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Judgment
Sanjib Banerjee, J.—The Court : The writ petitioners have challenged an order of March 12, 2008 passed by the Deputy Director General of Foreign Trade under Rule 7(1)(k) of the Foreign Trade (Regulation) Rules, 1993.
Though the petitioners rely on an earlier notice of July 6, 2004 as the basis for the order of March 12, 2008, it appears from the order itself that the immediate notice on which the order is based was issued on January 2, 2006. By the notice of January 2, 2006 a demand was raised on the petitioner company to pay customs duty together with 15 per cent interest on the excess quantum of goods exported of the value of Rs. 25,58,830/-.
The order recorded that upon receipt of the notice, the petitioner company replied on January 17, 2006 and reasoned that it had fulfilled the export obligation and sought time to import or export goods on the overall value of the licence without any quantitative restriction being imposed. It is the petitioners'' case that the licence was based on paragraph 110 of the handbook. Paragraph 110 would show that a value based advance licence may be issued where the individual quantities are irrelevant. A value based advance licence is distinct from the quantity based advance licence provided for at paragraph 111 of the handbook.
The notice of January 2, 2006 implied that the petitioner company had imported, in terms of quantity, more than what was permissible for the petitioner company to do considering the conditions of the licence. The petitioners refer to paragraph 110 of the handbook to suggest that no assessment based on the quantity of import could be made since the company had obtained a value based advance licence.
The order of March 12, 2008 noticed such objection but there is not even a line expended therein to deal with such contention. The order narrated the history of the matter and the narration culminated in the recording of the contention put forth by the petitioner company. The conclusion followed abruptly thereafter without the authority indicating a link between what preceded the final paragraph and the conclusion evident in the final paragraph.
The order refused to grant or renew any licence to the petitioner company. It has serious consequences and would affect the business of the petitioners. The petitioners are, at the very least, entitled to know the basis for the authority arriving at such conclusion, particularly considering that the petitioners had contended that they had a value based licence and not a quantity based advance licence.
Since no affidavit can improve the order dated March 12, 2008, once the fundamental basis of the challenge is appreciated, such order of March 12, 2008 is set aside and the Deputy Director General of Foreign Trade is directed to reconsider the matter and pass a reasoned order, upon prior notice to the petitioners, within a period of six weeks from the date of receipt of this order.
W.P. No. 439 of 2009 is allowed without any order as to costs. In view of this order, G.A. No. 1584 of 2009 stands disposed of without costs.
Urgent certified photostat copy of this order, if applied for, shall be supplied to the parties subject to compliance with all requisite formalities.