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In a major setback for the government, the Delhi High Court on Thursday ordered all major departments and ministries of trade and commerce topresent files pertaining to the process of decision making which allowed ahandful of private star trading houses to import gold.
Hearing the case filed by Delhi Bullion and Jewellers Welfare Association (DBJWA), justice Vibhu Bakhru ordered defendants including Ministryof Finance, Ministry of Commerce, Directorate General of Foreign Trade andothers to file its reply with issues that prompted them to allow a handful ofstart trading houses to import gold into India.
The court also ordered respondents to present all files pertaining tothe decision making in six weeks.
The next hearing is scheduled on September23. Raising doubts over taking such decision in a hurry without addressingwider concerns - the current account deficit (CAD) - of the country, DBJWA hadfiled a writ petition in the Delhi High Court questioning the government'sintention for such decision.
DBJWA alleged that allowing a handful of startrading houses will benefit some jewellers while others will be debarred fromavailing gold.
"Unusual to the common practice, the government did not file itswritten reply in the court which the court had ordered to do by today.
Now, thecourt ordered to file its reply before September 23, the next scheduled date ofhearing," said DBJWA counsel Rahul Gupta.In order to restrict gold import to contain the CAD under control, thegovernment last year raised import duty to 10%.
Also, star tradinghouses were restricted from gold import, in addition to allow 20% ofimported gold to supply mandatorily to jewellery exporters.
But, immediately after the Bharatiya Janta party led NationalDemocratic Alliance (NDA) got majority in the Parliamentary election, the United Progressive Alliance (UPA) government on May 21 allowed certain startrading houses to import gold despite Narendra Modi led government was set toassume the office on May 24.
The decision was prompted with vested interest,alleged DBJWA president Vimal Kumar Goyal.
"How can the government benefit only a handful of jewellers once theentire country is facing gold supply squeeze? The government's decision wasneither in national interest nor in public at large," Goyal added.
The respondents include Union of India, the Election Commission,Ministry of Finance, Ministry of Commerce and the Directorate General of Foreign Trade (DGFT) to name a few.
"Instead of taking the decision in a hurry, the government should havewaited for a few days," said the writ petition.
