cannot have retrospective effect. In support of this contention Mr. Bhatt relied on the decision of the Supreme Court in CannanoreSpg., & Wvg. Mills v. Customs Collector, : 1978(2)ELT375(SC) . In our view, this submission cannot be accepted. It is perfectly correct that the amending order is not retrospective in its effect. But, on the other hand, it is clear that it applies to all exports sought to be made after the date of the said order and hence would apply, in terms, to any export of silver nitrate sought to be made after the passing of the said amendment order on 30th March 1979.

13. It was next urged by Mr. Bhatt that the firm contracts entered into by the respondents and the legal consequences arising therefrom were things done prior to 30th March 1979 and conferred rights on the respondents which were not affected by the deletion of item 77 (ii) from Part 'B' of Schedule I to the said Order and transfer of the said item to Part 'A' of the said Schedule. Mr. Bhatt relied on several decisions in support of this contention. It was submitted by him that firm contracts with the overseas parties were entered into and duly registered. Those contracts were transactions effected before the amending order and once firm contracts were entered into, vested rights accrued under Paragraph 146 of the said Import Policy for 1978-79 to the respondents to export silver nitrate as per those firm contracts which had been duly registered. In our view, it is not possible to accept this submission either. Paragraph 146 cannot be read in isolation as sought to be done by Mr. Bhatt. It will have to be read along with Paragraph 114 which provides that exports made of products appearing in Appendix 17 will qualify for the grant of import replenishment licences, if such exports are made in accordance with the export policy in force. All that Paragraph 146 of the said Import Policy provides is that in the case of a registered exporter he will be entitled to claim import replenishment at the same rate and for the import of the same items as were permissible on the date of the firm contract with the overseas party, subject to this that if the rate of replenishment on the date of export were to be higher than the said rate, the exporter will be eligible to such higher rate. Reading together these two provisions and the other relevant provisions, to which we have already referred, it appears to us that the right to import replenishment accrues or becomes vested only when the export of items mentioned in Appendix 17 is completed.Until then, there is no right to import replenishment. It appears to us that, looking to the scheme of Chapter 18, which deals with registered exporters, the right to an import replenishment licence is given in Paragraph 114, which provides that such right will accrue if exports are made in accordance with the export policy in force. Paragraph 119, deals with the extent of import replenishment and provides that the extent of import replenishment against each product enumerated in column 2 of Appendix 17 shall be that set out in column 3 thereof. It is true that there is a further provision in the said Paragraph that these percentages will apply in the case of exports made on or after 1-4-1978 -- except for registered contracts to whom the relevant provisions would apply. But, this, however, does not contemplate that registered exporters who have registered their contracts are entitled to such import replenishment unless they comply with the basic condition of Paragraph 114 to which we have referred earlier. Thus, Paragraph 146, as we have already pointed out, provides that registered exporter will be entitled to import replenishment at the same rate and in respect of the same items as were permissible on the date when the firm contracts were entered into with the overseas party. But, if the rate of replenishment on the date of export were to be higher than the said rate, the registered exporter, who has registered his contracts, would be eligible to such higher rate. This only shows that a registered exporter who has registered his firm contract, if he complies with the condition of Paragraph 114, namely, carries out the exports in accordance with the export policy then in force, would be entitled to replenishment at the rate referred to in Paragraph 146 and would not be limited to import replenishment at the rates referred to in Paragraph 119. But he has still to comply with the basic condition of Paragraph 114 viz., that the export must be made in accordance with the export policy then in force. It is significant that it is not as if there is a separate provision for import replenishment to registered exporters whose contracts have been registered. All that is provided is that a registered exporter who has registered his contracts and carried out the export in accordance with the export policy in force will beentitled to import replenishment at the same rate as was permissible on the date of the firm contract with the overseas party or if the rate of replenishment on the date of export were to be higher than the said rate, the registered exporter would be eligible to such higher rate. It is not as if a registered exporter, who has registered his contracts, earns any right to import replenishment at an earlier stage or at a different stage from a registered exporter who has not registered his contracts. The right to replenishment accrues only when the export is completed and, moreover, that export has to be in accordance with the export policy in force. In view of this, even though the amending order of 30th March 1979, has no retrospective force, it would make no difference to the export of silver nitrate sought to be effected by the respondents after the coming into force of that order, In the light of the aforesaid view which we are taking, it is not necessary to refer to the decisions relied on by Mr. Bhatt in this connection.

