Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation
Date: 08.04.2026
Supreme Court Holds Revisional Powers Must Be Exercised Within Reasonable Time
Adv Ravi Shekhar Jha
This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email idΒ intelconsul@gmail.comor on his Mobile +91-9999005379.
On October 11, 2007, the Supreme Court of India delivered a significant judgment in the case ofΒ State of Punjab & Ors v. Bhatinda District Coop. Milk Producers Union Ltd.. This case revolved around the interpretation of the Punjab General Sales Tax Act, particularly concerning the reasonable period for exercising revisional powers under Section 21(1) of the Act.Β Below, we delve into the details of the case, the legal arguments presented, and the implications of the judgment.
Background of the Case
The respondent in this case, Bhatinda District Cooperative Milk Producers Union Ltd., is a federation of milk unions registered under the Punjab Cooperative Societies Act, 1948.Β It is also a registered dealer under the Punjab General Sales Tax Act and operates milk plants under the Punjab State Cooperative Milk Producers Federation Limited, Chandigarh.
The Punjab General Sales Tax Act mandates the levy of purchase tax on milk when purchased for use in the manufacture of goods other than tax-free goods.Β The respondent had filed quarterly returns for the financial year ending March 31, 2000, and the assessment proceedings were completed on March 20, 2001.
However, on September 4, 2006, the Revisional Authority issued a notice to the respondent, seeking to revise the assessment order from 2001.Β The respondent challenged this notice in the Punjab and Haryana High Court, arguing that the notice was time-barred and lacked justification for the delay in exercising revisional powers.
Legal Provisions in Question
The case primarily revolved around the interpretation of Sections 11 and 21 of the Punjab General Sales Tax Act:
Section 11: This section prescribes a three-year limitation period for completing tax assessments from the last date for filing returns.Β Sub-section (6) provides a five-year limitation period for assessing tax liabilities in cases where a dealer has failed to apply for registration.
Section 21: This section grants the Commissioner the power to revise any proceedings or orders made by subordinate authorities.Β However, it does not explicitly prescribe a time limit for exercising revisional powers.
Key Issues in the Case
The primary question before the Supreme Court was:Β What constitutes a reasonable period for reopening an order of assessment under the Punjab General Sales Tax Act?
The Revisional Authority issued the notice more than five years after the original assessment order was passed.Β The respondent argued that this delay was unreasonable and violated the principles of natural justice.Β The High Court had ruled in favor of the respondent, stating that the notice was unsustainable due to the lack of a reasonable time frame for exercising revisional jurisdiction.
Supreme Court’s Observations and Judgment
The Supreme Court upheld the High Court’s decision, emphasizing the following points:
Reasonable Period for Revisional Powers:
Although Section 21 does not specify a time limit for exercising revisional powers, the Court held that such powers must be exercised within a reasonable period.
The Court determined that a reasonable period for exercising revisional jurisdiction under the Act should generally be three years, and in any case, should not exceed five years.
Statutory Scheme and Precedents:
The Court referred to the statutory scheme of the Punjab General Sales Tax Act, which prescribes a maximum limitation period of five years under Section 11(6).
It also cited precedents, includingΒ The State of Orissa v. Debaki Debi & Ors.Β andΒ S.B. Gurbaksh Singh v. Union of India & Ors., which emphasized the importance of exercising revisional powers within a reasonable time.
Jurisdictional Question:
The Court noted that the question of limitation is a jurisdictional issue.Β Since the Revisional Authority is a creature of statute, it cannot independently determine what constitutes a reasonable period for exercising its powers.
The High Court was justified in intervening, as the Revisional Authority had failed to provide any reasons for the delay in issuing the notice.
Judicial Review:
The Supreme Court acknowledged that while writ courts generally do not entertain challenges to show-cause notices, this case was an exception due to the jurisdictional question involved.
Implications of the Judgment
This judgment has significant implications for the exercise of revisional powers under the Punjab General Sales Tax Act and similar statutes:
Clarity on Reasonable Period:
The judgment establishes that revisional powers must be exercised within a reasonable period, which is generally three years and should not exceed five years.
Accountability of Revisional Authorities:
Revisional authorities must provide valid reasons for delays in exercising their powers.Β Failure to do so may render their actions legally unsustainable.
Judicial Oversight:
The judgment reinforces the role of High Courts in ensuring that statutory authorities act within their jurisdiction and adhere to principles of natural justice.
Conclusion
The Supreme Court’s judgment in theΒ Bhatinda District Coop. Milk Producers Union Ltd.Β case serves as a landmark decision in clarifying the scope and limitations of revisional powers under the Punjab General Sales Tax Act. It underscores the importance of adhering to reasonable time frames and the need for statutory authorities to act within their jurisdiction. This case is a reminder of the judiciary’s role in upholding the rule of law and protecting the rights of individuals and organizations against arbitrary actions by authorities.β
Connected Matter – CESTAT Chandigarh Sets Aside Time-Barred Provisional Assessment and Demand Under Section 28
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 22.01.2026
Supreme Court Clarifies Legal Validity of Government Notifications
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.
On January 21, 2026, the Supreme Court of India delivered a landmark judgment in the case of Viraj Impex Pvt. Ltd. vs. Union of India & Anr. β (2026 INSC 80), addressing a critical issue regarding the interpretation of the term “date of this Notification” in the context of a government-imposed Minimum Import Price (MIP) on certain steel products. β This judgment has significant implications for importers, exporters, and policymakers, as it clarifies the enforceability of notifications under the Foreign Trade (Development and Regulation) Act, 1992. β
Background of the Case β
The appellants, private limited companies engaged in the import and trading of steel products, challenged a Notification issued by the Directorate General of Foreign Trade (DGFT) on February 5, 2016. The Notification introduced a Minimum Import Price (MIP) for specified steel products under Chapter 72 of the Indian Trade Clarification (Harmonized System), 2012. β While the Notification was uploaded on the DGFT website on February 5, 2016, it was officially published in the Official Gazette on February 11, 2016.
