Shah Nanji Nagsi Exports Pvt. Ltd. vs Joint DGFT

We have heard both sides and perused the affidavit in reply and rejoinder. Since prima facie some arguable questions are raised, we proceed to admit the writ petition. Hence, Rule. Respondents waive service.

We have heard both sides on the point of interim relief.

Mr. Nankani appearing for the petitioner would submit that this is a case of imposition of penalty. The settled principle that the Government does not survive on bank guarantee would not be applicable for this is not an issue regarding payment of taxes. Therefore, the ad interim order be continued and should remain operative till the hearing and final disposal of the writ petition.

On the other hand, it is submitted that there is an order passed by the appellate authority on the petitioner''s appeal. The matter had been brought on two earlier occasions before this court. However, the authorities, in the impugned order, have clarified that the petitioner obtain two licences for import of Maze. Prima facie, they were issued with actual user condition. They were aware of this condition. The finding is that the petitioner-company not only created certain false documents to show transportation and processing of corn, but also sold the imported corn. In the further portion of the impugned order, there is a clear finding that the petitioner-company had a mala fide intention and indulged in this act through creation of fabricated documents. Now the very imposition of the actual user condition is challenged. Prima facie, the authorities under the Act would not have considered the legality and validity of imposition of a condition. Their findings are that given such a condition, the same was binding on the petitioner. That having not been complied with and the prima facie conclusion being of fraud and mala fides on the part of the petitioner, we do not think that the petitioner is entitled to an equitable and discretionary interim relief. The petitioner having brought a bank guarantee and instead of making payment of the penalty, we direct that it would be open for the authorities to encash the bank guarantee, but subject to the final orders that would be passed in the petition. If the writ petition succeeds, then, the respondents would be obliged to abide by the orders in the writ petition. We clarify that the tentative and prima facie opinion of the competent authority or the appellate authority shall not influence the Bench while finally deciding the writ petition.

Hearing expedited.

At this stage Mr. Nankani prays that the ad interim order be continued for a period of four weeks so as to enable the petitioner to challenge our order passed today in higher court. The request is opposed by the respondents. All that we have clarified is that the Government and such competent authorities can encash the bank guarantee. When the encashment is by the authorities under the Foreign Trade Act, 1992 and the Central Government, we do not see any reason for the apprehension on the part of the petitioner that in the event they succeed, the amount would not be returned back by the authorities. The request is, therefore, rejected.