14. It was contended by Mr. Bhatt that the order of 30th March 1979 in effect repealed item 77 (ii) of Part 'B' of Schedule I to the said Order and this repeal could not affect any right, privilege, obligation or liability acquired, accrued or incurred under the said item prior to 'its repeal. In support of this contention, Mr. Bhatt relied on the provisions of section 6 of the General Clauses Act, 1897, the relevant portions of which run as follows:

'Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not -

(a) xx xx xx (b) xx xx xx (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(d) xx xx xx (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, any such penalty, forfeiture or punishment may be imposed as if the Repealing Act or Regulation had not been passed'.

In this connection, Mr. Bhatt relied upon the decision of the Supreme Court in Universal Imports Agency v. Chief Controller of Imports and Exports : [1961]1SCR305 . In that case by the reason of the Indo-French Agreement D/- 21st Oct., 1954, the Govt. of India made the French Establishments (Application of Laws) Order (1954) under the Foreign Jurisdiction Act (1947) applying the Indian Laws to Pondicherry. The effect of that Order was that the French laws were repealed by the application of the Indian laws in the same field occupied by the French laws subject to a saving clause. The petitioners in Pondicherry entered into, before the merger, firm contracts of sales by import with foreign sellers, made available foreign exchange either under Letters of Credit or otherwise, and the goods were shipped either before or after the merger, though they reached their destination at Pondicherry after the merger. The said goods were confiscated by the Collector of Customs on the ground that they were imported without licence as required under the Indian laws. Before merger Pondicherry was a free port without any restrictions on imports, except on a few items, and the importers could acquire foreign exchange either at the official rate in respect of some transactions or at the open market rate in respect of others, Paragraph 6 of the Order on the basis of which orders of confiscation were issued had a saving clause. The said saving clause embodied in paragraph 6 of the Order read:

'Unless otherwise specifically provided in the schedule, all laws in force in the French Establishments immediately before the commencement of the Order, which correspond to enactments specified in the Schedule, shall cease to have effect, save as respect things done or omitted to be done before such commencement'.

It was held that the words 'things done' in paragraph 6 were comprehensive enough to take in a transaction effected before the merger, though some of its legal effects and consequences projected into the post-merger period. It was, inter alia, held that the effect of the contracts under the pre-existing law was that the terms thereof could have been implemented without any customs bar placed against the import. A purchase by import involved a series of in-targeted activities commencing from the contract of purchase with a foreign firm and ending with the bringing of the goods into the importing country and the purchase and resultant import formed parts of the same transaction. The bringing of the goods into India and the relevant contracts entered into by the petitioners, with the foreign dealers formed parts of the same transaction. The imports, therefore, were the effect or the legal consequence of the 'things done' i. e. with the contracts entered into by the petitioners with the foreign dealers before merger. In our view, this decision is based on an altogether different set of facts and has no application to the case before us. In the first place, the provisions of Section 6 of the General Clauses Act would apply to a repeal and not to an amendment and secondly, Section 6 in its operation is confined to the repeal of an enactment. In the present case, even assuming that the amending order of 30th March, 1979, repealed item 77 (ii) of Part 'B' of Schedule I to the said Order as submitted by Mr. Bhatt, there was no question of the repeal of any enactment but merely of a provision of an order issued by the Central Government under the powers conferred on it under Section 3 of the Imports and Exports (Control) Act, 1947. The case before the Supreme Court was altogether a different type of case where a new set of laws was made applicable and the principle laid down therein can have no application to the case before us.

