Madras HC: Subsequent Amendment Cannot Be Applied Retrospectively to Deny Provisional Release of Imported Goods

Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 14.09.2026

Madras HC: Subsequent Amendment Cannot Be Applied Retrospectively to Deny Provisional Release of Imported Goods

The Madras High Court has ruled in favour of importer M/s Smart Impex Solutions on the issue of provisional release of imported goods, holding that a subsequent statutory amendment cannot govern imports covered by Bills of Lading issued before the amendment came into force unless the notification expressly provides for retrospective operation.

Justice Hemant Chandangoudar directed Customs authorities to consider the petitioner’s request for provisional release under Section 110A of the Customs Act, 1962, within four weeks and, upon compliance with the conditions imposed, release the goods provisionally within a further period of two weeks.

Dispute Over Import of Second-Hand Digital Multifunction Machines

1. Smart Impex Solutions approached the High Court under Article 226 of the Constitution of India, seeking a writ of mandamus directing Customs authorities to allow provisional release of two consignments comprising various models of second-hand Highly Specialized Equipment – Digital Multifunction Print and Copying Machines.
2. The consignments were covered by two Bills of Entry dated 3 August 2026. The corresponding Bills of Lading were dated 26 May 2026 and 24 May 2026, respectively.
3. The importer sought provisional release on execution of a simple bond for 100% of the enhanced value of the goods and payment of applicable total GST on the enhanced value. The order records that Customs Duty was exempted. The enhanced valuation was based on inspection reports and valuation certificates issued by the Chartered Engineers, M/s Supreme Techno Associates Pvt. Ltd.

Importer Relied on Earlier Madras High Court Decision

1. Counsel for Smart Impex Solutions argued that the issue was no longer res integra and was squarely covered by an earlier common order of the Madras High Court dated 10 July 2025 in W.P. Nos. 29418 of 2024 etc. batch.
2. In that batch of cases, the Court had directed consideration of importers’ requests for provisional release of similar goods under Section 110A of the Customs Act.

Customs Relied on 2026 Amendment

• The Customs Department opposed the petition by relying upon an amendment dated 10 March 2026 to the Notification dated 1 July 2021.
• According to the Department’s submission recorded in the judgment, the amendment provided an exemption in respect of Highly Specialized Equipment satisfying the prescribed criteria, subject to a specific exemption issued by the Ministry of Electronics and Information Technology under paragraph 2 of the Gazette Notification dated 18 March 2021, as amended on 26 April 2023, where the equipment was manufactured or imported in quantities of less than 100 units per model per year.
• Crucially, the amendment was stated to have come into force with effect from 15 June 2026.
• Customs further submitted that, for considering the petitioner’s claim, the date of the Bills of Lading would be considered as provided under Section 15 of the Customs Act, 1962.

Bills of Lading Pre-Dated the Amendment

• The dates became decisive.
• The High Court noted that the two Bills of Lading were dated 26 May 2026 and 24 May 2026, whereas the amendment relied upon by Customs came into force only on 15 June 2026.
• The Court then laid down the central principle governing the dispute:
• “Unless a statutory notification expressly provides for retrospective operation, it can only operate prospectively.”
• Accordingly, the Court held that the amendment relied upon by Customs could not govern imports covered by Bills of Lading issued before the amendment commenced. Consequently, Customs could not refuse to consider the importer’s request for provisional release by relying upon that amendment.

Earlier Judgment on Similar Imports Also Favoured Consideration of Provisional Release

• The High Court further observed that the issue concerning provisional release of similar imported goods had already been considered in its common order dated 10 July 2025 in W.P. Nos. 29418 of 2024 etc. batch.
• Importantly, the Customs authorities were unable to point out any distinguishing feature that would justify taking a different view in the case of Smart Impex Solutions.

Customs Directed to Decide Section 110A Request Within Four Weeks

• In view of these findings, the High Court disposed of the writ petition with specific directions.
• The respondents were directed to consider Smart Impex Solutions’ request for provisional release under Section 110A of the Customs Act, 1962 and pass an appropriate order within four weeks from receipt of a copy of the High Court’s order. Customs was permitted to impose such conditions as may be considered necessary in accordance with law.
• More importantly, the Court directed that once the petitioner complies with the conditions imposed by Customs, the imported goods shall be provisionally released within two weeks thereafter.

Provisional Release Does Not Decide Customs Adjudication

• The High Court nevertheless made an important distinction between provisional release of the goods and final adjudication of the Customs dispute.
• It expressly clarified that provisional release would remain subject to the outcome of adjudication proceedings under the Customs Act, 1962.
• The adjudicating authority was directed to decide those proceedings independently on their own merits and in accordance with law, without being influenced by observations made in the High Court’s order.
• Thus, the judgment should not be interpreted as a final determination of the legality of the import, classification, valuation or any other issue that may arise during Customs adjudication. The relief granted by the High Court concerns the provisional release of the consignments.

Why the Judgment Is Significant for Importers

• The decision is significant for importers facing detention or non-release of goods where Customs seeks to rely upon a regulatory amendment introduced after the relevant import transaction.
• The judgment reiterates the basic principle that, unless retrospective operation has expressly been provided, a statutory notification ordinarily operates prospectively. In the present case, because the Bills of Lading pre-dated the amendment’s commencement, Customs could not rely upon that later amendment as a ground for refusing even to consider provisional release.
• The ruling also reinforces the practical importance of Section 110A of the Customs Act, which provides the statutory mechanism for provisional release of goods pending adjudication, subject to appropriate conditions.

Key Takeaway

The Madras High Court’s decision provides relief to M/s Smart Impex Solutions by requiring Customs to process its request for provisional release rather than reject it on the basis of a subsequently effective amendment.

The key proposition emerging from the judgment is:

A statutory amendment or notification cannot ordinarily be applied retrospectively to imports covered by Bills of Lading issued before its commencement unless retrospective operation is expressly provided. Customs therefore cannot rely upon such a subsequent amendment to refuse consideration of provisional release under Section 110A of the Customs Act.

The petitioner/importer therefore succeeded on the provisional-release issue, although the underlying Customs adjudication remains open for independent determination.

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Source: Madras High Court

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Ravi Shekhar Jha – Advocate, Bar Council of Delhi