The appellants had entered into firm sale contracts with exporters from China and South Korea between January 29, 2016, and February 4, 2016, and opened irrevocable Letters of Credit (LCs) on February 5, 2016. β Anticipating restrictions, they applied for registration of their LCs under transitional protection provided by paragraph 1.05(b) of the Foreign Trade Policy (FTP) on February 8, 2016. β
The appellants argued that the Notification, published in the Official Gazette on February 11, 2016, could not be applied retroactively to imports covered by LCs opened before its publication. β They sought to quash the Notification or, alternatively, a declaration that the Notification did not apply to their LCs. β
High Court Judgment β
The High Court of Delhi dismissed the appellants’ writ petitions on December 21, 2018. β While the High Court acknowledged that the Notification became effective on February 11, 2016, it held that the uploading of the Notification on February 5, 2016, constituted sufficient notice to bind importers whose LCs were not opened before that date. β The High Court also ruled that the Notification was not an act of delegated legislation. β
Supreme Court’s Analysis
The Supreme Court examined the central issue: whether the term “date of this Notification” in paragraph 2 of the Notification referred to February 5, 2016 (the date of uploading) or February 11, 2016 (the date of publication in the Official Gazette). β The Court’s analysis focused on the statutory framework and the legal principles governing the enforceability of delegated legislation. β
Key Points from the Judgment:
Publication in the Official Gazette is Mandatory: β The Court emphasized that delegated legislation, unlike parliamentary enactments, is framed without open legislative debate. β Therefore, publication in the Official Gazette is essential to ensure accessibility, notice, accountability, and legal enforceability. β The Notification itself acknowledged its incompleteness by stating it was “to be published in the Gazette of India.” β
Legal Consequences of Publication: β The Court held that a Notification acquires the force of law only upon its publication in the Official Gazette. β Until such publication, the Notification remains an intention and does not impose legal obligations or curtail rights. β
Interpretation of “Date of Notification”: β The Court ruled that the expression “date of this Notification” in paragraph 2 of the Notification must be construed as the date of its publication in the Official Gazette, i.e., February 11, 2016. β
Relevance of FTP Paragraph 1.05(b): β The Court clarified that paragraph 1.05(b) of the FTP, which provides transitional protection for imports under LCs established before the imposition of restrictions, is integral to paragraph 2 of the Notification. β The appellants, having opened their LCs before February 11, 2016, were entitled to the benefit of this transitional provision. β
Rule of Law and Commercial Confidence: β The Court underscored that imposing trade restrictions based on an unpublished Notification would undermine commercial confidence and violate the Rule of Law. β Transparency and predictability are essential in regulating foreign trade. β
Conclusion
The Supreme Court’s judgment in Viraj Impex Pvt. β Ltd. vs. Union of India & Anr. β sets a significant precedent in the interpretation of delegated legislation under the Foreign Trade (Development and Regulation) Act, 1992. By holding that a Notification becomes enforceable only upon its publication in the Official Gazette, the Court reaffirmed the importance of transparency, legal certainty, and adherence to statutory requirements in the exercise of delegated legislative power. β
This decision is a victory for importers and exporters, as it ensures that trade restrictions cannot be imposed retroactively based on unpublished Notifications. β It also serves as a reminder to policymakers and regulatory authorities to strictly comply with statutory publication requirements to uphold the principles of the Rule of Law and protect commercial interests.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 06.01.2026
Supreme Court Invalidates Retrospective Customs Duty on SEZ-to-DTA Electricity Transfers
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.β βββ βββ β β β β β
On January 5, 2026, the Supreme Court of India delivered a significant judgment in the case of Adani Power Ltd. & Anr. β vs. Union of India & Ors. β (Civil Appeal No. 22 of 2026), addressing the legality of customs duty imposed on electrical energy generated in Special Economic Zones (SEZs) and supplied to the Domestic Tariff Area (DTA). β This decision marks the culmination of a decade-long legal battle and has far-reaching implications for taxation, judicial precedent, and the rule of law. β
Background of the Case β
Adani Power Ltd., a co-developer of a coal-based thermal power plant located in the Mundra SEZ in Gujarat, challenged the imposition of customs duty on electrical energy supplied from its SEZ unit to the DTA. β Under Section 30 of the Special Economic Zones Act, 2005 (SEZ Act), goods removed from an SEZ to the DTA are chargeable to customs duties “as if such goods had been imported into India.” β However, prior to 2009, electrical energy did not attract customs duty on import, maintaining fiscal neutrality for electricity supplied from SEZs to the DTA. β
In 2010, the Union Government introduced Notification No. β 25/2010-Cus., which imposed a 16% ad valorem customs duty on electrical energy cleared from SEZs to the DTA, with retrospective effect from June 26, 2009. β This notification was challenged by Adani Power Ltd., and in 2015, the Gujarat High Court declared the levy unconstitutional, citing the absence of a lawful charging event, misuse of exemption powers, violation of Article 265 of the Constitution, and arbitrary double taxation. β
The Union Government subsequently issued new notifications (Nos. β 91/2010-Cus. and 26/2012-Cus.) β that imposed reduced per-unit customs duties of ten paise and three paise, respectively, on SEZ-to-DTA electricity clearances. β Adani Power Ltd. filed another writ petition in 2016, seeking a refund of the amounts paid under protest for the period between September 16, 2010, and February 15, 2016, arguing that the 2015 judgment should apply to the subsequent period as well. β
Key Issues Addressed by the Supreme Court
The Supreme Court identified five critical issues for determination:
Scope and Effect of the 2015 Judgment: The Court held that the 2015 Gujarat High Court judgment was not limited to a single notification or a specific time frame. β Instead, it was a general declaration of law that customs duty could not be levied on SEZ-to-DTA electricity clearances under the statutory framework existing at the time. β
Changes in Statutory or Factual Footing: The Court found no material changes in the legal or factual basis between the periods before and after September 15, 2010. β The subsequent notifications merely altered the rate and prospective nature of the levy but did not address the fundamental absence of a lawful charging event. β
Grant of Relief Without Specific Challenges to Later Notifications: The Court rejected the argument that Adani Power Ltd. needed to challenge each subsequent notification separately. β It emphasized that once a levy is declared ultra vires, all derivative attempts to enforce the same levy are equally unenforceable. β
Effect of Binding Precedent on a Later Coordinate Bench: The Court criticized the Gujarat High Court’s 2019 judgment for narrowing the scope of the 2015 ruling. β It reiterated that a coordinate bench is bound to follow an earlier decision unless it refers the matter to a larger bench for reconsideration. β
Directions for Refund and Future Compliance: The Court directed the Union of India and customs authorities to refund the amounts deposited by Adani Power Ltd. under protest for the period in question, without interest. β It also prohibited further demands for customs duty on SEZ-to-DTA electricity clearances for the relevant period. β
Key Takeaways from the Judgment
Limits of Delegated Legislation: The Supreme Court reaffirmed that delegated legislation, such as exemption notifications under Section 25 of the Customs Act, cannot be used to impose a new levy. β The power to exempt is distinct from the power to tax, which rests solely with Parliament. β
Judicial Precedent: The judgment underscores the importance of judicial discipline and adherence to precedent. β A coordinate bench cannot arbitrarily narrow the scope of an earlier ruling; it must either follow the precedent or refer the matter to a larger bench. β
Finality of Adjudication: The Court emphasized that once a judicial decision has attained finality, the executive is obligated to conform its conduct to the law declared. β Reintroducing an invalidated levy through successive notifications undermines the rule of law and burdens the judiciary with repetitive litigation. β
Restitution of Unlawfully Collected Taxes: The Court held that the State cannot retain amounts collected under a levy declared ultra vires. β Restitution is a necessary consequence of the finding of illegality. β
Conclusion
The Supreme Court’s judgment in the Adani Power Ltd. case is a landmark decision that reinforces the principles of constitutional taxation, judicial discipline, and the rule of law. By striking down the levy of customs duty on SEZ-to-DTA electricity clearances, the Court has provided clarity on the limits of delegated legislation and the importance of adhering to judicial precedent. The decision also serves as a reminder to the executive of its obligation to respect and implement judicial pronouncements, ensuring finality in litigation and upholding public confidence in governance.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 14.12.2025
The Issue of Pre-Import Condition under Advance Authorization Scheme
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.
The “pre-import condition” under the Advance Authorization Scheme has been a significant issue for exporters, particularly for imports made between October 13, 2017, and January 9, 2019. β This condition required that goods be imported first and then used for manufacturing export goods, which created operational challenges for exporters. β The condition was introduced to regulate exemptions from Integrated Goods and Services Tax (IGST) and GST Compensation Cess under the scheme. β
Legal Framework Governing the Issue
1. Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act):
The FTDR Act, 1992 provides the legal foundation for the formulation and implementation of the Foreign Trade Policy (FTP). β
Section 5 of the FTDR Act empowers the Central Government to formulate and amend the FTP to regulate imports and exports. β
The Advance Authorization Scheme is governed under Chapter IV of the FTP, which is framed under the FTDR Act.
