D.P. Wadhwa, J.
(1) The petitioners who are two in number have challenged by this petition the validity of para 7 of the Export Entitlement Distribution Policy ('Policy 'for short) relating to export of certain categories of readymade garments for the year 1988, 1989 and 1990 issued by public Notice No. 28 ETC(PN)/87 dated 15th October, 1987 and effective from 1st January, 1988.
(2) The first petitioner is an association of garment exporters and the second petitioner is himself an exporter of garments. The respondents are the Union of India both through the Ministry of Commerce and Ministry of Textiles, Chief Controller of Imports and Exports and the Apparel Export Promotion Council (for short 'the AEPC').
(3) Export of garments is regulated under the Import and Exports Control Act, 1947 and Export (Control) Order, 1977 issued under this Act. An Import (Control) Order, 1955 has also been issued under the Act. The import/Export Policy is announced by the Government of India by means of public notices in the Gazette of India (Extraordinary). The primary object of Export Policy is to promote export to the maximum extent but in such a manner that the economy of the country is not affected by unregulated exports of items essentially needed within the country. Export Control is, thereforee, exercised with respect to a limited, number of items whose supply position demands that their exports should be regulated in the larger interest of the country. The object is also to ensure the maximum benefit by way of the highest foreign exchange realisation made by the country.
(4) Aepc is a company registered under the Companies Act. Its objects include, inter alia. the registration and distribution of quotas for the export of garments to foreign countries with the approval of the Ministry of Commerce and in accordance with the policy laid by the Government of India. Aepc has been organized with sponsorship of the Ministry of Commerce in the Government of India.
(5) license under the Act means a license granted and includes customs clearance permit issued, under any Control Order. Under Section 4-A, the Central Government may, by order levy, subject to such exceptions, if any, in respect of a.ny person or class of persons as may be specified in the order, any fee in respect of any application or in respect of any license granted or renewed under any order made or deemed to have been made under the Act. Imports (Control) Order, 1955 has been issued in the exercise of powers conferred by Sections' 3 and 4-A of the Act. Export (Control) Order. 1988 has, however, been issued in the exercise of powers conferred only by Section 3 of the Act. Under the Export Order license means' an export license granted under that Order and 'licensing authority' means an authority competent to grant license under the Order. Aepc is not such authority. Clause 3 or the Export Order is as under :-
'3.Restriction on export of certain goods:- (1)Save as otherwise provided in this Order, no person shall export any goods of the description specified in Schedule I, except under and in accordance with a license granted by the Central Government or by an officer specified in Schedule IT. (2) Not withstanding anything contained in sub-clause (1) goods specified in Schedule Iii may be exported on fulfillment of the terms and conditions specified therein. (3) If in any case, it is found that the value, sort. specification, quality and description of the goods to be exported arc not in conformity with the declaration of the exporter in those respects or the quality and specification of such goods are not in accordance with the terms of the export contract, the export of such goods shall be deemed to be prohibited.'
While the Imports Order by Clause-4 prescribes for fees on application of license, there is no such clause in the Exports Order. Now, if reference is made to Schedule Iii (OGL- No. 3), as mentioned in Clause-3 of the Exports Order under which any person may export specified goods to any country (except to a country to which export is prohibited) on fulfillment of the conditions stipulated in Col. No. 4. it may be noticed that export to Eec Member-States of Textiles and Textiles products is given in Item-55 and the relevant portion may be re-produced as under -
S 11. Item S. No. Condition (s) to be fulfillled No. as in Part documents to be produced Bof Schedule-1 1 2 3 4 55. Export to Eec Member- B.70(v) (i) Against allocation of States of Textiles and export entitlement by Textiles products made (a) ...................... from cotton, wool and (b) The Apparels Export man-made fibres Promotion Council for (excluding jute, silk and garments and knitwear flax) under the Indo- (excluding woollen knit- Eec Textile Agreement. wear) (c) ..............:...... Necessary certification on shipping bills will, how- ever, be made by the Cotton Textiles Export Promotion Council for all fabric and made-ups (including wools fabrics and made-ups) and in respect of all garments and knitwear (including woollen garments and knitwear) such certification will be made by Apparels Export Promotion Council 1 2 3 4 (ii) In the matter of allocation of export entitlement, the Export Promotion Councils will observe the guidelines issued by the Ministry of Commerce and will make efforts to ensure reasonable realisation through floor price mechanism. (iii) . ................. .. (iv)
Export of these items to Usa, Austria, Sweden. Finland, Canada and Norway are respectively mentioned in Items 56, 57, 58, 59, 60, 61 and 63(c) of Schedule-in. Items 62(a) and 62(b) pertain to export of these items to countries where there is no bilateral agreement between India and those countries.
