Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 08.09.2026
Bombay High Court on Stamp Duty Valuation for Joint Development Agreements Involving Contingent Rights and Future Entitlements
This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email idjhamadhumita27@gmail.com.
The Bombay High Court recently delivered a significant judgment in the case of Wadhwa Constructions & Infrastructure Pvt. Ltd. vs. State of Maharashtra, addressing the complex issue of stamp duty assessment on a Joint Development Agreement (JDA) for a large land development project in Raigad. This article provides a detailed analysis of the dispute, the legal arguments, the Court’s findings, and the implications for real estate developers and authorities.
Background of the Dispute
Parties Involved:
Petitioners: Wadhwa Constructions & Infrastructure Pvt. Ltd. and Navin Makhija
Respondents: State of Maharashtra and Stamp Authorities
Project: Development of land parcels in Panvel, Raigad, under a JDA with Valuable Properties Pvt. Ltd. (VPPL)
Key Dates:
JDA executed: 18 February 2014
Initial stamp duty paid: Rs. 15.67 crore
Authorities later demanded additional stamp duty, alleging a deficit of over Rs. 21.92 crore
Core Issues
Calculation of Stamp Duty:
Whether the authorities were correct in including future and contingent rights (such as additional FSI, revenue sharing, and development of additional land) in the present valuation for stamp duty.
Interpretation of the JDA:
Whether rights over the entire land (including a 50-acre parcel subject to a future ‘Swap Notice’) and potential future FSI should be valued as present rights.
Application of Valuation Guidelines:
Dispute over the use of conversion factors (1.5 vs. 1.2) and rates (construction cost vs. market sale price) for calculating the value of constructed area and parking.
Legal Arguments
Petitioners’ Stand
Only rights and entitlements actually created and operative on the date of execution should be considered for stamp duty.
Contingent rights (like the 50-acre parcel and additional FSI) should not be included until the relevant event (e.g., Swap Notice) occurs.
The correct conversion factor for carpet area to built-up area is 1.2 (not 1.5), and construction cost (Rs. 8,500/sq.m.) should be used instead of market sale price (Rs. 24,000/sq.m.).
State’s Stand
The JDA and applicable guidelines justify including all possible rights and entitlements, including those dependent on future events, in the present valuation.
The use of 1.5 as a conversion factor and market sale price is supported by the agreement’s definitions and the Annual Statement of Rates (ASR).
Court’s Analysis and Findings
Key Principles Established
Present vs. Contingent Rights:
Only rights and development potential actually available and operative on the date of execution can be included in stamp duty valuation.
Contingent rights (dependent on future events like Swap Notice or FSI increase) cannot be treated as present rights for valuation.
Conversion Factor and Valuation Rate:
The correct conversion factor for carpet area to built-up area is 1.2, as per ASR guidelines, not 1.5 as used in the agreement for internal calculations.
Construction cost (Rs. 8,500/sq.m.) should be used for constructed area, not the market sale price (Rs. 24,000/sq.m.).
Revenue Sharing:
Deferred revenue sharing can be considered as part of consideration, but only to the extent it relates to rights actually granted on the date of execution.
Parking Calculation:
Parking requirements must be based on the development area and entitlements available at the time of execution, not on future or contingent development.
Orders Passed
The Court quashed the orders of the Collector of Stamps and the Appellate Authority to the extent they included future/contingent rights and used incorrect valuation methods.
Directed a fresh determination of market value and stamp duty, strictly based on rights and entitlements operative on the date of execution, using the correct conversion factor and construction cost.
The 298 acres (First Schedule) are to be valued as present rights; the 50.23 acres (Second Schedule) are to be excluded unless and until the Swap Notice is exercised.
Implications for Real Estate and Stamp Duty Law
Clarity on Stamp Duty Assessment: The judgment clarifies that only present and operative rights can be considered for stamp duty, not hypothetical or contingent future rights.
Guidance for Drafting JDAs: Developers and landowners must clearly distinguish between present and contingent rights in agreements to avoid inflated stamp duty demands.
Role of ASR Guidelines: Authorities must apply the correct conversion factors and valuation rates as per statutory guidelines, not merely rely on contractual definitions.
Protection Against Arbitrary Valuation: The judgment protects parties from arbitrary and excessive stamp duty assessments based on speculative future events.
