A speaking order is an order that speaks for itself & should stand the test of legality, fairness and reason at all the higher appellate forums. Effectively this means that, the order should contain all the details of the issue, clear findings and a reasoned order. However, when the system is corrupt & rotten to the core then there is no way that this can be adhered to. It is surprising that the Export Promotion Authority viz. DGFT & the Highest body viz. Policy Relaxation Committee (PRC) Comprising of the DGFT & all Additional DGFTs does not believe a wee bit in compliance with the issuance of reasoned order & simply treats the contempt of the Supreme Court as a poor joke? This is despite the fact that the Supreme Court order for compliance is brought to their notice in the case!
There is a landmark judgement by the Supreme Court in case of ASSTT. COMMR., COMMERCIAL TAX DEPARTMENT Versus SHUKLA & BROTHERS & in this judgement, the apex court has finally settled the issue that Reasoned Judgement is mandatory requirement of the Law. As a matter of fact, the judgement can be read as treatise on legality & fairness of what is the true value & necessity of reasoned order. It would be worthwhile to point out some of the significant determinations in this case:
–By practice adopted in all Courts and by virtue of judge made law, the concept of reasoned judgment has become an indispensable part of basic rule of law and, in fact, is a mandatory requirement of the procedural law. Clarity of thoughts leads to clarity of vision and proper reasoning is the foundation of a just and fair decision. In the case of Alexander Machinery (Dudley) Ltd. (supra), there are apt observations in this regard to say “failure to give reasons amounts to denial of justice”. Reasons are the real live links to the administration of justice. With respect we will contribute to this view. There is a rationale, logic and purpose behind a reasoned judgment. A reasoned judgment is primarily written to clarify own thoughts; communicate the reasons for the decision to the concerned and to provide and ensure that such reasons can be appropriately considered by the appellate/higher Court. Absence of reasons thus would lead to frustrate the very object stated hereinabove.
The principle of natural justice has twin ingredients; firstly, the person who is likely to be adversely affected by the action of the authorities should be given notice to show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give reason for arriving at any conclusion showing proper application of mind. Violation of either of them could in the given facts and circumstances of the case, vitiate the order itself. Such rule being applicable to the administrative authorities certainly requires that the judgment of the Court should meet with this requirement with higher degree of satisfaction. The order of an administrative authority may not provide reasons like a judgment but the order must be supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders.
Now, the facts of the case are as under:
1.The main reason for justification is that the revalidation is due to the fact that circumstances have gone beyond control of the exporter.
2. Under the contract for the purchase of 15 MT Crude Iodine dtd. 13.9.2017. Please note that the supplier only supplied 5 MT against the said contract.
3. The AA holder was forced to clear 5 MT Iodine under AA No. 0310815276 dtd. 21.8.18 instead of the AA No. 0310806839 dtd. 3.8.2016 since the same had expired.
4. In AA No. 0310806839 dtd. 3.8.2016, revalidation amendment could be carried out only on 7.12.17. The AA had expired & we were not in a position to clear the imported 5 MT Iodine under the 0310806839 as we needed the imported Iodine to continue the export production as already explained.
5. Since the supplier reneged the contract for supply, we were compelled to sign a fresh Contract at a price of US$ 25.45 /Kg. Whereas the old contract was at a price of US$ 21 /Kg.
The PRC rejected the case & the issue was taken up with the PRC & the PRC then advised the exporter to file a review & pay the fees of Rs. 5000.
In the review request, it was brought to the attention of the PRC that:
The PRC has not challenged any of the facts mentioned nor the underlying documentary evidence. Therefore, the fact remains that if the things were beyond the control of the AA holder then why the PRC should punish the AA holder for no fault of theirs.
The PRC has concluded that AA has definite time frame for import/export but the fact Is that there are exceptions like the one in this case where the AA holder is put into trouble by the foreign supplier because they reneged the contract for supply. If the supplies were completed under the contract then there would not have been any problem & there would be no cause for the 2nd revalidation to be sought to complete the imports.
It is pertinent to point out that the documentary evidence placed on record in terms of the reneged contract & the fresh contract for supply of Iodine at a higher price has not been challenged by the PRC because this is incontrovertible. Therefore under these circumstances, it is established beyond any element of doubt that it is beyond the circumstances and control of the AA holder therefore the AA holder cannot be wrongly held responsible & punished for it. There is a provision for 2nd revalidation in such exceptional circumstances & the beneficial provisions need to be implemented in the best interest of the exporters & not denied.
The PRC indulges in a single line conclusive order absolutely despised by the Apex Court. The PRC ignores the fact completely, the documentary evidence placed on record that the AA holder entered into a contract & the foreign supplier reneged the contract partially. As explained already, the AA holder cannot be held responsible for it. Thereafter, the AA holder is compelled to enter into a contract for supply of Iodine at substantially higher price therefore the AA holder is a victim & compelled to pay the high price. The AA holder took immediate steps to remedy the situation created by the reneged contract & signed a contract for supply of Iodine at substantially higher price immediately. There was no other remedy possible. How can then the PRC conclude that the AA holder is playing with the market situation. As a matter of fact, the documentary evidence establish beyond any element of doubt that the exporter did his best to secure the Iodine supply in the International market but failed to receive the same within the extended validity due to the reneging of the contract by the foreign supplier, which is beyond the control of the AA holder. The PRC needs to comprehend that no exporter is foolish enough to play with the market situation but the AA holders do their level best to secure the supplies & complete that as soon as possible & this is evident beyond doubt in this case.
Further by way of the citation Asstt. Commr., Commercial Tax Department versus Shukla Brothers, 2011 9220 S.T.R. 105 (S.C.) it was pointed out that it is important that the PRC should not indulge into contempt of the Supreme Court but cure the defect.
Despite all of the above being brought to the attention of the PRC, it appears that the members are complete insensate & oblivious not only about the difficulty of the exporters but also care the least about issuing a reasoned order. They merrily indulge into contempt of the Supreme Court & establish that they are beyond the Supreme Court. The PRC simply concludes that the firm has not taken due diligence in making imports within extended period & committee finds no ground of hardship. Is this simply not idiotic conclusion & abuse of the official position without assigning any reason? Why should the PRC behave in such a high handed manner? Why should the PRC kill the exporters instead of helping the exporters in difficult circumstances?
If the PRC, the highest body in the Export Promotion Authority works in this fashion then can there be any sustainable growth in exports possible? The simple point is that the Export Promotion Policy cannot be for showcasing but the Minister should be able to implement the same in true letter & spirit for the benefit of exporters.