(6) It is stated that world trade in textile and clothing is regulated under the Multi Fibre arrangement, a General. Agreement on Tariffs and Trade (GATT) instrument, laying certain parameters of trade in textile products of cotton, wool, man-made fibres and blends thereof. This arrangement first came into existence in 1974 and is being extended from time to time. A protocol extending this agreement for a fourth term of five years (August 1986 to July 1991) is presently in force. Under this arrangement India has negotiated bilateral textile agreements with EEC. Canada, Usa and other countries. Under this agreement export of certain categories of textiles and clothing are subject to quantitative restrictions. These quotas are being regulated by Export Entitlement Distribution Policy announced every year by the Government of India. Present policy is, however, for a period of three years starting from 1st January. 1988. Earlier to coming into force of the present policy out of total quota available to the country for export of garments, twenty five per cent was distributed by way of quotas to exporters on first-come-first-served (FCFS) basis to service small orders and as the expression says this quota was to be given on Fcfs basis. In respect of applications received on the same day priority was to be given for those applications in which the sale realisation was the highest. It is stated that this was obviously to ensure that the country obtained the maximum possible benefit in earning foreign exchange from the export of garments. Also under the earlier policies apart from charging a nominal service fee no other charge was levied en the exporters of the garments. In the present policy, however, certain items of garments have been carved out and have been identified as super fast category. A category is super fast if exports were consistently ninety one per cent or more of the level earmarked during three years preceding the last year. Fifteen per cent of the super fast categories, which works out to roughly five per cent of the total garment exports have been brought, under the new system called the Open Tender System (OTS). The remaining eighty-five per cent of the super fast categories ore allocated to other systems. It may. however, be noted that out of one hundred twenty three products, twenty-eight items have been identified as super fast items. The challenge is limited to the Ots and the policy thereto is contained in para-7 of the policy for 1988-1990. It will be appropriate to set out para-7 of the policy :---
'7.Open Tender System to; Super fast Categories:
(I)Under this system quantities wilt be allotted on the basis of sealed tenders. Exporters will have to submit sealed tenders indicating the premium offered to the Government on the quantities applied for Applications will have to be made within the quantitative ceiling to be announced by the Textile Commissioner.
(II)Allotments will be determined on the basis of the premium offered and on a day when the available quantities are over-subscribed the eligibility will be decided on the basis of higher premium bid.
(III)Exporters would be required to export the goods on a minimum export price which would be the upset price plus the premium paid by the Exporters. The upset price will be determined by the Textile Commissioner on the basis of the average unit value realisation in these categories during the previous year.
(IV)Allotment under this system will be subject to the following conditions :
(A)Exporters should have been registered with the Aepc (or W&WEPC; for Woollen knitwear).
(B)Only one application will be admissible from an exporter for one country/category for one day. However, mow than one application can be made provided the total quantity covered by such applications is within the stipulated quantitative ceiling, fixed by the Textile Commissioner.
(C)Allotments under this system will be valid for a period of 60 days. In the second period allotment will be valid for 60 days or up to 31 st December of the relevant year. whichever is earlier.
(D)Applications turn allotments should, be accompanied by Demand raft for the total premium amount payable to the Apparel Export Promotion Council.
(E)All registered exporters irrespective of their other entitlements under any other system arc eligible to apply for the bid.'