Conclusion
This Bombay High Court judgment sets a crucial precedent for the real estate sector, ensuring that stamp duty is levied only on actual, present rights and entitlements, and not on speculative or contingent future benefits. It reinforces the need for strict adherence to statutory guidelines and careful drafting of development agreements.
Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 05.09.2026
Bombay High Court on Rejection of Suit for Joint Ownership of Common Amenities
This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email idjhamadhumita27@gmail.com.
A recent judgment by the Bombay High Court has brought clarity to the rights of cooperative housing societies regarding common amenities and conveyance of property in large residential layouts. The case, involving Laxmi Charitable Trust and several cooperative societies, revolved around the ownership and use of recreation grounds and internal roads within a multi-plot layout in Andheri, Mumbai.
Background of the Dispute
The plaintiffs, three cooperative housing societies, filed a suit seeking joint ownership and conveyance of common amenitiesβspecifically, recreation grounds (RG) and internal access roadsβunder the Maharashtra Ownership Flats Act (MOFA) and its Rules. The societies had already secured deemed conveyance of their respective plots (A, B, and C) but claimed further rights over RGs and roads situated on plots D, E, and F, which were owned by educational trusts.
The defendants, including Laxmi Charitable Trust and Mathuradas Vissanji Female Education Trust, challenged the suit, arguing that:
The trusts acquired ownership of plots D and E before MOFA came into force.
The trusts were not promoters under MOFA and had no statutory obligation to convey land to the societies.
The suit was based on non-existent legal provisions and lacked a valid cause of action.
Key Legal Issues
Cause of Action: Did the societies have a legal basis to claim joint ownership and conveyance of common amenities on plots not owned by them?
Applicability of MOFA: Could MOFA obligations be enforced against trusts that acquired property before the Act’s commencement and were not promoters?
Validity of Cited Rules: The plaintiffs relied on sub-rules (2) and (3) of Rule 9 of the MOF Rules, which, as the Court found, do not exist.
Interpretation of Layout Conditions: Did the sanctioned layout and municipal conditions mandate joint ownership or only maintenance of RGs?
Court’s Analysis and Findings
1. Ownership and Timing
The trusts acquired plots D and E in 1962 and 1963, before MOFA became applicable in Mumbai (1964).
The societies admitted in their pleadings that the trusts were the owners of these plots prior to MOFA.
2. No Statutory Obligation for Conveyance
The trusts were not promoters under MOFA and thus had no statutory duty to convey land or amenities to the societies.
The plaintiffs’ reliance on non-existent sub-rules of Rule 9 was unfounded; Rule 9 only prescribes the period for conveyance, not the obligation to convey common amenities in the manner claimed.
3. Misinterpretation of Layout and FSI
The sanctioned layout required maintenance of RGs but did not mandate joint ownership for the entire layout.
Each society’s building plans and FSI (Floor Space Index) calculations were plot-specific, not based on the entire layout.
The plaintiffs’ claims that RGs and FSI were shared across all plots were contradicted by the sanctioned plans and municipal records.
4. Vexatious Litigation and Lack of Cause of Action
The Court found that the suit was based on false premises and clever drafting, creating an illusion of a cause of action where none existed.
The suit was deemed vexatious and an abuse of the judicial process, as it sought to claim playgrounds used by schools and colleges for the societies’ benefit.
Final Judgment
The Bombay High Court set aside the City Civil Court’s order and allowed the revision applications filed by the trusts and Wallace Flour Mills Co. Ltd.
The plaint in L.C. Suit No. 3712 of 2017 was rejected under Order VII Rule 11 of the Code of Civil Procedure for not disclosing a cause of action.
The suit was dismissed, and all interim applications were disposed of.
Key Takeaways for Housing Societies and Trusts
Statutory Rights Must Be Clearly Established: Societies must base their claims on existing statutory provisions and not on imagined or non-existent rules.
Ownership and Timing Matter: Rights under MOFA cannot be enforced against parties who acquired property before the Act’s commencement and are not promoters.
Layout Conditions Are Binding: Maintenance obligations in sanctioned layouts do not automatically confer ownership rights over common amenities.
Courts Will Dismiss Vexatious Suits: The judiciary will not entertain cleverly drafted suits that lack real substance or are contrary to documentary evidence.
Conclusion
This judgment reinforces the importance of clear legal foundations for property claims and the need for societies to carefully examine statutory provisions and documentary evidence before initiating litigation. It also protects educational trusts and similar entities from unwarranted claims over their properties by neighboring societies.