15. Coming next to the main argument of Mr. Bhatt with regard to promissory estoppel it was submitted by him that prior to 30th March 1979 export of silver nitrate was allowed under item 77 (ii) of Part 'B' of Schedule I to the said Order read with O. G. L. No. 3. It was submitted by him that by Paragraph 146 read with Paragraph 119 of the Import Policy for 1978-79, a representation was held out by the Government to registered exporters that if they entered into firm contracts for the export of silver nitrate with overseas parties and complied with all the requirements for the registration of these contracts, they would be entitled to import replenishment at the rate provided in the said Paragraph and would be permitted to carry out whatever they were required to do in order to earn that replenishment, namely, to complete the export, whatever might be the export policy at the time when the export wassought to be effected. It was submitted by him that on a proper constructions thereof Paragraph 114 does not prevent compliance with a promise or carrying out of the representation to a registered exporter who has registered his contracts and hence Paragraph 114 cannot be read to nullify the exports promised to be allowed under Paragraph 146 of the said Policy. It was urged by him that the Government, in law, is in a position to carry out its promise despite the deletion of item 77 (ii) of Part 'B' of Schedule I to the said Order and there was no legal prohibition against the Government barring it from permitting the export of silver nitrate in exercise of the powers under Clause 15 (b) of the said Order and hence the question of estoppel against the exercise of legislative power did not arise. In support of this contention strong reliance was placed on the recent decision of Supreme Court in M. P. Sugar Mills Co. Ltd. v. State of U. P. : [1979]118ITR326(SC) , a decision which sets out as its object to lay down parameters of the doctrine of promissory estoppel as is applicable in India at present. Mr. Bhatt is right that in this decision the parameters of this doctrine as at present applicable in India have been enunciated, although it has been pointed out that the doctrine of promissory estoppels is a growing doctrine. It was submitted by Mr. Bhatt that if the Government relies on a change of policy in order to go back on its promise, under this decision the Government was bound to give reasons for the change of policy which are satisfactory to the Court, and in the present case, it is the admitted position that the Government has not given any reason as to why the policy had to be changed. We find it difficult to accept this submission. In view of the fact that item 77 (ii) of Part 'B' of Schedule I to the said Order has been deleted from the said Part and transposed as item 55 in Part 'A' of the same Schedule the result is that the export of goods covered by the said item cannot normally be allowed. If the export of such goods is to be allowed under circumstances which cannot be considered as normal i e. for exceptional reasons, an application for licence would have to be made by the person seeking to make such export, and no such application has been made in the present case. Hence the real question is whether the respondents we entitled to export Argenti Nitrus orsilver nitrate BP under the said contracts as a matter of right, and without applying for any licence, on the footing that the item is covered under the O. G. L. No. 3. As we have already pointed out we are of the view that if Paragraph 114 and Paragraph 146 of the said Import Policy are read together the result is that the right claimed by the respondents to import replenishment would accrue to the respondents only when the export is carried out and in view of the provisions of Paragraph 114 such export would have to be in accordance with the export policy in force, which would mean, export policy in force at the time when the export is sought to be effected. Paragraph 119, which we have already set out earlier, provides that the extent of import replenishment permissible against each product enumerated in column 2 of Appendix 17 shall be that set out in column 3 thereof. These percentages were applicable in the case of exports made on or after 1st April 1978 except for registered contracts, regarding whom it is provided that the relevant provisions would apply. Mr. Bhatt placed great reliance on the expression 'except for registered contracts to whom the relevant provisions would apply.' As we have already pointed out, we find ourselves unable to accept the argument of Mr. Bhatt in this connection. We find that it is not as if there is any different export policy or a different provision for percentage of replenishment permissible in respect of a registered contract. Percentages of import replenishment in respect of registered contracts of registered exporters are the same as provided in Appendix