(7) In para 6 of the petition three striking features of Ots have been pointed out and these are :-
'(A)for the benefit of allocation of a quota an exporter has to submit a tender offering a premium to the Government, which premium has to be paid by the foreign buyers through the exporter; (b) the tenders are to be disposed of not on the basis of total sale realisation but on the basis of the highest premium offered For example, a exporter selling a particular goods for say $ 100 and. offering a premium of $ 25 would be awarded the quota rather than an exporter who is selling the same garments for $ 200 but offering a premium of only $ 1. (c) The condition regarding premium is not germane and extraneous to the true aim and object of the export promotion and militates against the basic objective viz. acquisition of maximum foreign exchange.'
(8) Petitioners further say that allocation of quota under Ots is patently illegal and arbitrary and that the government has no power under the Act or under any other provision to impose a premium of this sort which really amounts to tax on export and that, in fact, this system totally defeats the purpose of the Act, Export Order as well as Policy, in that the interests of the exporters are sacrificed and so also the interest of the country in earning foreign exchange and all this only to favor the government by paying premium. The petitioners have pointed out various anomalies in the Policy. They stated that earlier the quota's were divided into five categories, : (1) past performance quota.; (2) first come first serve squall orders quota; (3) manufacturers' quota; (4) Central/State Government Corporation's quota; and (5) Non-quota exporters. As noted above, present petition relates to modification made in the system of Fcfs to CTS. Fcfs small orders quota was basically evolved to enable small exporters to export their goods and thereby develop both themselves as exporter as well as the export market and that this system had been prevalent over the years. It is submitted that the ostensible object of Ots which is to provide opportunities to new exporters including small scale entrepreneurs cannot be achieved. Now, under Ots exporters will have to submit sealed tenders indicating the premium offered to the government on the quantities applied for; the only condition for eligibility being that the export price should not be less than the upset price as determined by the Textile Commmissioner. Thus, allotments will be made on the basis of highest premiums offered on a day and not on the highest price realisations. The petitioners submit that the Ots Policy is not consistent with the Act and the Order. Government has no power to realise premium on the export of goods and that such an imposition interferes with the right of the petitioners guaranteed under Article 19(1)(g) of the Constitution. Petitioners further submit that the Ots Policy is neither reasonable nor in public interest and that it is ultra virus of Articles 14 and 265 of the Constitution as well.
(9) Respondent Aepc filed only one page counter-affidavit and submitted that it was only an implementing authority. It was sponsored by the Ministry of Commerce, Government of India and in accordance with the law it was to implement the Policy as and when framed by the Central Government regarding export of readymade garments. It was stated that under the Policy applications were received under Ots and allocation of quota in consequence thereof had already been settled and issued and that there were a large number of exporters who had made tenders under this system. Aepc has nothing further to say in its counter-affidavit except to raise an abjection to the maintainability of the petition, but without giving any particulars as to why it is dated that the petition was not maintainable.
(10) COUNTER-AFFIDAVIT on behalf of other respondents was filed by Mr. R. Poornalingam, Director, Ministry of Textiles, Government of India, New Delhi. These respondents denied generally the averments made in the petition. It was stated that Ots for super fast category was open to all exporters and that earlier new exporters including small scale entrepreneurs were being denied opportunity. The new policy was made to help small entrepreneurs and to remove mal-practices by a few monopolists in the trade. It was stated that Ots was introduced only on experimental basis and that the entire amount of premium collected would be funded into export promotion fund and used for export promotion purposes. It was stated that the premium charged was neither cess nor a tax and that it was a 'sort of license fee' to be offered by the exporters to compete with each other for procuring the export quota which meant the more the premium more the foreign exchange earned for the country as well as more the amount realised for regulation and promotion of export trade in garments. The respondents denied that the government had no power under the Act or under any other provision to impose a premium of the sort. It was submitted that be government did not fix any amount of premium to be paid compulsorily and that the amount is to be decided and offered by the competing individual exporter voluntarily and that the amount so collected would be used for export promotion activities particularly for the purpose of diversifying exports of slow moving items and to non-conventional markets etc. The provision of law under which the government could collect premium was nowhere specifically mentioned in the counter affidavit.