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Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 02.09.2026
Bombay High Courtβs Analysis of Arbitral Award Challenge under Section 34 of the Arbitration and Conciliation Act, 1996 in a Cotton Supply Dispute
This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email idshobhit.Ica23@gmail.com.
This article examines the Bombay High Courtβs judgment in the arbitration dispute between J. S. Cotton Industries and C. A Galiakotwala & Company Pvt. Ltd., both members of the Cotton Association of India. The case centers on the non-delivery and invoicing back of cotton, the arbitral process under the Associationβs Byelaws, and the legal scrutiny of the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.
Background of the Dispute
Contract and Non-Delivery
On 11 August 2010, the parties entered into a contract for the supply of 600 bales of cotton, with delivery scheduled between 28 November and 5 December 2010.
J. S. Cotton Industries (the Petitioner) failed to deliver the cotton within the agreed period, despite repeated reminders from the Respondent.
The Respondent warned that failure to deliver would result in βinvoicing backβ the cotton at the prevailing market rate, as per the Associationβs Byelaws.
Invoicing Back and Arbitration
After continued non-delivery, the Respondent applied to the Association to fix the invoice back rate, which was set at Rs. 44,800 per candy as of 13 May 2011.
The Respondent issued a debit note for Rs. 41,58,948 plus interest, which the Petitioner did not pay, leading to arbitration.
The Sole Arbitrator initially awarded a lower amount based on a different date, but both parties appealed to the Board of Directors of the Association.
The Board modified the award, granting the Respondent the full claimed amount with interest.
Grounds of Challenge by the Petitioner
The Petitioner challenged the arbitral award in the Bombay High Court on several grounds:
Breach of Natural Justice
Alleged that the invoicing back procedure was not properly followed and that key documents (such as the rate fixation report) were not shared, denying the Petitioner the right to appeal the rate.
Procedural Irregularities
Claimed that the Respondent did not submit necessary supporting documents with the Statement of Claim.
Argued that the contract period was not validly extended and that the invoicing back was based on an incorrect date.
Substance of the Claim
Contended that the Respondent sought delivery of a different type of cotton than what was contracted.
Asserted that the Respondent should have invoked a different Byelaw (No. 74) for invoicing back.
Respondentβs Defense
The Respondent countered that:
Both parties were aware of the Byelaws and the weekly published rates.
The Petitioner was repeatedly notified of the consequences of non-delivery.
The Boardβs decision was based on a plausible interpretation of the evidence and Byelaws.
The type of cotton demanded was consistent with the contract, as clarified by the Associationβs standards.
Courtβs Analysis and Findings
Scope of Judicial Review
The Court reiterated that interference with arbitral awards under Section 34 is limited to exceptional circumstances, such as fraud, corruption, or violation of public policy.
Natural Justice and Byelaw Procedures
The Court found that Byelaw No. 34A provides a self-contained procedure for price fixation and does not require the Committee to share reports or documents with the parties.
The right to appeal the rate fixation was available but not exercised by the Petitioner.
Merits of the Dispute
The Boardβs findings on the type of cotton and the date for invoicing back were supported by the contract and correspondence.
The Court declined to reappreciate evidence, emphasizing the finality of arbitral decisions unless there is a clear violation of law or procedure.
Outcome
The petition was dismissed, upholding the arbitral award in favor of the Respondent.
The Court ordered the release of any deposited amounts and disposed of interim applications.
Key Takeaways for Businesses and Legal Practitioners
Importance of Contractual Compliance
Non-fulfillment of contractual obligations, especially in commodity trades, can lead to significant financial liabilities through mechanisms like invoicing back.
Understanding Association Byelaws
Members of trade associations must be familiar with dispute resolution and price fixation procedures, as these can override general contract law principles.
Limited Scope for Challenging Arbitral Awards
Courts will not interfere with arbitral awards on merits unless there is a clear breach of fundamental legal principles or public policy.
Procedural Diligence
Parties must exercise their rights (such as appeals) within the prescribed timelines and cannot later claim prejudice if they fail to do so.
Conclusion
The J. S. Cotton Industries case underscores the robustness of arbitral processes under trade association byelaws and the judiciaryβs reluctance to interfere with well-reasoned arbitral awards. For businesses, it highlights the need for timely compliance, diligent documentation, and a thorough understanding of industry-specific dispute mechanisms.
Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 02.09.2026
Bombay High Court Quashes Seizure and Security Deposit on Imported Food Consignments Cleared by FSSAI
This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .
The Bombay High Court recently delivered a significant judgment in the case of Shivshakti Enterprises vs. The Commissioner of Customs & Ors. (Writ Petition No. 6043 of 2026), addressing the legality of a seizure and the imposition of a hefty security deposit on imported food consignments. This article provides a comprehensive overview of the case, the legal arguments, the court’s reasoning, and its broader implications for importers and regulatory authorities.
Background of the Case
Shivshakti Enterprises, a sole proprietorship led by Rohit Kumar Somabhai Patel, imported two consignments of Roasted Arecanuts (Beetle Nuts) in March 2026. The goods were examined by customs, and samples were sent to the Food Safety and Standards Authority of India (FSSAI) for testing. On April 10, 2026, FSSAI issued a No Objection Certificate (NOC), confirming the goods met the standards under the Food Safety and Standards Act, 2006 (FSS Act).
Despite the NOC, customs authorities did not release the goods. Instead, further testing was conducted by the Central Revenue Control Laboratory (CRCL), which found the moisture content to be 6.8% and 6.9%. Subsequently, the goods were seized, and the petitioner was asked to provide a bank guarantee of Rs. 40,00,000 for provisional release. Shivshakti Enterprises challenged both the seizure and the security deposit requirement in the Bombay High Court.
Key Legal Issues
Authority of FSSAI vs. Customs: Whether a NOC from FSSAI is conclusive for the release of imported food items, or if customs can impose additional requirements.
Requirement of Security Deposit: Whether demanding a bank guarantee for provisional release is justified when FSSAI has already cleared the goods.
Arguments Presented
Petitionerβs Stand:
Once FSSAI issues a NOC, further examination by customs or CRCL is unwarranted.
The requirement for a bank guarantee is excessive and not supported by law, especially in light of previous judgments.
Cited precedents: NBG International Pvt. Ltd. v. Union of India and similar cases from Calcutta, Punjab & Haryana, and Madras High Courts, all supporting the primacy of FSSAIβs clearance.
Respondentsβ Stand:
Customs retains the right to verify the nature, description, and tariff classification of goods, regardless of FSSAIβs NOC.
The NOC pertains only to food safety, not customs classification or duty assessment.
The seizure and security deposit were justified due to ongoing disputes about classification and compliance.
Courtβs Analysis and Reasoning
The High Court found that the issue was squarely covered by its earlier decision in NBG International Pvt. Ltd. The court emphasized:
Finality of FSSAIβs NOC: Once FSSAI certifies that goods conform to food safety standards, customs authorities should not withhold release on the same grounds.
Laboratory Analysis Procedure: The FSSAIβs process for laboratory analysis is robust, transparent, and time-bound, ensuring high standards for food imports.
No Scope for Reclassification: After FSSAIβs clearance, customs cannot arbitrarily reclassify or detain goods on similar grounds.
The Judgment
The Bombay High Court ordered:
Quashing of Seizure and Security Deposit: The seizure memo dated May 19, 2026, and the order requiring a Rs. 40,00,000 bank guarantee were set aside.
Immediate Release of Goods: Customs was directed to release the goods without insisting on a bank guarantee.
Renewed FSSAI Certification: The petitioner must obtain a fresh Certificate of Fitness from FSSAI before selling the goods, as they had been stored for several months.
No Order as to Costs: Each party was to bear its own costs.
Implications of the Judgment
For Importers: The judgment reinforces the authority of FSSAI in food safety matters and protects importers from arbitrary or duplicative actions by customs.
For Customs Authorities: Customs must respect FSSAIβs findings and cannot impose additional requirements unless there is a clear legal basis.
For Regulatory Clarity: The decision harmonizes the roles of different regulatory bodies, reducing delays and uncertainty in the import process.
Conclusion
The Shivshakti Enterprises judgment is a landmark in balancing regulatory oversight with trade facilitation. It underscores the importance of respecting specialized authoritiesβ findings and provides much-needed clarity for importers navigating Indiaβs complex regulatory landscape.
Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 01.09.2026
Bombay High Court Orders Refund of Pre-Deposit for Dropped GST Demand Despite Pending Appeal
This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email idjhamadhumita27@gmail.com.
