S.M. Sikri JUDGMENT
J.C. Shah, J.
1. The facts which give rise to Appeal No. 885 of 1967 are these : The Textile Commissioner published on October 10, 1962, a scheme called the Export Promotion Scheme providing incentives to exporters of woollen goods. The scheme was extended by a Trade Notice dated January 1, 1963, to exports of woollen goods to Afghanistan. Messrs. Indo-Afghan Agencies - hereinafter called 'the respondents' - a firm dealing in woollen goods at Amritsar exporter to Afghanistan in September 1963, woollen goods of the f.o.b. value of Rs. 5,03,471-73 nP. The Deputy Director in the office of the Textile Commissioner, Bombay issued to the respondents an Import Entitlement Certificate for Rs. 1,99,459/- only/-. Representations made by the respondents to the Deputy Director and to the Union Government that they be granted Import Entitlement Certificate for the full f.o.b. value of the goods exported failed to produce any response.
2. But in a petition under Art. 226 of the Constitution moved before the High Court of Punjab by the respondents for a writ or an order directing the Union of India, the Textile Commissioner and the Joint Chief Controller of Imports and Exports, Bombay, to issue a licence "permitting import of wool-tops, raw wool, wool waste and rags of the value of Rs. 3,04,012-73 nP", the orders of the Textile Commissioner and the Central Government were set aside. The High Court held that the Export Promotion Scheme specifically provided for granting certificates to import materials of the "value equal to 100% of the f.o.b. value of the goods exported", and the respondents were entitled to obtain import licences for an amount equal to 100% of the f.o.b. value, unless it was found on enquiry duly made under clause 10 of the Scheme that the respondents had by "over-invoicing" the goods disentitled themselves to the import licences of the full value; that no such enquiry was made by the Textile Commissioner and that officer merely proceeded upon his "Subjective satisfaction" that the respondents had "over-invoiced" the goods exported; and that the Union Government acted on irrelevant grounds. The Union of India, the Textile Commissioner and the Joint Chief Controller of Imports and Exports have appealed to this Court with certificate granted by the High Court.
3. The genesis of the export control scheme may first be noticed. The Imports and Exports (Control) Act 18 of 1947 was enacted on March 24, 1947 with the object of enabling the Central Government to continue to exercise the power to prohibit, restrict or otherwise control imports and exports which had till then been controlled by orders issued in the exercise of the powers conferred by r. 84 of the Defence of India Rules, 1939, as extended by the Emergency Provisions (Continuance) Ordinance 20 of the 1946. By s. 3 of that Act it was provided :
"(1) 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 or under the order :-
(a) the import, export, carriage coastwise or shipment as ships stores of goods of any specified description;
(b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried.
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