(11) The petitioners contend that since the export of garments is under Ogl and no license is required. The role of the Central Government is only to over see and regulate the export in terms of bilateral agreements entered with various countries. They, thereforee. say that charging of premium by the government on quota fixation is illegal and is not backed by any authority of law and further that it is vocative of Article 19(1)(g) of the Constitution. They say that the Act and the Export Order do not authorise any such charging of premium which is nothing but a tax and is also not a fee. They say that distribution of quota right for export was not dispensation of any privilege or right by the government.. Its function was merely regulatory or administrative in nature for the fair and equitable distribution of quota so that everybody benefits and there is maximum export realisation. but in that process the government cannot enrich itself at the cost of the exporters. Government has fixed upset price (or floor price as it is also called) and garments cannot be exported for a price less than the upset price. But, then by charging premium the minimum price for which garments could be exported would not be the upset price and to this will have to be added the premium charged by the government. The premium could well be the profits of the exporters and would legitimately be due to them. By charging premium the government was taxing the exporters without there being any authority of law. Mr. Harish Salve, learned counsel for the petitioners, said that in fact. premium was a compulsory exaction. He reduced the claim of the respondents that it was a voluntary payment. He said in order to exercise his right to export he must apply for quota and then he had no option but to pay the premium which was nothing but a trading tax. Ho said the premium charged could not be justified as it was not being charged generally and there was no fixed/settled amount of fee/premium to be charged. Who-so-ever offered more to the government could get the quota. Mr. Salve said that it was an impost and the element of quid pro quo was missing there being no service rendered or benefit conferred either generally or to the particular class of persons .paying premium. Mr. Salve asserted that. the impost was an unreasonable restriction on his right to carry on trade and it infringed the fundamental right of We petitioners guaranteed under Article 19(l)(g) of the Constitution.
(12) Mr. B. Dutta, learned Additional Solicitor General, appearing for the respondents, submitted that the impost was in the nature of service charge. He said the government had collected over Rs. 20 crores by way of premium and out of that Rs. 18 crores had already been spent in floating new schemes of exports. He said that though there was no express power either in the Act or the export Order or even under the scheme itself to charge premium, it could be levied under the powers of the government to control and regulate trade of export of garments. Mr. Dutta said that premium was not a tax and it was in the nature of fee for giving secured and ensured lights to the exporters to do export of a particular commodity on the basis of quota granted fay the government. He said this power to charge premium flowed from Section 3 of fie Act and Clauses 3 and 3(3) of the Exports Order. To sustain the legality of the impost he relied on Article 73 of the Constitution with reference to entries 41 and 96 of paid of VIIth Schedule to the Constitution.
(13) MR.G.L.RAWAL learned counsel appearing for AEPC. supported Mr. Dutta in his submissions He said requirement of grant, of quota was a condition of Ogl and under the provisions of the Act and the Exports Order government could levy premium to grant quota rights.
(14) In the present case we are relieved of the necessity of finding out whether the impost in question is a tax livable by the State, since such a claim was not made before us. The only question which remains to he considered is whether the import levied under the policy' is of the nature of a fee (or 'sort of a fee' as respondents put it) levied or livable on the export of garments of super fast category (OTS). The distinction between a tax and the fee is now well recognised.