2. Customs Act, 1962:
The Customs Act, 1962 governs the levy and collection of customs duties on imports and exports. β
Section 25(1) of the Customs Act empowers the Central Government to issue exemption notifications for customs duties. β
This notification exempted goods imported under Advance Authorization from various duties, including Basic Customs Duty (BCD), Additional Customs Duty, Anti-Dumping Duty, and others. β
This notification amended Notification No. β 18/2015-Customs to include exemptions for IGST and GST Compensation Cess, subject to the fulfillment of the pre-import condition. β
Two key conditions were introduced:
Exemption from IGST and Compensation Cess was applicable only for physical exports. β
The exemption was subject to the pre-import condition, meaning goods had to be imported first and then used for manufacturing export goods.
5. Customs Circular No. β 16/2023:
Issued in compliance with the Supreme Court’s judgment, this circular provides a procedure for regularizing imports that failed to meet the ‘pre-import condition’ during the specified period. β It allows importers to pay IGST and Compensation Cess along with applicable interest and claim refunds or ITC, subject to eligibility under GST laws.
β
6. Foreign Trade Policy (FTP) 2023:
Paragraph 4.03: Governs the Advance Authorization Scheme, allowing duty-free import of inputs physically incorporated into export products. β
Paragraph 4.13: Empowers the Director General of Foreign Trade (DGFT) to impose pre-import conditions for specific inputs. β
Paragraph 4.14: Lists the duties exempted under the Advance Authorization Scheme, including IGST and Compensation Cess, subject to the pre-import condition. β
Paragraph 4.27: Permits exports in anticipation of authorization, allowing exporters to export goods before importing inputs under Advance Authorization. β
7. Handbook of Procedures (HBP) 2023:
Paragraph 4.27(d): States that duty-free authorizations for inputs subject to pre-import conditions cannot be issued. β
Appendix 4J: Lists specific inputs subject to pre-import conditions and their export obligation periods. β
Supreme Court Judgment (April 28, 2023):
The Supreme Court upheld the Revenue’s appeal, ruling that the pre-import condition was valid and not arbitrary or unreasonable. Key points from the judgment include:
Legality of Pre-Import Condition:
The pre-import condition was within the powers of the DGFT under Paragraph 4.13(i) of the FTP and Section 5 of the FTDR Act.
The condition was introduced to align the Advance Authorization Scheme with the GST regime, which aimed to create a unified tax structure.
Impact of GST:
The GST regime introduced IGST and Compensation Cess, which were not part of the original Notification No. β 18/2015-Customs. The pre-import condition was introduced to ensure compliance with the new tax framework.
Hardship to Exporters:
The court acknowledged the operational challenges faced by exporters due to the pre-import condition but emphasized that inconvenience does not render a policy arbitrary or unconstitutional. β
Legislative Intent:
The court recognized the legislative intent behind the pre-import condition as part of broader fiscal reforms under GST. β
How DGFT Clarifications Helped Address Discrepancies
The Directorate General of Foreign Trade (DGFT) issued several clarifications and circulars to address the challenges and discrepancies arising from the pre-import condition:
In compliance with the Supreme Court judgment, this notice informed exporters that imports made under the Advance Authorization Scheme between October 13, 2017, and January 9, 2019, which could not meet the pre-import condition, may be regularized by making payments as prescribed in Customs Circular No. β 16/2023 (dated June 7, 2023). β
Regional Authorities were instructed to guide exporters on the regularization process. β
Provided detailed clarifications for specific scenarios:
Imports after January 10, 2019: Not subject to the pre-import condition. β
Imports under Advance Authorization on payment of IGST and Compensation Cess: Not subject to the pre-import condition, irrespective of the date of import. β
Partially completed imports: Imports made after January 10, 2019, are not subject to the pre-import condition, even if some imports were made before this date. β
Clarified that the Export Obligation Discharge Certificate (EODC) shall not be withheld if all other requirements are fulfilled in the following cases:
IGST paid in cash during the specified period. β
Non-availing of duty exemptions for IGST, Compensation Cess, or other levies (except Basic Customs Duty). β
Compliance with pre-import condition and other procedural requirements under the scheme. β
Addressing Deficiencies in Advance Authorization Applications β
For exporters facing deficiencies due to non-compliance with the pre-import condition, the following steps can be taken:
1. Regularization of Imports:
As per Trade Notice No. β 07/2023-24, imports made between October 13, 2017, and January 9, 2019, which did not meet the pre-import condition, can be regularized by paying the applicable duties and interest to the Customs Authority. β
Exporters should approach the jurisdictional Customs Authority with the required documentation and make the necessary payments. β
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379. β
Customs duty on transactions between the Domestic Tariff Area (DTA) and Special Economic Zones (SEZs) has gone through a lot of churn in the last few years β especially around export duty on DTAβSEZ supplies and import-like duties on SEZβDTA clearances. With the latest Supreme Court and High Court rulings, plus some important notifications and circulars, the position is now much clearer (and more taxpayer-friendly) on several issues.
1. Why DTAβSEZ Customs Duty Is Such a Hot Topic
SEZs are legally treated as deemed foreign territory for certain tax purposes. Under the SEZ framework, goods going from DTA to SEZ are treated as βexportsβ, while goods coming from SEZ to DTA are treated as βimportsβ β but thatβs under the SEZ law, not automatically under the Customs Act.
This duality has created classic disputes:
Can export duty be levied on DTAβSEZ supplies?
How exactly are customs duties computed on SEZβDTA clearances?
Can returned goods from SEZ to DTA get re-import exemption (Notification 45/2017-Cus)?
What is the interplay between Customs Act, 1962, the SEZ Act, 2005 and Customs Tariff Act, 1975 in these flows?
Recent jurisprudence β especially the 2025 Supreme Court ruling in the Adani Power matter and the Andhra Pradesh High Courtβs decision striking down the fifth proviso to Rule 27(1) of the SEZ Rules β has addressed some of these issues head-on.
2. Statutory Framework: Customs Act vs SEZ Act
2.1 Key provisions of the SEZ Act, 2005
Some of the most important provisions of the SEZ Act for duty issues are:
Section 2(m) β Defines βexportβ to include:
physical exports out of India, and
supplying goods from DTA to a SEZ unit or developer.
Section 26 β Grants exemptions from customs duties, excise, service tax etc. on goods/services imported or procured from DTA for authorised operations in SEZ.
Section 30 β Charging section for SEZβDTA clearances: goods removed from an SEZ to DTA are chargeable to duties of customs (including ADD/CVD/SGD) as if such goods are imported into India.
Section 51 β Gives the SEZ Act overriding effect over other laws if there is inconsistency.
Section 53 β Deems an SEZ to be a territory outside the customs territory of India for specified purposes.
2.2 Customs Act, 1962 & Customs Tariff Act, 1975
Section 12, Customs Act β The charging provision for customs duty on goods imported into or exported from India.
Customs Tariff Act, 1975 β Specifies rates of BCD, export duty, ADD, CVD, safeguard duty, etc.
The core constitutional point is: no customs duty can be levied without a clear charging section in an Act of Parliament. Rules, notifications and circulars cannot create a new levy.
3. Types of DTAβSEZ Transactions & Customs Duty Treatment
3.1 DTA β SEZ: Are these βexportsβ and is customs duty payable?
Under the SEZ Act, supplies from DTA to SEZ are expressly treated as βexportsβ and SEZ units are entitled to benefits such as drawback and other export incentives.