16. The only advantage which a registered exporter who has registered his contract is eligible to claim is that if the rate of replenishment is reduced after the registration of the contract, then on carrying out of the export he is entitled to get import replenishment at the rate provided in Appendix 17 at the time when the firm contract was entered into although the rate might have been subsequently lowered. It is not as if there is a different export policy as far as registered contracts of registered exporters are concerned. In our view, even if a contract is registered by a registered exporter, in order to earn his replenishment, the export would have to be made in accordance with the export policy inforce at the time when the export is sought to be made. In the present case, the attempt is to export silver nitrate without applying for any licence on the footing that whatever be the export policy in force at the time when the export is sought to be made, the respondents are not governed by the same. As we have already pointed out we are not in agreement with this view. In our view, there was no promise or representation as contended by the respondents, As far as the judgment of the trial Court is concerned, with respect, we are of the view that the learned trial Judge has not fully appreciated the significance of the expression 'if such exports are made in accordance with the export policy in force' in Paragraph 114 of the said Import Policy. In fact, we find that although Paragraph 114 has been referred to in the judgment of the learned trial Judge the impact of the same has not been considered at all. As we have already pointed out, in our view, Paragraph 114 must be read with Paragraph 146 and in the context in which the expression 'the export policy in force' is used, it appears to us that the export policy which is referred to must be the one in force at the time when the export is sought to be made. As far as the contention that a promise was held out in Paragraph 146 of the said Import Policy that the respondents would be permitted to do everything necessary in order to earn import replenishment is concerned, we find that, In the first place, hi neither of the two petitions is there a specific plea by the respondents that they understood the promise contained in Paragraph 146 to be or understood the Government as having made any representation to them that they would be entitled to carry out the export which would enable them to earn the import replenishment, whatever might be the export policy in force at the time when the export was sought to be made. Even apart from this, as we have already observed, in our view, the only promise was that, if the export was effected in accordance with the export policy in force, a registered exporter, who had registered his contract, would be entitled to earn import replenishment at the rate provided in Paragraph 146 of the said Import Policy. We may make it clear that it was contended by Mr. Dhanuka before us that even if the promise or representation were assubmitted by Mr. Bhatt, the said promise or representation could not prevail and the doctrine of promissory estoppel would not apply as the Export Control Amendment Order dated 30th March 1979 effected a legislative change in the said Order and promissory estoppel could not prevail against legislation. It was, on the other hand, contended by Mr. Bhatt that although the said Order was undoubtedly legislative in character and so was its amendment in 1979, yet it was not as if the two Orders or even the said Order was passed by the Parliament. These Orders were passed by the governmental or executive authorities in exercise of the powers delegated to them by the Parliament under Section 3 of the said Act of 1947 and hence did not have the sanctity of legislation duly passed by a representative body like the Parliament or the State Legislature. It was urged by him that in these circumstances there was no reason why the doctrine of promissory estoppel should not prevail against the provisions of the said Amending Order. It is not necessary for us at all to go into this controversy, because we have taken the view that there is no such promise or representation as submitted by Mr. Bhatt. As we are taking the view that the promise or representation contained in the import policy was only to come into effect if the registered exporter, even if he had registered his firm contracts, carried out his exports in accordance with the export policy, hi a sense, it is not necessary for us to examine the other arguments of Mr. Bhatt because they were all advanced on the footing of the promise or representation being that once a registered exporter has registered his firm contracts as provided in Appendix 20 he is entitled to import replenishment at the rate referred to in Paragraph 146 and he is no longer bound by the export policy, and this right is not liable to be defeated by any change in the export policy in force. We do, however, propose to refer to the said arguments very briefly as the same were canvassed at some length before us. We do not, however, consider it necessary to discuss all the authorities cited by him.

17. It was urged by Mr. Bhatt that even assuming that at the time when Argenti Nitrus or silver nitrate B. P. was sought to be exported by the respondents under the aforesaid contract, the said goods were covered by Item 55of Part 'A' of Schedule I to the said Order, it was not as if it were not open to the Government to permit the export at all. It was pointed out by him that the heading of Part 'A' of Schedule I to the said Order itself shows that the goods covered by the various items in Part 'A' are merely not normally allowed to be exported. It was urged by him that in view of this and keeping in mind the language of Paragraph 146 of the said Import Policy and the fact that the respondents had already registered their firm contracts in accordance with the procedure prescribed in Appendix 20 to the said Import Policy the Government ought to have allowed the silver nitrate B. P. covered by the said contracts to be exported. In our view, this argument is not open to the respondents at all. Clause 3 of the said Order provides that save as otherwise provided in the said Order, no person shall export any goods of the description specified in Schedule I, except under and in accordance with a licence granted by the Central Government or by an officer specified in Schedule II. Once it is accepted that the goods in question are covered by Item 55 of Part 'A' of Schedule I to the said Order, no question of there being any duty on the part of the Government to permit the export of such goods would ever arise without the party seeking to make the export applying for a licence. In the present case, the respondents have not made any application for a licence for export of Argenti Nitrus or silver nitrate B. P. covered by the said contracts at all. In fact, the petitions were fought out by the respondents on the footing that they have a right to export the silver nitrate B. P. concerned as if it was still covered by Item 77 (ii) of Part 'B' of Schedule to the said Order and under O. G. L. No. 3. The question as to whether the respondents should be permitted to export silver nitrate B. P. By granting a licence for the same in view of special circumstances does not arise, because no application has been made by the respondents for any such licence. At this stage, therefore, we see no reason to express any opinion as to whether in case the respondents apply for such a licence, the appellants would be bound to, or should normally, issue the same.