(15) The policy, as noted above, containing the scheme in question is with respect to certain percentage (15 per cent) of export of super fast category of readymade garments to USA. Eec Member State, Austria, Finland, Sweden, Norway and Canada for the period 1-1-88 to 31-12-90 and this percentage works out to be roughly 5 per cent of the total exports. The policy states that the scheme (OTS) envisages opportunities to new exporters including small scale entrepreneurs and was being introduced on an experimental basis. An intending exporter, in his application, which is in the form prescribed and is to be submitted to Aepc is to give various particulars. He has to indicate the upset price which is for the purpose of reference only and the premium amount offered by him. He is required to submit following documents with his application form; (1) Demand draft for 50 per cent of the premium amount: (2) Aepg charges at specified rates by check/demand draft: (3) Earnest Money Deposit amount by demand draft/bank guarantee determined on the basis of the upset price. The policy, however, does not indicate as to how the premium realised is to be utilised, though it is realised by the AEPC. In the counter affidavit, however, the respondents have stated that the premium collected through the Ots would be funded into an Export Promotion Fund and used for export promotion purposes. This was also indicated in a press note issued subsenuently. This press note (Annexure-R1 to the counter-affidavit) list the following three main objectives of the Quota Distribution Policy:-- (a) Maximum utilisation of the annual restraint levels. (b) Higher realisation of foreign exchange by increasing unit value realisation, and (c) Orderly development of export trade. An exporter under Ots is to pay the service charge to Aepc and also the premium amount. This type of service charge was held as valid by the Supreme Court in the case relating to Minerals and Metals Trading Corporation (MMTC) v. Union of India : 1973ECR23(SC) In this case the Mmtc under a certain scheme was to canalise the expert of MICA. During the course of arguments another press note of the Ministry of Textile was brought to our notice. In this it was stated that schemes for a total value of about Rs. 17.8 crores had been drawn up cut of the premium amount of over Rs. 20 crores realised during 1988. These schemes included over-seas publicity, air freight subsidy, sample subsidy, action plan for Japan and Austria and survey of readymade garments. For these schemes various amounts were placed at the disposal of Aepc and the Textile Commissioner or the Textile Committee.
(16) On the question of authority to charge premium and if was a fee whether was whether it was justified and met the test of a fee Mr.Salve referred to various decisions of the Supreme Court, note abley being Mohd. Yasin v. Town Area Committee Jalalabad : [1952]1SCR572 (2). State of Kerala v. P. J. Joseph : AIR1958SC296 (3). S.T. Swamiar v. Commr. HR&CE; : AIR1963SC966 . State of Madhya Pradesh v. Thakur Bharat Singh (AIR 1967 Sc 1170)(5).Bennett Coleman and Co. Ltd. v. Union of India : [1973]2SCR757 . The Municipal Council Madurai v. B. Narayanan etc. : [1976]1SCR333 . Kewal Krishan v. State of Punjab : [1979]3SCR1217 (8), Southern Pharmaceutical & Chemicals v. State of Kerala : [1982]1SCR519 Delhi Municipal Corporation v. Mohd Yasin : [1983]142ITR737(SC) , Om Parkash Agarwal etc. v. girl Rai Kishori and ors. : [1987]164ITR376(SC) , and District Council of Jowai Autonomous Distt. Jowai & Ors. v. Dwet Singh Rvmbai etc. : [1987]169ITR468(SC) (12). Mr. Dutta in support of his submissions referred to another decision of the Supreme Court in The City Corporation of Calicut v. Thachambalath Sadasivan and Ors. : [1985]2SCR1008 (13).