The Central Board of Excise & Customs (now CBIC) clarified this position through Customs Circular No. 29/2006, recognising that:
Supplies from DTA to SEZ are exports,
They are eligible for rebate/drawback, and
Exemptions from central excise duty apply to such supplies.
3.1.1 Export duty on DTAβSEZ: the big controversy
For years, authorities tried to levy export duty on DTAβSEZ supplies by relying on:
The definition of βexportβ in Section 2(m) of SEZ Act, and
The fifth proviso to Rule 27(1) of the SEZ Rules, 2006, inserted in 2018, which stated that supplies from DTA to SEZ shall attract export duty where leviable.
This was challenged on the ground that:
Section 12 of the Customs Act levies export duty only when goods go out of India;
SEZ units are still within Indiaβs territory, even if deemed outside the customs territory for limited purposes; and
The SEZ Act has no charging section for export duty on DTAβSEZ supplies, unlike Section 30, which specifically charges customs duty on SEZβDTA movement.
This controversy has now largely settled in favour of the assessee (discussed in Section 5 below).
3.1.2 GST angle on DTAβSEZ supplies
Under the IGST Act, supplies to SEZ are treated as zero-rated supplies, and all supplies from DTA to SEZ are treated as inter-State supplies to be governed by IGST provisions.
This is separate from customs duty, but in practice many businesses mix the two. The key is:
GST: DTAβSEZ = zero-rated inter-State supply
Customs: DTAβSEZ = no customs/export duty after the recent rulings, absent a charging section
3.2 SEZ β DTA: Treated as βimportsβ for customs
When goods move from SEZ to DTA, Section 30 of the SEZ Act expressly provides that such clearances are chargeable to duties of customs (including ADD, CVD, safeguard, etc.) as if the goods were imported into India.
CESTAT in Lupin Ltd v. Commissioner of Customs held that:
Clearances from SEZ to DTA attract customs duty under Section 30,
Rule 48(3) of SEZ Rules (which facilitates invoices instead of Bill of Entry in certain cases) cannot override the charging section, and
Reduced or nil duty can apply only where the tariff rate itself is nil or where a valid exemption notification so provides.
Practical implication: Whenever goods are cleared from SEZ to DTA, treat them like imports β file a Bill of Entry (unless the specific βinvoice modeβ conditions are satisfied) and pay customs duty as per the Customs Tariff.
3.3 DTA β SEZ β DTA (returns of goods, βas isβ or after processing)
A very tricky area is when:
Goods are supplied from DTA to SEZ (treated as export under SEZ Act), and
The same goods β either unutilised or processed β are sent back to DTA.
Key questions:
Is this a re-import entitled to benefit of Notification 45/2017-Cus (re-import of goods exported under rebate/drawback/bond)?
Who is the βimporterβ β the SEZ unit or the DTA buyer?
What is the duty base β original export price, retained value, or full transaction value at the time of return?
The Lupin line of decisions & commentary suggests:
Section 30 SEZ Act is the primary charging section for SEZβDTA clearances, and
The benefit of Notification 45/2017-Cus is not automatically available for goods returning from SEZ to DTA; in many cases the DTA entity is treated as the importer liable to duty on full value.
In short: βround-trippingβ via SEZ does not automatically give a re-import exemption. Very careful structuring and documentation is required.
4. Key Customs Notifications & Circulars Relevant to DTAβSEZ Duty
This is not an exhaustive list, but covers notifications and circulars that often come up when structuring or litigating DTAβSEZ flows:
A comprehensive exemption notification listing effective BCD rates for hundreds of items.
Includes specific entries where goods received from SEZ to DTA and returned to SEZ (e.g. LPG used in manufacture of polyisobutylene) may enjoy nil BCD, subject to conditions.
This shows how the Government has, in some cases, explicitly carved out SEZβDTAβSEZ flows in the tariff/exemption structure.
4.3 Notification No. 45/2017-Cus., dated 30.06.2017 (Re-import of exported goods)
Grants conditional exemption on re-import of goods earlier exported:
under duty drawback,
under rebate of central excise/service tax, or
under bond/other schemes.
The notification is central to disputes like Lupin, where it was argued that goods returning from SEZ to DTA should be treated as re-imports eligible for this exemption.
Authorities have taken a restrictive view β in many cases, re-import exemption is denied where the transaction structure doesnβt strictly fit the notification language.
Clarifies that supplies from DTA to SEZ are exports,
Such supplies are eligible for rebate/drawback, and
Specific excise notification (58/2003-CE) for SEZ supplies had become redundant.
This circular has been repeatedly relied upon in litigation to demonstrate that Governmentβs own understanding is that DTAβSEZ supplies are exports only for benefit (drawback/rebate), not for imposition of customs/export duty.
4.5 Rule 27(1) of SEZ Rules & the Fifth Proviso (2018)
Rule 27(1) allows units or developers to import or procure from DTA without payment of duty, taxes and cess for authorised operations.
The fifth proviso, inserted in 2018, stated that supplies from DTA to SEZ shall attract export duty if leviable on the goods.
The Andhra Pradesh High Court has now held this fifth proviso to be ultra vires the SEZ Act (discussed below).
5. Recent Case Law: How Courts Have Read DTAβSEZ Customs Duty
Here are some key judicial developments that anyone dealing with DTAβSEZ flows should know.
5.1 Union of India v. Adani Power Ltd & Ors β Supreme Court, 2025
In a landmark 2025 judgment, the Supreme Court dismissed the Unionβs appeals and held that no export duty is leviable on DTAβSEZ supplies.
Key takeaways:
Section 12, Customs Act is the exclusive charging provision for customs duty.
DTAβSEZ transfers do not involve goods crossing the territorial boundary of India, hence cannot be taxed as βexportsβ under Section 12.
The SEZ Act defines such supplies as βexportsβ only for granting benefits, not for expanding the customs duty net.
Rules or SEZ provisions cannot create a new tax levy in the absence of a charging section in the parent Act.
This judgment aligns constitutional tax principles with the SEZ scheme and gives strong support to assessees who resisted export duty demands on DTAβSEZ supplies.
5.2 TUF Metallurgical Pvt Ltd v. Union of India β Andhra Pradesh High Court, 2025
The Andhra Pradesh High Court struck down the fifth proviso to Rule 27(1) of SEZ Rules, 2006 (which mandated export duty on DTAβSEZ supplies) as ultra vires the SEZ Act.
Ruling highlights:
The SEZ Act contains no charging provision for export duty on DTAβSEZ supplies, unlike Section 30 for SEZβDTA.
Rules framed under the Act cannot create a substantive levy of export duty; they are limited to procedural aspects.
Export duty can only be imposed under Section 12 of the Customs Act, which is not attracted to goods moving between DTA and SEZ within India.
This ruling was a major step in dismantling the export-duty-on-DTAβSEZ regime even before the Supreme Courtβs Adani decision.
5.3 Lupin Ltd v. Commissioner of Customs β CESTAT Delhi, 2023
In Lupin, the Tribunal dealt with goods supplied from DTA to SEZ and later returned to DTA.
Key principles:
Section 30 of the SEZ Act is the charging section when goods move from SEZ to DTA. Duty is payable as if the goods are imported into India.
Rule 48(3) SEZ Rules (which allows an invoice instead of Bill of Entry for certain returns) is only a procedural facilitation; it does not override the substantive duty liability.
