M. Katju, J. - (1.) -This writ petition has been filed praying for a writ of certiorari to quash the impugned demands dated 6.4.1992 Annexure-18 to the writ petition and dated 27.3.1991 Annexure-21 to the writ petition.
(2.) HEARD learned counsel for the parties. The petitioner has alleged that it is a 100% export oriented unit engaged in manufacture of fine and super fine cotton yarn. It is alleged in paragraph 2 of the petition that the petitioner is successfully exporting to the European and Far-East Asian markets and is a recognised export house and it is also a member of Cotton Textiles Export Promotion Council (hereinafter referred to as TEXPROCIL) which is a body constituted under the Imports and Exports Control Act, 1947 and the Exports (Control) Order, 1988. The petitioner has its factory in Mathura and all the goods which it manufactures are exported. Section 3 of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as an Act) empowers the Central Government to prohibit to restrict the imports and exports by notification in the Gazette. In exercise of that power the Central Government has issued the Exports (Control) Order, 1988. Clause 3 (2) of the said order states that goods specified in Schedule 3 may be exported on the fulfilment of the terms specified therein. The petitioner is controlled by the provisions of Schedule 3 (Open General Licence) and the concerned entry related to the petitioner is Entry 47 (III). This entry provides that any person desirous to make exports to the European Economic Council (E.E.C.) countries will have to obtain allocations for export entitlement from TEXPROCIL. It also states that TEXPROCIL will observe the guidelines issued by the Ministry of Textiles, Government of India. The Government of India, Ministry of Textiles issued notifications dated 31.8.1990, 15.10.1990 and 26.10.1990 Annexures-1, 2 and 3 to the petition. A perusal of the same shows that the Executive Director of TEXPROCIL has been authorised to allocate entitlements for export of yarns, fabrics etc. It further states that the Ministry of Textiles, Government of India shall be the final authority regarding interpretation of any of the provisions of the notifications and that the export entitlement will be allotted only to the exporters registered with the competent Registering authority. In paragraph 15 of the writ petition it is stated that under the Contract Reservation Entitlement System, exporters are entitled to allotment of quotas for purposes of export on the basis of the orders which they have to obtain from foreign buyers before they are entitled to any quota for the purposes of exports. In paragraph 19 of the petition it is stated that the petitioner had applied for quota for export of cotton yarn to Germany which is an E.E.C. country and obtained 4 orders from four buyers against which TEXPROCIL allotted a total quota of 1,39,400 kgs. to the petitioner for export to Germany to be made between the period 1.7.1991 upto 31.12.1991. Copy of the entitlement certificate dated 14.6.1991 is Annexure-4 to the writ petition.
(3.) IT is alleged in paragraph 20 of the writ petition that soon after this entitlement certificate was obtained the E.E.C. imposed on various countries including India a duty called 'Anti Dumping Duty' to the extent of 15.9% of the export price. 'Anti Dumping Duty' means a duty which is imposed by the E.E.C. countries if the price at which the exports are being made by any exporting country is less than the cut off price fixed by the Commission of the E.E.C. countries. This is done in order to avoid under selling by the third World countries. Copy of the order of the Commission of E.E.C. imposing an 'Anti Dumping Duty' is Annexure-5 to the writ petition. IT is alleged in paragraph 21 of the writ petition that soon thereafter the petitioner received a Telex message dated 11.7.1991 from one of its buyer GOERTZ and Co. stating that no letter of credit could be opened in petitioner's favour in view of the 'Anti Dumping Duty' vide Annexure-6 to the writ petition. In the meantime the Government of India suspended all shipments of cotton yarns to all countries including the quota countries w.e.f. 21.9.1991 until further notice vide Annexure-7 to the writ petition. In paragraph 23 of the petition it is alleged that the petitioner by Telex message dated 4.9.1991 wrote a letter to its buyer GOERTZ and Co. stating that since the E.E.C. had decided to withdraw the 'Anti Dumping Duty' against Indian yarn, the letter of credit should now be opened in petitioner's favour. However, since the Indian Government had banned all exports of cotton yarn GOERTZ and Co. cancelled the contract given to the petitioner vide Annexures-8 and 9 to the petition. In paragraph 25 of the petition it is stated that petitioner had also obtained a confirmed order for export from M/s. CITOH for a total export of 8,200 Kgs. to Germany but that buyer also informed the petitioner that in view of the 'Anti Dumping Duty' letter of credit could not be opened and subsequently the contract was cancelled vide Annexures-10 and 11 to the writ petition. Other buyers also cancelled their contracts with the petitioner. It is alleged in paragraph 30 of the petition that the Commission for E.E.C. countries finally removed the 'Anti Dumping Duty' against India vide decision of the Commission dated 27.9.1991 Annexure-16 to the writ petition. It may be mentioned that the 'Anti Dumping Duty' was revoked on 27.9.1991 but the Government of India banned all exports of cotton yarns vide its order dated 23.9.1991 and this ban continued till 15.10.1991 when it was finally revoked. It is alleged in paragraph 32 of the writ petition that the petitioner was granted quota for export, which had to be fulfilled between 1.7.1991 and 31.10.1991, but it could not make exports for the above reasons for no fault of its own. The petitioner had not been able to export any yarn till October, 1991 and hence it wrote to the TEXPROCIL surrendering the balance amount of unutilised quota. Copy of the letter dated 2.11.1991 surrendering the unutilised portion of the quota has been annexed as Annexure-17 to the writ petition. Thereafter the petitioner wrote to TEXPROCIL for release of the performance bonds executed by the petitioner in connection with the export of cotton yarn to Germany, as the petitioner was unable to fulfil its export entitlement for the reasons beyond its control. However, it is alleged in paragraph 35 of the writ petition that to its utter surprise petitioner received a letter from TEXPROCIL demanding Rs. 5,61,780 to be paid by way of compensation for not fulfilling its export obligations vide Annexure-18 to the writ petition. Against that order the petitioner filed an appeal before the Textiles Commissioner, Bombay vide Annexure-19 to the writ petition. That appeal was disposed of by means of an order dated 22.12.1992 whereby only 50% of the compensation/penalty imposed by TEXPROCIL was granted by way of relief, but the petitioner was still required to pay 50% of the total demand created against the petitioner, i.e., Rs. 2,80,830. It is alleged by the petitioner that the impugned order is wholly arbitrary and illegal and is liable to be set aside.;