(17) We think it is unnecessary for us to discuss ratio of each of these cases in detail. In our view however, on the exammation of these decisions and the arguments addressed before us the following broad principles emerge :- 1. Generally speaking the element of quid pro quosticto senso is always a sine quo-non of a fee. But this principle has now been quite softened. A fee is charged for the privilege or benefit conferred of service rendered or to meet the expenses connected therewith. But it is further neither necessary nor expedient to weigh too meticulously the cost of the service rendered etc. against the amount of fee collected so as to evenly balance the two. A broad co-relation is all that is necessary. 2. Payment of fee is normally voluntary, Compulsion is not a hall-mark of a fee. But levy in the nature of a fee does not cease to be of that character merely because there is an clement of compulsion or coerciveness, 3. A levy does not postulate that to be a fee. it must have direct relation to the actual services rendered by the authority to each individual who obtains the benefit of the service. Merely because others besides those who pay the fee are also benefited doss not detract from the character of the fee. Some time even it has been observed that the special benefit or advantage to the payers of the fee may even be secondary as compared with the primary motive of regulation in the public interest. 4. Money collected by fee need not go into a separate fund and merely because it also goes into the consolidated fund does not necessarily make a levy a tax. It is also of no consequence that the State may ultimately and indirectly be benefited by it. 5. Ordinarily a fee is uniform and does not depend on the varying ability of different recepients of benefits. But, absence of uniformity is also not a criterion. A fee being a levy in consideration of rendering service of a particular type co-relation between the expenditure incurred by the government and the levy must undoubtedly exist, though such a relationship need not be direct and a mere casual relation may be enough. 6. A license fee on a business not only takes away the property of the licenses but also operates as a restriction on his right to carry on his business, for without payment of such fee the business cannot be carried on at all. If the license fee cannot be justified on the basis of any valid law no question of its reasonableness can arise, for an illegal impost must at all times be an unreasonable restriction, and will necessarily infringe the right of the citizen to carry on his occupation, trade or business under Article 19(1)(g). Thus an impost not authorised by law cannot possibly be regarded as a reasonable restriction and thereforee always infringes the right of a citizen which is guaranteed under Article 19(1)(g). 7. An order which would be valid under any provision of law cannot be sustained on the ground it being an executive action. An executive action which operates to the prejudice of any person must have the authority of law to support it. Thus every act done by the government or by its officers must. if it is to operate to the prejudice of any person, be supported by some legislative authority. As a corollary an executive action which was not supported by any legislation can be upheld provided it does not operate to the prejudice of any citizen. Article 162 and Article 73 are concerned primarily with the distribution of executive power between the Union on the one hand and the States on the other and not with the validity of its exercise.
(18) While, on the principles we may, however note that the Constitution Bench in Kewal Krishan case (supra) observed that generally speaking a fee is to be defined a charge for special service rendered by some governmental agency. It is axiomatic that the special service rendered must be to the payer of the fee. The element of quid pro quo must be established between the payer of the fee and (he authority charging it. It may not be the exact equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the. authority collecting the fee must show that the service which, they are rendering in lieu of fee is for some special benefit of the payer of the fee. It may be so intimately connected or interwoven with the service rendered to others that it may not be possible to do a complete dichotomy and analysis as to what amount of special services was rendered to the payer of the fee and what proportion went to others. But generally and broadly speaking it must be shown with some amount of certainty, reasonableness' or preponderance of probability that quite a substantial portion of the amount of fee realised is spent for the special benefit of its payers.
(19) The net result is that in the present case it appears to us that the authority, to justify the levy qua fee. must render some special service to the category from whom the amount is exacted and the total sum so collected must have a reasonable co-relation to the cost of said services. Where dual basic features are absent the authority cannot legally claim from the licenses under the label fee.
(20) We do not find the premium in the present case to be of the voluntary nature. It is a compulsory exaction and is more in the nature of a tax which is not authorised. Element of quid pro quo is totally absent. There is no co-relation whatsoever between the fee charged by way of premium and the services rendered. The premium is not authorised by the Act and the Exports Order. It is not uniform. It depends upon the capacity of the person to pay and has to pay the maximum in order to be entitled to the quota. The schemes which the State proposes to take up after having collected the premium and which were mentioned during the course of arguments do not justify the impost and it does appear to us that these schemes have been thought of only now in order to justify the levy which is not legal. The impost in question will also appear rather against the export polity The policy by which levy is imposed would not bring in higher foreign exchange for the country but it would only bring higher amount to the government by charging maximum premium in terms of rupees. Earlier Aepc was itself highly critical of the Ots and questioned the wisdom of the government in having introduced the policy. It was pointed out that this policy was likely to bring in more malpractices then to curb them. Since, we have taken the view that the impost in question is illegal, we do not want to go into the merits and demerits of the OTS. We may, however, note that the respondents had no comments to offer to the averments made in para 6 of the petition- which we have reproduced above.