Benefit of Notification 45/2017-Cus (re-import of exported goods) is not automatic for SEZβDTA returns; it must be tested strictly against the language and conditions of the notification.
Post-Lupin, customs authorities have been wary of granting re-import exemptions on SEZβDTA flows unless the DTA importer clearly fits within Notification 45/2017.
5.4 Government Revision / Clarificatory Orders
In revision orders under Section 35EE of the Central Excise Act (applied mutatis mutandis), the Central Government has itself acknowledged that:
Supplies from DTA to SEZ are exports βoutside the territory of Indiaβ for SEZ purposes,
SEZ Act creates a legal fiction for giving benefits comparable to actual exports,
But no export duty is payable in absence of a charging provision.
These orders are frequently cited in support of taxpayers in DTAβSEZ disputes.
6. Practical Compliance Pointers for Businesses
From a practitionerβs perspective, hereβs how you may want to structure your advice/checklist for clients:
6.1 For DTA β SEZ supplies
Treat supplies as exports under SEZ and GST law:
Use LUT/Bond or IGST-paid route for zero-rated supplies under IGST Act.
As on date, no export duty is leviable on DTAβSEZ supplies post Adani & TUF Metallurgical, unless Parliament amends the law.
Maintain:
SEZ-endorsed ARE-1/ARE-3/Invoice,
SEZ Approval for authorised operations,
Proof of receipt by SEZ unit/developer,
Documentation for drawback/rebate/ITC refunds.
6.2 For SEZ β DTA clearances
Treat every clearance as import into India, i.e.:
File Bill of Entry (except narrow cases under Rule 48(3)),
Pay BCD, SWS, ADD, safeguard, IGST, etc. as applicable.
Carefully review Notification 50/2017-Cus to see if a specific concessional rate or nil duty applies for your product.
6.3 When goods are returned from SEZ to DTA
Donβt assume automatic re-import exemption under Notification 45/2017-Cus.
Examine:
Who is the exporter in the original DTAβSEZ transaction?
Who is the importer of record for the SEZβDTA return?
Was the original export under drawback/rebate/bond satisfying Notification 45/2017 conditions?
Consider whether it is more defensible to:
Treat the return as a fresh import via Section 30, claim ITC of IGST, or
Structure via physical export & re-import outside SEZ, if commercially feasible.
6.4 Litigation strategy pointers
For pending or prospective demands of export duty on DTAβSEZ:
Rely on Adani Power (SC, 2025) + TUF Metallurgical (AP HC, 2025) + earlier revision orders & Circular 29/2006 to argue absence of charging provision.
For SEZβDTA issues:
Accept Section 30 as the charging section, but explore:
Product-specific exemptions in 50/2017-Cus,
Eligibility under 45/2017-Cus,
Valuation disputes (transaction value vs. cost-plus, related party, etc.).
7. Suggested Case Citations
You can safely incorporate and discuss the following real cases:
Union of India v. Adani Power Ltd & Ors, Supreme Court of India, 2025
Issue: Levy of export duty on supplies from DTA to SEZ.
Held: No export duty can be charged on DTAβSEZ; Section 12 Customs Act is not attracted when goods do not physically leave India.
TUF Metallurgical Pvt Ltd v. Union of India & Ors, Andhra Pradesh High Court, 2025
Issue: Validity of fifth proviso to Rule 27(1) SEZ Rules imposing export duty on DTAβSEZ supplies.
Held: Proviso is ultra vires the SEZ Act; there is no charging provision for export duty on such supplies in the Act.
Lupin Ltd v. Commissioner of Customs, CESTAT Delhi, 2023
Issue: Duty on goods returned from SEZ to DTA, and applicability of Notification 45/2017-Cus.
Held: Customs duty under Section 30 SEZ Act is payable on SEZβDTA clearances; Rule 48(3) cannot override the charging section; re-import exemption must strictly comply with Notification conditions.
Government of India Revision Orders (e.g., F.No. 198/57/16-RA)
Issue: Treatment of supplies from DTA to SEZ as export; availability of benefits and levy of duty.
Held: DTAβSEZ supplies are exports by legal fiction for granting benefits, not for imposing export duty; no export duty is payable in absence of a charging provision.
Various High Court & CESTAT decisions following Adani / TUF Metallurgical
These further reinforce that export duty cannot be levied on DTAβSEZ supplies solely on the basis of SEZ rules or notifications, without an explicit charging section.
8. Conclusion
The law on customs duty in DTAβSEZ transactions is now considerably clearer:
DTA β SEZ
Treated as exports under SEZ/GST law for benefits.
No export duty under Customs Act, in the absence of a clear charging provision (post-Adani & TUF Metallurgical).
SEZ β DTA
Treated as imports into India.
Section 30 SEZ Act read with Customs Tariff applies; customs duty is payable unless validly exempted.
DTA β SEZ β DTA (returns)
Require careful planning to determine whether re-import benefits (45/2017-Cus) are available or whether full customs duty must be paid under Section 30.
For businesses, this is the right time to:
Re-examine historic export duty demands on DTAβSEZ transactions,
Re-align contracts and documentation for SEZβDTA clearances, and
Proactively plan transaction structures around the current judicial position and key customs notifications discussed above.
Listen to this on our #YouTube Channel
Source: CBIC, Supreme Court, Andhra Pradesh High Court, CESTAT
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 12.11.2025
DGFT issues Clarification on Redemption of Advance Authorisations Impacted by Rule 96(10) of CGST Rules in context to the Supreme Court judgement
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce & Industry, Government of India, has issued Policy Circular No. β 07/2025-26 dated November 11, 2025, addressing concerns related to the redemption of Advance Authorisations (AAs) impacted by the erstwhile Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017. This circular provides much-needed clarity for exporters and trade members who faced challenges due to the earlier provisions of Rule 96(10) and its implications on imports made between October 13, 2017, and January 9, 2019. β
Background
Rule 96(10) of the CGST Rules, prior to its amendment, restricted the refund of IGST paid on exports in cases where exporters or their suppliers availed specified duty exemptions under Customs Notification No. β 79/2017-Customs. This created hurdles for exporters seeking redemption of their Advance Authorisations during the specified period. β
To address these issues, the DGFT had earlier issued Notification No. 33/2015-2020 on October 13, 2017, modifying Para 4.14 of the Foreign Trade Policy (FTP) 2015-2020. β This notification extended exemptions from payment of duties, including IGST and Compensation Cess, for physical exports under the AA Scheme, subject to a pre-import condition. β However, the pre-import condition was later withdrawn through DGFT Notification No. β 53/2015-2020 on January 10, 2019, following the issuance of Customs Notification No. β 01/2019-Customs.