18. It was then urged by Mr. Bhatt that the entire Import Policy (April 1978-March 1979) including the provisions of Chap. 18, which deals with registered exporters, were issued by the Chief Controller of Imports and Exports under the power conferred upon him by Clause 15 (b) of the said Order. It was contended by him that this was the view taken by a Division Bench of the Delhi High Court in Civil Writ No. 1038 of 1979 (Nirmal Construction & Finance Co. v. Union of India, decided by V. S. Deshpande, C. J. and Harish Chandra, J. in October 1979). It was submitted by him, and it is common ground, that the Import Policy is published under the directions of the Chief Controller of Imports and Exports. It was further submitted by him that except for the power conferred under Clause 15 (b) of the said Order, no other power is shown under which such a Policy could be published. In view of this, according to Mr. Bhatt, the entire Import Policy must be held to have been issued or published under the powers conferred on the Chief Controller of Imports and Exports by Clause 15 (b) of the said Order. It is just not possible to accept this submission. On a plain reading of sub-clause (b) of Clause 15 of the said Order one finds that it provides that nothing in that Order would apply to any goods covered by executive instructions issued by the Chief Controller of Imports and Exports. In view of tha language of Clause 15 (b) of the said Order, it is clear that what is referred to in the said clause are executive instructions issued by the Chief Controller of Imports and Exports taking out certain goods from the operation of the said Order. It was rightly pointed out by Mr. Dhanuka that, if Mr. Bhatt's argument were correct, then the result would be that in view of the Import and Export Policies issued by the Chief Controller of Imports and Exports, the provisions of the said Order would be rendered almost redundant. It must be borne in mind that the Import and Export Policies issued by the Chief Controller of Imports and Exports deal mainly with procedure. The policy books in respect of imports and exports as well as the Hand Book of Import-Export Procedures, which are issued every year are not statutory documents and several provisions thereof are in the nature of guidelines governing procedure for making applications and also defining the various authorities and officers to whom applications are to be made and who would deal with departmental appeals and so on. It is only where certain por-tions of the Import and Export Policies or the Hand Book of Import-Export Procedures are in the language contemplated by Clause 15 (b) of the said Order that it can be said that they have been issued in exercise of the powers conferred under Clause 15 (b) of the said Order. For example, we find that Clause 11 (1) of the Imports (Control) Order, 1955, is similarly worded to Clause 15 (b) of the Exports (Control) Order, 1977. Clause 11 (1) says that 'Nothing in this Order shall apply to the import of any goods -- (i) covered by an executive instruction issued by the Chief Controller of Imports and Exports to the customs authorities'. In Chapter VII of the Hand Book of Import-Export Procedures, 1978-79, we find that clauses 96 to 124 thereof contain some examples of goods allowed to be imported without following the import-export licensing procedure. For example, Clause 96 of that Chapter states:

'Exposed films imported and allowed to be bonded for preview or censorship or re-export by the Customs authorities'. Clause 100 refers to food parcels sent from abroad as gifts. Clause 104 refers to Children's paintings for the 'Shan-kar's International Competition' for paintings, addressed to the Children's Book Trust, Nehru House, New Delhi. These are examples of directions issued under Clause 11 (1) (i) of the Imports (Control) Order, 1955. It cannot be said that the said entire Hand Book for 1978-79, in so far as it pertains to imports, has been issued under the powers conferred under Clause 11 (1) (i) of that Order. The same is the position here. We have not been shown any clause in the Import and Export Policy books or in the Hand Book of Import-Export Procedures 1978-79 which takes out silver nitrate or silver nitrate B. P. from the operation of the said Order or from the list of goods to which the export licensing procedure applies. If instructions are issued under Clause 15 (b) of the said Order, in our view, they must refer to specific goods and no such instructions regarding silver nitrate or silver nitrate B. P. have been pointed out to us in the present matters. In our view, the policy books both for Imports and Exports as well as the Hand Book of Import-Export Procedures must be regarded mainly as providing the machinery for implementation of the Import and Export Control Orders and no interpretation can be given to themwhich would practically nullify the operation of the said Order. Only such parts of the policy books or Hand Books can be regarded as having been issued under the powers conferred by Clause 15 (b) of the said Order, which, as we have already pointed out, show from the language used that they have been issued under the powers conferred by Clause 15 (b) of the said Order. On a perusal of the judgment, of the Delhi High Court in Civil Writ No. 1038 of 1979 referred to earlier, we find that the Division Bench in this judgment has now here aid that the entire Import Policy or Export Policy is issued under the powers conferred by Clause 15 (b) of the said Order, but only that the impugned public notice of 30th March 1979 amounts to executive instructions issued by the Chief Controller of Imports and Exports contemplated in Clause 15 (b) of the said Order. We may make it clear, however, that even as far as this conclusion is concerned, with respect, we find it a little difficult to accept the same for the reasons which we have already given.

19. The last submission, which was made by Mr. Rana on behalf of the respondents, was that the Import Policy for registered exporters is a self-contained code for imports as well as for exports and neither the provisions of the said Order or the Export Policy would apply to exports by registered exporters, the respondents being registered exporters. It is not really necessary for us to go into an elaborate discussion of this contention, because we find that the learned trial Judge has rejected this contention of Mr. Rana and we are broadly in agreement with the reasons given by the learned trial Judge in this regard. We may, however, briefly note the arguments of Mr. Rana in this connection and the reasons why we are unable to accept the same. It was urged by Mr. Rana that there are different categories of exporters under the Import Policy and the Export Policy. It was pointed out by him that there is no provision in the Export Policy or the said Order for registration of contracts by registered exporters. It was urged by him that even exports which are banned or restricted under the Export Policy may be allowed to be made under the Import Policy for registered exporters. It was contended, for example, that although export of castor oil is directed to be canalised through the State Trading Corporation under the Export Policy andas such it cannot be exported by private individuals, nevertheless medicinal castor oil, which is considered as a drug, is allowed to be exported by registered exporters. In our view, it is not possible to accept this submission at all, As we have already pointed out in our earlier discussion, the purpose of Chanter 18 of the Import Policy (April 1978-March 1979) is to provide not a separate export policy as such for registered exporters who have registered their contracts but merely to make provisions for import replenishment to registered exporters and to provide the rates at which such replenishment is to be granted, Paragraph 114 of Chapter 18 of the said Import Policy, as we have already discussed earlier, clearly shows that the export taught to be made by the registered exporters must comply with the export policy in force such as it may be, In our view, in order to find out as to whether export of an item is permissible or not, primarily, one must look at the Exports (Control) Order, 1977 and the Export Policy in force and not at some provisions of the Import Policy regarding replenishment. As observed by the learned trial Judge, the mere fact that the exporter is a registered exporter and his contract is registered as required under Chapter 18 of the Import Policy would not enable Mm to claim that the said Order with its amendment and the Export Policy (April 1979-March 1980) would have no application to his exports.