A recent judgment by the Bombay High Court in the case of IBM India Pvt. Ltd. vs. Union of India has clarified the legal position regarding the refund of pre-deposit amounts under the Goods and Services Tax (GST) regime. This article provides a detailed analysis of the case, the legal issues involved, and the implications for taxpayers facing similar disputes.
Background of the Case
IBM India Pvt. Ltd. challenged an order rejecting its application for a refund of the pre-deposit paid during GST appellate proceedings. The company had initially faced a tax demand of approximately Rs. 48.96 crores, which was later reduced by 64% (to Rs. 17.50 crores) by the First Appellate Authority. IBM sought a refund of the pre-deposit corresponding to the dropped demand (Rs. 3.14 crores), but the refund was denied on the grounds that appellate proceedings had not attained finality, as IBM intended to further appeal the portion of the order that went against it.
Key Legal Issues
Finality of Appellate Proceedings:
The tax authorities argued that a refund of pre-deposit is only permissible once all appellate proceedings are concluded, citing Circular No. 125/44/2019-GST.
IBM contended that the refund claim pertained only to the portion of the demand dropped, which was not under further dispute.
Distinction Between Disputed and Undisputed Amounts:
The authorities maintained that since IBM intended to appeal the adverse portion, the entire proceedings lacked finality.
The High Court clarified that finality is achieved for the portion of the demand that is not being challenged further, and the taxpayer is entitled to a refund of the pre-deposit corresponding to that portion.
Nature of Pre-Deposit:
The Court reiterated that pre-deposit is not a tax or duty but a security deposit, which must be refunded if the taxpayer succeeds (fully or partly) in appeal.
Court’s Findings and Order
The Court found the tax authority’s reasoning erroneous, stating that only the portion of the order being further appealed lacks finality. For the dropped demand (Rs. 31.45 crores), the proceedings had attained finality, and IBM was entitled to a proportionate refund of the pre-deposit.
The Court quashed the impugned order and directed the authorities to process and refund Rs. 3.14 crores to IBM within six weeks.
IBM graciously waived its claim for statutory interest on the refund, focusing only on the principal amount.
Implications for Taxpayers
Clarity on Refund Eligibility:
Taxpayers can claim a refund of pre-deposit amounts corresponding to the portion of demand dropped in appeal, even if they intend to challenge the remaining adverse portion.
Administrative Guidance:
Tax authorities must distinguish between the finality of different portions of an appellate order and process refunds accordingly.
Legal Precedent:
This judgment sets a precedent for similar cases, ensuring that taxpayers are not unjustly denied refunds due to ongoing disputes on unrelated portions of the demand.
Conclusion
The Bombay High Court’s decision in IBM India Pvt. Ltd. vs. Union of India is a significant development in GST litigation. It upholds the taxpayer’s right to a timely refund of pre-deposit amounts for demands set aside in appeal, providing much-needed clarity and relief to businesses navigating the appellate process under GST.
Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 31.08.2026
Scope of Agent’s Lien and Interim Relief in Multi-Contract Tank Container Disputes
This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email idshobhit.Ica23@gmail.com.
A recent judgment by the Bombay High Court in the case of Limited Liability Company βLTBβ vs. Shri Vaibhavi Logistics and others has clarified important legal principles regarding the recovery and custody of tank containers in commercial disputes involving multiple contracts and parties. This article provides a detailed analysis of the case, the legal issues involved, and the implications for businesses engaged in logistics, agency, and container leasing agreements.
Background of the Dispute
Parties Involved:
Petitioner: Limited Liability Company βLTBβ, owner and operator of 138 tank containers.
Respondents: Shri Vaibhavi Logistics (Indian agent), E F C Logistics India Pvt Ltd, JMJ Container Solution, and Kashipur Infrastructure And Freight Terminal Pvt Ltd (depots holding the containers).
Agreements in Question:
Agency Agreement (4 March 2021): Appointed Respondent No.1 as LTBβs agent in India for 138 tanks.
Master Tank Container Lease Agreement (20 November 2023): Lease of containers.
Agency Agreement (8 December 2020): Appointed LTB as agent in Russia.
Nature of Dispute:
LTB sought interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, for the unconditional release of its 138 tank containers from the depots.
Respondent No.1 claimed a lien over the containers for alleged dues under other agreements.