Supreme Court Judgment and Subsequent Actions
Union of India & ORS. βvs Cosmo Films Limited
The Supreme Court of India set aside the Gujarat High Court’s judgment, which had declared the ‘pre-import condition’ in the Foreign Trade Policy (FTP) and customs notifications as arbitrary and unreasonable. The court upheld the validity of the ‘pre-import condition’ introduced by Notification No. 79/2017-Customs and Notification No. β 33/2015-2020, stating that it was within legislative discretion and not arbitrary. It emphasized that tax exemptions and refunds are statutory privileges, not constitutional rights, and that economic policies can involve phased implementation and experimentation. The court also ruled that the removal of the ‘pre-import condition’ through a later notification could not be applied retrospectively. β While allowing the Revenue’s appeals, the court directed the respondents (exporters) to claim refunds or input tax credit for duties paid during the interim period, subject to verification by the jurisdictional commissioner. β
The Honβble Supreme Court, in its judgment dated April 28, 2023, upheld the Revenueβs appeal and directed that affected parties be allowed to claim refunds or input tax credit (ITC) wherever applicable. β In response, the Customs Authorities issued Circular No. β 16/2023-Customs on June 7, 2023, and the DGFT followed suit with Trade Notices No. β 07/2023-24 and No. β 27/2023, issued on June 8, 2023, and September 25, 2023, respectively. β
Key Clarifications in Policy Circular No. β 07/2025-26
To further streamline the process and address exporters’ concerns, the DGFT has clarified the following points regarding the issuance of Export Obligation Discharge Certificates (EODC):
Payment of IGST in Cash: Exporters who paid IGST in cash at the time of clearing import consignments under the AA Scheme during the specified period will not face any hindrance in obtaining their EODC, provided all other requirements are met. β
Non-Availing of Duty Exemptions: Exporters who did not avail exemptions from IGST, Compensation Cess, or other levies (except Basic Customs Duty) are eligible for EODC issuance. β
Compliance with Pre-Import Conditions: Exporters who adhered to the prescribed pre-import and other procedural requirements under the AA Scheme will not face delays in EODC issuance. β
Conclusion
This clarification by the DGFT is a welcome move for exporters who were impacted by the earlier provisions of Rule 96(10) of the CGST Rules. β By addressing the concerns and providing clear guidelines, the government has ensured smoother processes for the redemption of Advance Authorisations. Exporters are encouraged to review the circular and ensure compliance with the outlined conditions to facilitate the timely issuance of their EODCs.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 10.11.2025
Supreme Court Quashes Customs Proceedings Against Subsequent Purchaser in Porsche Import
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
In a landmark judgment delivered on November 27, 2024, the Supreme Court of India ruled in favor of Appellant, quashing the High Court’s decision and the proceedings initiated against him under the Customs Act, 1962. The case revolved around the import of a Porsche Carrera car and the subsequent demand for unpaid customs duty amounting to Rs. β 17,92,847.
Background of the Case
The case began in 2002 when a Porsche Carrera car was imported by one Seller. β The car was later sold to another individual in 2003, and subsequently purchased by Appellant in October 2004. In 2007, the Customs Department issued a Show-Cause Notice to the importer, the first possessor, and the appellant, alleging deliberate misdeclaration of the car’s model and year of manufacture, tampering with the chassis number, and evasion of customs duty. β
The Commissioner of Customs, Cochin, confirmed the demand for customs duty and ordered the confiscation of the car, offering an option for redemption upon payment of a fine and the differential duty. β However, Appellant challenged this order before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), which ruled in his favor, stating that he was a bona fide purchaser and not involved in the import or misdeclaration of the car. β
High Court’s Decision β
The Customs Department appealed the CESTAT ruling before the High Court of Kerala, which overturned the Tribunal’s decision. The High Court held that the payment of short-levied customs duty was a necessary consequence of redeeming the confiscated goods under Section 125 of the Customs Act. β It ruled that Appellant, as a subsequent purchaser, was liable to pay the customs duty. β
Supreme Court’s Judgment
Aggrieved by the High Court’s decision, Appellant approached the Supreme Court. After hearing arguments from both sides, the Supreme Court ruled in favor of the appellant. The Court observed the following key points:
Definition of Importer: The Court clarified that under Section 2(26) of the Customs Act, an importer includes the owner or beneficial owner of goods only during the period between importation and clearance for home consumption. β Since Appellant was not the importer and had no involvement in the importation process, he could not be held liable for customs duty. β
Ownership Under Motor Vehicles Act: The Court noted that the car was not registered in Appellant’s name under the Motor Vehicles Act, 1988. β Legally, the ownership remained with the original importer. β Therefore, Choksey could not be considered the owner of the vehicle under Section 125 of the Customs Act. β
Liability of Possessor: The Court rejected the argument that Appellant, as the possessor of the car, could be held liable for customs duty. β It emphasized that liability under Section 125(1) arises only when the owner of the goods is unknown, which was not the case here. β
Final Verdict
The Supreme Court quashed the High Court’s judgment, the Show-Cause Notices, and all proceedings against Appellant, restoring the CESTAT’s order in his favor. The Court clarified that the Customs Department could proceed against the original importer, who remained the legal owner of the car. β
Key Takeaways
This judgment underscores the importance of distinguishing between importers and subsequent purchasers under the Customs Act. β It also highlights the interplay between the Customs Act and the Motor Vehicles Act in determining ownership and liability. β The ruling serves as a significant precedent for cases involving bona fide purchasers and customs duty disputes.
Conclusion
The Supreme Court’s decision in favor of Appellant is a victory for justice and a reminder of the importance of adhering to legal definitions and procedures. It reinforces the principle that subsequent purchasers cannot be held liable for the actions of importers, provided they had no involvement in the importation process. β This case will undoubtedly have a lasting impact on similar disputes in the future.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 08.11.2025
Supreme Court on the Arbitration & Conciliation Act, 1996 (A&C)
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Recent Landmarks, Contract Act interplay, and what they mean for commercial arbitration β
1) The statutory frame (A&C Act Γ Contract Act)
Consent & separability. Arbitration rests on contract formation under the Indian Contract Act, 1872 (offer/acceptance, free consent, lawful object/consideration). The arbitration clause is separable from the underlying contract (A&C s.16); even when the main contract is challenged, the clause can survive.
Party autonomy, neutrality, minimal court intervention. A&C ss.5, 7, 8, 11, 12, 18, 34, 37; the 2015/2019/2021 amendments tightened neutrality (s.12(5)), nudged institutional appointments (s.11), narrowed βpublic policyβ and βpatent illegalityβ review (s.34), and introduced a fraud/corruption stay to enforcement (s.36(3) proviso, 2021).
Contract Act βfiltersβ. Clauses that are unconscionable or in restraint of legal proceedings (s.23/s.28) are policed through A&C provisions on equal treatment (s.18) and independence (s.12). The Court now reads constitutional equality into appointment schemes in standard-form public contracts.
2) Landmark Supreme Court judgments (late-2023 to 2025)
A. 7-Judge Bench β In Re: Interplay between Arbitration Agreements under the A&C Act, 1996 and the Indian Stamp Act, 1899 (13 Dec 2023)
Issue. Is an arbitration clause in an unstamped/insufficiently stamped agreement void/inoperative at the pre-referral stage? Held.Not void ab initio. Non-stamping affects admissibility, not existence/validity of the arbitration agreement. Courts at s.8/s.11 stage should ordinarily refer to arbitration; any stamp duty objection can be cured in the arbitral process. This overruled N.N. Global (2023). Arguments noted. Parties relying on Contract Act theory of consensual bargain + separability urged that stamping is a fiscal curable defect; the opposing side pressed βno contract without stampβ. Principles. (i) separability; (ii) kompetenz-kompetenz; (iii) pro-arbitration minimal judicial review at referral stage. Commercial impact. No more pre-arbitration derailments on technical stamp objections; faster references and lower front-end risk.
B. Constitution Bench β Cox & Kings Ltd v SAP India Pvt Ltd (6 Dec 2023): Group of Companies doctrine (GoC)
Issue. Can non-signatory affiliates be bound to arbitration by conduct/participation in a single economic transaction? Held.Yes, in limited circumstances. The Court clarified and affirmed the GoC doctrine: look at common intention, participation in negotiation/performance, composite transaction, and mutuality of claims. Not a back-door to rope in every affiliate; itβs a fact-intensive inquiry. Arguments. Pro-GoC: modern commerce uses multi-entity structures; consent can be inferred from conduct. Anti-GoC: Contract Act requires privity/express assent. Principles. Consent remains the lodestar; Contract Act privity yields where objective indicia of consent exist. Impact. Better alignment of multi-party disputes with a single forum, fewer parallel litigations.