(21) The petitioners have a right to export the garments under Ogl subject only to the condition of grant of allocation of export entitlement by Aepc as per the guidelines issued by the government and at the same time Aepc is also to make efforts to ensure reasonable realisation of foreign exchange through floor price mechanism. Now, the policy or the guidelines cannot be contrary or inconsistent with the 4ct or the Exports Order. : Under the Ots the government is, in effect, auctioning quota and collecting premium which right it does not have under the Act or the Exports Order. Use of the expression 'a sort of fee' is a misnomer and does not justify the impost in question. Admittedly an amount of over Rs. 20 crores has been realised for two periods of the year 1988. As noted above the policy itself does not talk of a^ to how this amount is to be utilised.
(22) The levy of premium is clearly outside the Act and the Export Order and is not authorised. Export Order unlike Import Order has not been issued under Section 3 read with Section 4A of the Act. license under the Export' Order means an export license granted under the Order. Tins definition of license is different than that contained in the Export Order of 1977 where a Quota for the export of goods allocated under the Order was also included within the meaning of license, but the allocation was to be made by a licensing authority or by any agency authorised by the licensing authority in that behalf. Aepc could not be said to be a licensing authority or agency authorised by the licensing authority under the Export Order of 1977. Export license is required only in respect of the goods specified m Schedule-1 to the Order. No such export license is required for the goods specified in Schedule-111 (OGL) and the goods specified' therein could be exported on fulfillment of the terms and conditions specified therein. In the matter of allocation of export entitlement. Aepc is to observe the guidelines issued by the Ministry of Commerce. Tn the garb of issue of guidelines the Central government could not impose levy in The shape of premium. Charging of premium based on the capacity of an exporter to pay is also contrary to the obligation of Aepc which is duty bound to realise maximum foreign exchange under the terms of OGL. To illustrate, an exporter under Ots, who offers maximum premium to the government in terms of rupees may realise ultimately less forei'j,n exchange by exporting his goods at a price at the level of the upset price / floor price than the exporter who offers less premium but exports at a price higher than the upset/floor price.
(23) In this case the premium charged / collected cannot be the price of any privilege which stay can be said to have parted in favor of the exporters. The charging of premium in the instant case cannot be supported on any principle.If we examine the scheme of levy of fee (premium) even cursorily we find there is no co-relation whatsoever between the services and the levy which has no limit of excessiveness. It is not a fee in reality. The levy cannot also he justified on the ground as to how the amount collected would be utilised as we were told during the course of arguments, there being too much generalisation and no specifics. It is difficult to be how a new exporter who pays premium under Ots would at all. be benefited, even indirectly, by giving air freight subsidy to the exporters of other items to Latin American countries etc. The press note which was produced before us. showing measures to be taken by the government to boost the export of textiles after collecting premium under Ots is undated. It does not advance the case of the respondents. Charging of premium is not a fee and there is no authority of law to support such a charge. It clearly infringes fundamental right of the petitioners guaranteed under Article 19(1)(g) of the Constitution and has to be struck down.
(24) Mr. S. K. Kaul, appearing for the petitioners in Cw 3503187 confines his attack to the validity of Ots only. He submitted that Government of India was merely a distributing agency of quota under bilateral agreements entered with various countries and its charging of premium may perhaps even infringe those agreements and may he even against the principles of Public International Law Because, of the view which we have taken with respect to charging of premium we. however, need not go into the question raised by Mr. Kaul.
(25) NOW. changing of premium is so metrically linked with other condition given in Clauses (i), (ii) and (iii) of para 7 of Public Notice No. 28-FTC(PN)/87 issued by the Government of India, Ministry or Commerce and dated, 15th October, 1987 that whole of these clauses have to be struck down. We so order.
(26) Accordingly, writ petition is allowed and the rule is made absolute. Petitioners will be entitled to costs. Counsel's fee Rs. 1000'-.
D.P. Wadhwa, J.
(27) In view of the orders made in C.W 3431187, Clauses (i). (ii) and (iii) of para 7 of Public Notice No. 28-ETC(PN)[87 dated 15th October, 1987 issued by the Government of India. Ministry of Commerce arc struck down and the rule is made absolute to that extent. The petition is allowed with costs. Counsel's fee Rs 1,000.