S. RAJENDRA BABU, J. ( 1 ) THE petitioners in these cases, who are manufacturers and exporters of goods, are entitled to Import Replenishment Licence (hereinafter referred to as 'rep Licence') under the Import-Export Regulations framed under the Imports and Exports Control Act, 1947, which facilitates import of goods that are necessary for and go into the manufacture of items which are exported. ( 2 ) APPLICATIONS for issue of REP licence are made by manufacturers/exportersunder certain schemes pursuant to procedures laid down thereunder and issued by the Controller of Imports and Exports, depending on the export performance of the manufacturer/importer. The REP licence so issued can be used by the manufacturers or importers to import goods to replenish materials used in production of goods which were exported or for further production of goods which are to be exported, or that such licences can be freely transferred or disposed off to any person and permission or licence of the licensing authority is not required. The conditions subject to which the REP licences were issued are binding on the purchasers of such licences from the manufacturers or importers and he will be entitled to import and clearance of the goods covered by such licences under the policy in question on production by the transferee of only the document of transfer of licence concerned in his name. Whenever a REP licence is transferred, the transferor is required to give a formal letter to the transferee. The relevant allegations in this regard are as set out in paras 1, 4 and 5 and for purposes of convenience are reproduced hereunder:"1. The petitioners are dealers registered under the provisions of the karnataka Sales Tax Act, 1957. The first petitioner is a manufacturer of ready-made textile garments and the said petitioner exports the ready-made textile garments to various countries. The second petitioner is a manufacturer of ready-made leather garments and the said petitioner exports the ready-made leather garments also to various countries. The petitioners earn substantial foreign exchange to the country and being exporters, the petitioners are entitled to Import Replenishment licences under the Import-Export Regulations of the government of India to facilitate import of goods which are necessary for and go into the manufacture of items which are exported. 4. The petitioners earn substantial foreign exchange to the country and being exporters, the petitioners are entitled to Import Replenishment licences under the Import-Export Regulations of the government of India to facilitate import of goods which are necessary for and go into the manufacture of items which are exported. 4. REP licences issued in terms of the scheme envisaged under Chapter XV of the Import-Export Regulations/policy administered by the Chief Controller of Imports and Exports. The object of the scheme is to provide Registered exporters by way of Import Replenishment, essential inputs required in the manufacture of the products exported and to allow certain flexibility to enable diversification of the export products. 5. Applications for issue of REP licences are made by manufacturers/exporters under the scheme as per the procedures laid down thereunder and are issued by the Controller of Imports and Exports based on the export performance of the manufacturer/importer. The REP licences so issued can be used by the manufacturer/importer to import goods to replenish materials used in production of goods which were exported or for further production of goods which are to be exported or such licences can be freely transferred/disposed off to any person, and permission or endorsement of the licensing authority is not required. The licence issued to the manufacturer/importer are subject to certain terms and conditions, which are also binding on the purchaser of the REP licence from the manufacturer/importer and the purchaser of the REP licence can import any of the items mentioned in the annexure to the REP licence which the manufacturer/importer is entitled to import and clearance of the goods covered by a REP licence under this policy will be allowed by the Customs Authorities on production by the transferee of only the document of transfer of licence concerned in his name. Whenever a REP licence is transferred, the transferor is required to give a formal letter to the transferee, giving full particulars regarding number, date and value of the licence transferred and the name and address of the transferee and complete description of the import items, for which the licence is granted. " and they set out the legal position in regard thereto. " and they set out the legal position in regard thereto. ( 3 ) IN respect of such transferred licences, the 1st respondent has issued a circularon 30-1-1990 stating that whenever import licence is transferred the same would attract tax under Section 5 (1) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as 'the Act') as unclassified goods at the rate of 7% and directed the assessing authorities and the revisional authorities to assess tax accordingly. The validity of this circular is challenged in these petitions. ( 4 ) THE petitioners contend that the REP licences issued to the petitioners arebased on their export performance and foreign exchange realisation and is an entitlement in the nature of a grant which confers on the petitioners the