C. Five-Judge Bench β Unilateral appointments & curated panels (8 Nov 2024; 2024 INSC 857)
Issue. Are clauses letting one party (often a PSU) unilaterally appoint the sole arbitrator or restrict the other party to a curated panel valid? Held.No. The Court reaffirmed TRF/Perkins and disapproved Voestalpine/CORE to the extent they enabled one-sided control. Such clauses offend equality (A&C s.18) and independence (s.12(5)), and may be unconscionable under Contract Act s.23. Arguments.
Challengers: one-sided curation breeds bias; equality must exist at appointment.
Defenders: party autonomy permits agreed procedures; state needs vetted panels. Principles. Procedural equality and neutrality are non-derogable; waiver only post-dispute (s.12(5) proviso). Impact. Standard PSU/SoE clauses need re-drafting; expect more court-appointed neutrals or truly joint panel mechanisms.
Questions. Scope of s.34 intervention; can courts partially set aside (sever), correct clerical/computational errors, and adjust post-award interest without re-writing merits? What the Court did.
Re-maps s.34: public policy confined; patent illegality for domestic awards only; no merits re-appreciation.
Severance is intrinsic to s.34(2)(a)(iv) proviso β courts may excise only the bad part and preserve the rest.
Recognizes a narrow window to correct clerical/computational errors and, in limited circumstances, to recalibrate post-award interest while remaining within s.34 guardrailsβwithout converting s.34 into an appellate re-hearing. Arguments.
For a wider power: βthe greater power to set aside includes the lesser to varyβ; comparative seats allow calibrated fixes.
Against:Project Director, NHAI v M. Hakeem (2021) disallowed modification; only legislature can expand remedies. Takeaway. Courts cannot re-adjudicate, but may sever invalid portions and make limited corrections that keep within s.34βs text (not a merits review). Useful in construction/infra awards with multiple segregable claims.
3) How these rulings interlock with the Contract Act in commercial disputes
Consent & privity (ss.10, 13β19, 23).Cox & Kings aligns modern privity analysis with objective consent across a composite commercial matrix; affiliates who negotiated/performed or benefitted canβt later plead non-signatory status when the facts show assent by conduct.
Unconscionability/public policy (s.23). The 2024 Constitution Bench grounds neutral appointments in equality and public policy; boilerplate βsole arbitrator by employer/PSUβ provisions risk invalidation as procedurally unconscionable.
Illegality/fraud (ss.23, 17). The 2021 amendment to s.36(3) A&C permits automatic stay of enforcement if the arbitration agreement/contract/award appears induced by fraud/corruptionβa direct cross-over from Contract Act invalidating factors into the enforcement stage.
Stamping is not contract-killing. The 7-Judge ruling treats stamping as a curable admissibility issue, preventing Contract Act βexistenceβ objections from being misused to stall references.
Appointment clauses. Avoid one-party curation or unilateral appointment. Provide joint nomination or neutral institution with open panels. Cite s.12(5)/s.18; anything else risks being struck down.
Stamping hygiene. Donβt panic at referral: proceed to arbitration and cure stamping as directed; donβt burn time at s.11 on fiscal technicalities.
Multi-party deals. If affiliates are integral to negotiation/performance, record their role; that evidence supports GoC joinder later.
Section 34 strategy. Frame challenges narrowly: target jurisdictional overreach or non-arbitrable slices, seek severance of the bad portion, and limit prayer to clerical/interest corrections where appropriateβdo not invite re-hearing on facts.
5) One-page case synopses (for ready citation)
(i) 7-JB Stamping β In Re: Interplayβ¦ (2023)
Summary. Unstamped/under-stamped agreements do not kill arbitration clauses; referral courts should not conduct mini-trials on stamp duty. Stamp issues can be addressed after reference. Ruling. Referral allowed; earlier contrary view overruled. Key law. A&C ss.8, 11, 16; Stamp Act; separability/kompetenz.
(ii) Group of Companies β Cox & Kings v SAP India (2023)
Summary. Clarifies when non-signatories can be bound: intention, participation, composite transaction, interdependence of agreements. Ruling.GoC affirmed; fact-intensive consent test. Key law. A&C s.7; Contract Act consent doctrines.
2021:s.36(3) provisoβautomatic stay where prima facie fraud/corruption taints the agreement/contract/award. These provisions colour s.8/s.11 referrals and s.34/s.36 enforcement arguments.
Bottom line for commercial arbitration
The Court has de-clogged referrals (stamping), modernised consent analysis (GoC), insisted on neutral appointments (no unilateral/panel strangleholds), and stabilised s.34 practice (sever the bad; correct the obvious; do not retry the case). Draft your clauses to share appointment power, anticipate multi-entity realities, and litigate s.34 with surgical precision.
References (primary):
In Re: Interplay between Arbitration Agreements⦠(7-JB, 13 Dec 2023).
Cox & Kings Ltd v SAP India Pvt Ltd (CB, 6 Dec 2023).
Constitution Bench on unilateral appointments & curated panels (8 Nov 2024; 2024 INSC 857).
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 05.11.2025
Supreme Court Clarifies Timing and Applicability of Customs Duty Notifications
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
The Supreme Court of India recently delivered a landmark judgment in the case of Union of India & Ors. vs. M/S G S Chatha Rice Mills & Anr. β (Civil Appeal No. 3249 of 2020), which has significant implications for importers, exporters, and the government. The case revolved around the timing and applicability of a notification issued under Section 8A of the Customs Tariff Act, 1975, which increased customs duty on goods imported from Pakistan to 200%. β This judgment provides clarity on how notifications under the Customs Tariff Act are to be applied and whether they can have retrospective effect. β
Background of the Case
On February 14, 2019, a terrorist attack occurred in Pulwama, leading to heightened tensions between India and Pakistan. β In response, the Indian government issued a notification under Section 8A of the Customs Tariff Act on February 16, 2019, increasing the customs duty on all goods originating from or exported by Pakistan to 200%. β The notification was published in the e-Gazette at 20:46:58 hours on the same day. β
However, earlier on February 16, 2019, several importers had already presented their bills of entry for home consumption under Section 46 of the Customs Act, 1962. β These bills of entry were self-assessed based on the prevailing rate of duty before the notification was issued. β The customs authorities later sought to reassess these bills of entry and apply the enhanced duty rate retroactively, leading to a legal challenge by the importers. β
Key Legal Questions β
The case raised several important legal questions:
When does a notification under Section 8A of the Customs Tariff Act take effect? β Is it from the time it is published in the e-Gazette or from the start of the day it is issued? β
Can such a notification apply retrospectively to transactions completed earlier on the same day? β
Does the principle of disregarding fractions of a day apply to notifications under Section 8A? β
Supreme Courtβs Observations
The Supreme Court, in its detailed judgment, addressed these questions and provided clarity on the timing and applicability of notifications under Section 8A of the Customs Tariff Act.