20. We may point out that, with regard to the question of promissory estoppel, there is also one other aspect og the matter which can be taken note of It is common knowledge that the Export Policy as well as the Import Policy changes from year to year and hence the so-called representation in the Export Policy or the Import Policy must be read subject to the limitation that the Export Policy and the Import Policy is liable to change from year to year. The respondents here have entered into contracts the performance of which would extend clearly beyond 31st March 1979 and in one case for even more than one year. In this situation it is difficult to expect that the respondents could have relied upon an alleged representation that the Export Policy would not change at all and that they would be permitted to export the goods covered by Item 77 (ii) of Part 'B' of Schedule Ito the said Order of 1977 irrespective of that item being deleted from Part 'B' and shifted to Part 'A' of the said Schedule as has been done. Reference may also be made here to Paragraph 316 or the Hand Book of Import-Export Procedures 1978-79. Although this Paragraph has been relied upon by the learned trial Judge in support of his conclusion in favour of the respondents, it is not really necessary for us to discuss the said Paragraph in any detail, because Mr. Bhatt has specifically stated that he does not rely upon that Paragraph at all. It is, however, significant to note that the said Paragraph deals with pre-ban commitments and states that unless otherwise provided, the types of pre-ban commitments set out in the said Paragraph would be ordinarily honoured for export control purposes. It is significant that even in respect of such pre-ban commitments as are covered by the provisions in the said Paragraph, all that has been stated is that such commitments would be ordinarily honoured for export control purposes. This would show that even in the case of pre-ban commitments it was made quite clear that it was not always obligatory on the Government to honour them but merely that the same would be ordinarily honoured. Sub-paragraph (6) of the said Paragraph sets out the procedure regarding the submission of documents and so on to establish pre-ban commitments. The last part of the said sub-paragraph runs as follows:

'............The submission of such evidence shall not, however, confer any right on the person concerned to the grant of any export licence or permission to export.'

This again emphasizes the same aspect to which we have referred, namely, that even in the case of pre-ban commitments, there was no binding obligation on the Government to honour them nor was any right created in favour of the person who had entered into pre-ban commitments to obtain an export licence, the only provision being that the Government would ordinarily honour the pre-ban commitments, that is, ordinarily allow them to be carried out. This would, in our view, clearly show that no promise or representation was held out that if firm contracts were entered into or registered in accordance with the provisions of Appendix 20 to the Import Policy (April 1978-Marcn1979), export would be allowed to oe made irrespective of the Export Policy which might be in force at the time the export was sought to be made.

21. In view of the aforesaid discussion we are unable, with respect, to agree with the learned trial Judge that Argenti Nitrus B. P. is not covered by Item 55 in Part 'A' of Schedule I to the said Order as amended on 30th March 1979. In this regard, we are of the view that the learned trial Judge, with respect, has failed to take into account the fact that there is no reliable evidence before the Court to show that the words 'silver salts, silver chemicals and compounds' have any trade meaning as such at all or that the drugs do not fall within the connotation of the said words according to their trade meaning or in trade parlance. In fact, as we have already observed, it appears to us prima facie that the said words have been used in their wider or dictionary sense. As we have already pointed out and in view of the reasons which we have discussed earlier, we are also of the view that there was no promise or representation on the part of the Government which would compel the Government to permit the export of Argenti Nitrus or silver nitrate B. P. without the requirement of a licence. We find some support for the conclusions, which we have arrived at, from the fact that similar conclusions have been arrived at by the Division Bench of the Delhi High Court consisting of V. S. Deshpande, C. J. and Harish Chandra, J. in Civil Writ No. 1038 of 1979 referred to above although the reasoning is not identical. Mr. Bhatt has sought to criticise this decision of the Delhi High Court in some detail. We do not, however, find it necessary to discuss that criticism as the above discussion would indicate that we have arrived at our conclusions independently of the said judgment.

22. In the result, we allow the appeals and set aside the judgment and orders of the learned trial Judge. In view of the conclusions at which we have arrived the petitions filed by the respondents will stand dismissed. However, as far as the question of costs is concerned, taking into account the fact that these cases filed by the respondents appear to be in the nature of test cases and also taking into account the fact that the learned trial Judge has not chosen to award any costs to the respon-dents- who were successful before him, as well as all other circumstances, we think that it is proper that the parties should be directed to bear and pay their own costs.

23. Before parting with the matter, we express our appreciation of the assistance rendered to us by the counsel who argued the matters on behalf of the respective parties.

24. Appeals allowed.


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