right to import goods and is therefore an actionable claim falling within the definition of Section 3 of the Transfer of Property Act and consequently does not tall within the definition of goods defined under the Act. Elaborating further, it is submitted that the REP licence being only a claim to a beneficial interest in a movable property, was an actionable claim and that therefore excluded the price realised on sale of the same while computing tax under the Act. It is further contended that the basis upon which the respondents want to treat such import licences as goods is the decision of the supreme Court in H. Anraj v Government of Tamil Nadu, (1986)61 STC 165; even if the import licences can be treated as movable property they are not goods in a commercial sense; the Accountants have never treated the same as goods; in the case of lottery tickets dealt with by the Supreme Court in Anraj's case, the same were considered to be goods for the reason that there were two consequences flowing from the purchase of a lottery ticket; firstly, it entitles a person to participate in the draw of a lottery and secondly it provides a chance of getting a price on the draw of the lottery. While the latter part may be considered in the nature of only an actionable claim, the former part was held to be in the nature of a right in goods and transfer of such a right was held to be sale for the purpose of Tamil Nadu Sales Tax Act; but, such a contingency does not arise in the present cases is the point canvassed by the petitioners. ( 5 ) CONSIDERING the nature of the contentions advanced, it becomes necessary torefer to the definition of the term "goods" under the Act, which is as under:"2 (M) "goods" means all kinds of moveable property (other than newspapers, actionable claims, stocks and shares and securities) and includes livestock, all materials, commodities and articles (including those to be used in the fitting out, improvement or repair of moveable property), and all growing crops, grass or things attached to, or forming part of, the land which are agreed to be severed before sale or under the contract of sale". So, goods are defined as all kinds of moveable property except (1) newspapers (2) actionable claims and (3) stocks, shares and securities. The petitioners contend that at best the import licence could be considered to be only an actionable claim and nothing more. Section 3 of the Transfer of Property Act defines actionable claim to mean any secured debt or beneficial interest in moveable property not in possession actual or constructive, whether present or future, conditional or contingent. ( 6 ) LET me now proceed to examine the nature of the import licence. By virtue of the provisions of the Imports and Exports Control Act, 1947, no person except under a permit granted can import goods and that Act bars importation of goods otherwise. The legal incident of such a permit not only enables a dealer to indulge in a business activity of importing goods but also excludes competition confining it to a small number. Viewed thus, a permit authorising the importation of goods can certainly be treated to be a valuable right in relation to goods and is therefore move able property. The only question is whether the same amounts to an actionable claim or not. It does not deal with any claim to debts secured either by moveable or immovable property and therefore does not fall within the first part of actionable claim. The only question is whether the same amounts to an actionable claim or not. It does not deal with any claim to debts secured either by moveable or immovable property and therefore does not fall within the first part of actionable claim. And it is not a claim to beneficial interest of moveable property not in possession of the petitioners regarding which Courts could give relief. As stated earlier, the import licence not merely enables a person the right of indulging in a business of importing goods but it also excludes competition. Therefore, it cannot be said that it is only a beneficial interest in respect of a moveable property not in possession of the person but is itself a valuable right which, according to the petitioners' themselves, is freely transferable. The import licence therefore must be treated as merchandise for the purposes of the Act and clearly falls within the definition of goods. ( 7 ) THE argument that the same has not been taken note of as goods by Accountants will not carry the matter any further. What is stated above is the legal incident of such a right. At any rate, it is clear that the right to import goods granted under the import licence is not as ephemeral a right as to participate in a lottery and definitely is of a greater value in the commercial market. Therefore, I have no hesitation in holding that the contentions advanced on behalf of the petitioners have no substance. ( 8 ) THE question whether it should be subjected to levy of tax at multi-point or single point is a matter of legislative policy and even if it is not classified to be goods falling under any of the schedules to the Act, Section 5 (1) of the Act is obviously attracted. In the circumstances, I find the challenge to the circular impugned herein is not well-founded. The petitions shall stand dismissed. Rule discharged. And in respect of those cases where rule has not been issued, the same shall stand rejected. --- *** --- .