1. Nature of the Notification β
The Court clarified that a notification issued under Section 8A is a form of delegated legislation. β While it has the force of law, it is not equivalent to a “Central Act” or “Regulation” as defined under the General Clauses Act, 1897. β Therefore, Section 5(3) of the General Clauses Act, which allows Central Acts to take effect from the expiration of the previous day, does not apply to such notifications. β
2. Timing of Notification β
The Court emphasized that the notification under Section 8A takes effect only from the time it is published in the e-Gazette. β In this case, the notification became effective at 20:46:58 hours on February 16, 2019. It cannot apply to bills of entry presented before this time. β The Court noted that the exact time of publication in the e-Gazette is critical in determining the enforceability of such notifications, especially in the era of electronic governance. β
3. Retrospectivity
The Court held that Section 8A does not empower the Central Government to issue notifications with retrospective effect. β The enhanced rate of duty can only apply prospectively, starting from the time of publication. β The Court emphasized that delegated legislation does not have retrospective effect unless explicitly authorized by the parent statute. β
4. Reassessment
The Court ruled that the customs authorities could not reassess bills of entry that were presented and self-assessed before the notification was published. β The rate of duty applicable at the time of presentation of the bill of entry is final and cannot be altered retroactively. β The Court also clarified that the power of reassessment under Section 17(4) of the Customs Act cannot be used to apply a new rate of duty to transactions that were completed before the notification was issued. β
Key Takeaways from the Judgment
Publication Time Matters: The Supreme Court highlighted the importance of the exact time of publication in the e-Gazette for determining the enforceability of notifications. β In this case, the notification took effect only from 20:46:58 hours on February 16, 2019, and could not apply to transactions completed earlier that day. β
No Retrospective Effect: Delegated legislation, such as notifications under Section 8A, cannot have retrospective effect unless explicitly authorized by the parent statute. β This ensures that importers are not unfairly penalized for transactions completed before the notification was issued. β
Legal Certainty for Importers: The judgment reinforces the principle that importers are entitled to rely on the rate of duty in force at the time of presenting their bills of entry. β This provides much-needed transparency and predictability in tax administration. β
Impact of Electronic Governance: The Court acknowledged the evolving role of technology in regulatory governance. β With the shift to electronic systems for filing bills of entry and publishing notifications, the timing of publication has become a critical factor in determining the applicability of laws. β
Implications of the Judgment
This judgment has far-reaching implications for importers, exporters, and the government. It ensures that importers are not subjected to sudden and retrospective changes in duty rates, protecting their rights and fostering trust in the legal system. It also emphasizes the importance of precise timing in the publication of notifications, particularly in the digital age. β
For the government, the judgment serves as a reminder to ensure timely publication of notifications and to avoid retrospective application of laws unless explicitly authorized by the parent statute. It also highlights the need for clear and consistent regulatory frameworks that align with modern technological advancements. β
Conclusion
The Supreme Courtβs decision in this case is a significant step forward in ensuring fairness and clarity in the application of fiscal laws, particularly in the context of international trade. By upholding the principle of prospective application of delegated legislation and emphasizing the importance of publication timing, the Court has reinforced the need for transparency and predictability in tax administration. β
This judgment will undoubtedly serve as a precedent for future cases involving the timing and applicability of notifications under fiscal laws, ensuring that the rights of importers and exporters are protected while maintaining the integrity of the legal system.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 01.11.2025
βSC Reinforces Attorney-Client Privilege: Summoning Lawyers for Client Information Held Illegalβ
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Supreme Court Upholds Advocate-Client Privilege
2025 INSC 1275 | In Re: Summoning Advocates by Investigating Agencies
Background of the Case
The Supreme Court of India, taking suo motu cognizance, addressed a fundamental question: Can investigating agencies summon an advocate to disclose information about a client or case he represents?
The case originated when an advocate was summoned under Section 179 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 to provide details about a bail matter he handled. The Gujarat High Court dismissed his plea, leading to the present intervention by the Supreme Court.
Core Legal Issue
Whether the investigating agency can compel an advocate to divulge client communications or case details β and if such summons violates Section 132 of the Bhartiya Sakshya Adhiniyam (BSA), 2023, which codifies the doctrine of attorney-client privilege.
Key Legal Provisions Discussed
Section 132 BSA (2023): Protects confidential communication between advocates and clients.
Section 179 BNSS (2023): Empowers officers to summon witnesses.
Section 528 BNSS (2023): Provides for judicial oversight of such summons.
Articles 19(1)(g), 20(3), 21 & 22(1) β Constitutional protection of professional rights, liberty, and the right to legal counsel.
Rule 11, Bar Council of India Rules (1975): Mandates advocates to maintain confidentiality and act with integrity.
Arguments & Perspectives
Bar Associations & Advocates
Summoning advocates infringes the right to practice and attorney-client confidentiality.
Disclosure without client consent violates Section 132 BSA and may lead to professional misconduct.
Judicial oversight is essential before any summons is issued.
State & Union of India
No advocate can be summoned merely for rendering a legal opinion or appearing for a client.
If an advocate participates in an illegal act, the privilege does not apply.
The statutory framework under BNSS & BSA already provides sufficient safeguards.
Courtβs Observations: Role of an Advocate
The Court eloquently reaffirmed the noble role of lawyers as:
Guardians of liberty and officers of justice, not mere agents of clients.
Bound by trust, confidence, and confidentiality.
Essential to ensuring the rule of law and protection of rights.
βThe position of trust the advocate occupies vis-Γ -vis his client cannot be put to test by any attempt to breach professional confidence.β β Justice K. Vinod Chandran
Exceptions to Privilege under Section 132 BSA
Clientβs express consent.
Communication made in furtherance of an illegal purpose.
Observation of a crime or fraud during engagement.
Non-professional communications (outside the course of legal engagement).
In-house counsel exclusion β salaried corporate lawyers are not covered.
Comparative Jurisprudence
The Court cited global precedents to reinforce the principle:
Greenough v. Gaskell (UK, 1833) β Privilege essential for justice.
US v. Upjohn & Co. (1979) β Ensures full disclosure between client and lawyer.
Minister of National Revenue v. Duncan Thompson (Canada, 2016) β Privilege as a principle of fundamental justice.
Akzo Nobel v. European Commission (2010) β Exclusion of in-house counsel privilege.
Judgment Highlights
Investigating agencies cannot summon advocates merely for client or case details.
Any summons must explicitly mention the exception invoked under Section 132 BSA.
Prior written approval of a superior officer (not below the rank of Superintendent of Police) is mandatory.
Advocates have a right to challenge such summons under Section 528 BNSS.
Privilege extends to legal consultations, even outside pending cases.
Documents & digital devices may be produced before a court, but confidentiality must be protected.
Final Ruling
βThe power to summon under Sections 175 & 179 BNSS is not the power to destroy the sanctity of attorney-client communications so long as the constitutional courts stand.β
The Court held the summons issued in the present case illegal, as it sought βtrue details of facts and circumstances of the caseβ from the advocate β a direct violation of Section 132 BSA and the constitutional right to effective legal representation.
Impact & Legal Significance
Reinforces Rule of Law and independence of the Bar.
Prevents coercive misuse of investigative powers.
Clarifies that privilege is client-centric, yet advocates can assert it.
Promotes judicial accountability through Section 528 BNSS oversight.
Draws a balance between investigation and professional confidentiality.
Conclusion
The Supreme Courtβs 2025 decision in In Re: Summoning Advocates marks a watershed moment for the legal profession β reaffirming that the advocate-client relationship is sacred, and confidentiality is the cornerstone of justice. While exceptions exist for illegality and fraud, the Courtβs message is clear:
No lawyer should be made to betray the trust that forms the soul of legal representation.
