LoC traders to deposits 5 lacs as security
HC quashes Govt order pertaining to traders
24/04/2018
Jammu, Apr 23: In a petititon filed by Akshay Trader Poonch & Ors seek quashment of order bearing No. 121-IND of 2017, dated 31.05.2017 and impugned circular bearing No. TFC/CDB/P /Trade/595-600, dated 9.6.2017 to the extent it requires the existing registered Traders to deposit Rs.5.00 Lac in the form of fixed deposit/guarantee. The petitioners also seek direction to the respondents to allow the petitioners to undertake the trading activity across LOC.
Justice Alok Aradhe of J&K High Court Jammu Wing after hearing Adv Abhinav Sharma with Adv SR Rather whereas Govt Advocate Sudesh Magotra for the state ordered that clause A(d) of Government order dated 31.05.2017, in so far as, it pertains to the traders who are already registered with the Custodian, which provides for furnishing of security deposit of Rs. 5.00 Lac in the form of fixed deposit/bank guarantee as well as consequent circular dated 09.06.2017 issued by Custodian, TFC, Chakan-da-Bagh, Poonch to the extent of furnishing of bank guarantee from the already registered traders, qua the petitioners, is hereby quashed. Needless to state that the petitioners shall comply with regard to all the remaining modalities/formalities prescribed in the Govern ment order dated, Court observed.
Justice Alok Aradhe while quashing the order, observed that it is well settled legal position, facts of the case may be examined. In the instant case, the Government order dated 31.05.2017 provides for compulsory production of documents like Permanent Residence Certificate, Personal Account Number, Trade Identification Number and antecedent verification of the traders in order to strengthen the mechanism and to obviate the possibility of distorting the trade process. The traders are also required to furnish address proof of residence as well as business establishment, bank statements, audited accounts of LoC business and proof of business establishments. In order to check the under valuation of goods, suitable mechanism is proposed to be worked out in consultation with the State Government. However, it is pertinent to mention here that in the entire objections in paragraph 8, the object of furnishing security/ bank guarantee by the traders existing in cross LoC trade is stated to take a financial commitment from them given the volume of Cross LoC trade. From perusal of the Government order it is evident that various safeguards have been incorporated in the order in order to prevent any mal-practice. However, there appears to be no rational behind the object of demanding the security deposit of Rs.5.00 Lac from the existing registered traders with the custodian, as the existing traders are already carrying on cross-LoC business. Thus, they have shown their financial commitment to carry on the cross-LoC business. Therefore, the justification offered that demand for furnishing the security/bank guarantee from the existing traders registered with the custodian to ascertain their financial commitment, as no logical basis and is, therefore, arbitrary and irrational. No logical explanation has been put forth on behalf of respondents for incorporating such a requirement in respect of traders who are registered with the Custodian and are carrying on the trade for the past several years. The aforesaid requirement is based on amendment in the policy and in amendment in the policy by the State Government until and unless expressly provided therein cannot have retrospective effect and has to be prospective in nature. Thus, no cogent reasons have been assigned by the respondents for demanding Rs.5.00 Lac by way of fixed deposit/ bank guarantee from the existing traders.
The existing traders have already been subjected to sufficient security measures to ensure that they do not indulge in any sort of malpractice. In the absence of any justification or cogent explanation in this regard, the requirement of furnishing the security deposit of Rs. 5.00 Lac in the form of fixed deposit/ bank guarantee cannot but to be held to be arbitrary or irrational.JNF
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