Key Legal Issues Addressed
Can a party exercise a lien over goods under one contract to secure claims from another contract?
Is a composite petition maintainable when claims arise from multiple agreements with separate arbitration clauses?
Can interim relief be granted against parties (depots) not signatory to the arbitration agreement?
Courtβs Analysis and Findings
1. Lien and Cross-Contractual Claims
The Court held that unless expressly provided in the contract, a party cannot retain goods handed over under one contract to secure claims from another contract.
Section 221 of the Indian Contract Act, 1872, allows an agent to retain the principalβs property only for dues arising from services related to that property (particular lien), not for unrelated claims (general lien).
No clause in the 4 March 2021 agreement permitted Respondent No.1 to retain the tanks for dues under other agreements.
2. Composite Petitions and Arbitration Clauses
The Supreme Courtβs decision in Duro Felguera, S.A. v. Gangavaram Port Limited was cited: separate contracts with independent arbitration clauses cannot be combined into a single arbitral reference.
The Petitioner was allowed to restrict its claim to the 4 March 2021 agreement and pursue other claims separately.
3. Relief Against Non-Signatory Depots
The Court clarified that interim relief under Section 9 can be granted against parties in possession of the subject matter (the tanks), even if they are not signatories to the arbitration agreement, provided the property is directly connected to the dispute.
Depots holding the tanks were ordered to release them to the Petitioner, subject to certain conditions (e.g., security for service charges claimed by one depot).
Final Orders and Directions
β’ The Petition was partly allowed:
Release of Containers: Depots (Respondents 2β4) must release the tanks to LTB, except for four tanks with Respondent No.4, which require security for service charges.
No Cross-Contractual Lien: Respondent No.1 cannot retain the tanks for dues under other agreements.
Disclosure of Missing Tanks: Respondent No.2 must disclose the whereabouts of two missing tanks.
Commencement of Arbitration: LTB to initiate arbitration under the 4 March 2021 agreement.
Other Claims: Monetary claims and other reliefs under different agreements to be pursued separately.
Implications for Businesses
Contract Drafting: Ensure clear provisions regarding lien, retention, and cross-contractual rights in agency and logistics agreements.
Arbitration Strategy: Claims under separate agreements with distinct arbitration clauses should be pursued independently.
Interim Relief: Courts can grant interim protection for property central to the dispute, even against non-signatories in possession.
Conclusion
This judgment reinforces the importance of precise contractual drafting and clarifies the limits of lien and interim relief in multi-party, multi-contract commercial disputes. Businesses should review their agreements and dispute resolution strategies in light of these principles to safeguard their interests in similar situations.
Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 31.08.2026
Bombay High Court Sets Aside Patent Refusal for Lack of Reasoned Order and Remands for Fresh Consideration under Section 117A of the Patents Act, 1970
This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .
The Bombay High Court recently delivered a significant judgment in the case of Deepak Nitrite Limited vs. The Assistant Controller of Patents & Designs. This case revolved around the refusal of a patent application for a novel food-grade sodium nitrite and its production method. The judgment not only impacts the parties involved but also sets important precedents for patent examination standards in India.
Background of the Case
Deepak Nitrite Limited filed a patent application (No. 202021019409) for “A Free-Flowing Food Grade Sodium Nitrite and Production Method Thereof.” The Assistant Controller of Patents & Designs, Mumbai, refused the application under Section 15 of the Patents Act, 1970, citing lack of inventive step as per Section 2(1)(ja) of the Act. The refusal was based on the assertion that the claimed reduction in impurities was common general knowledge and that the process steps were routine laboratory procedures.
Key Arguments Presented
Petitionerβs Submissions
Product Claims (Claims 1-3):
The claimed product was distinguished from prior art by its unique impurity profile, crucial for achieving food-grade quality.
The Controllerβs order failed to cite any authoritative source for the alleged “common general knowledge” and did not analyze whether the specific impurity profile was disclosed or suggested in prior art.
Process Claims (Claims 4-8):
The process involved a synergistic combination and specific sequencing of steps, not merely routine filtration.
The Controller isolated a single step (filtration) and ignored the inventive contribution of the integrated process.
Legal Precedents:
The petitioner cited several judgments emphasizing the need for a reasoned analysis, identification of inventive concepts, and proper assessment of common general knowledge.
Respondentβs Submissions
The Respondent defended the refusal, arguing that the order was passed after due examination.
Upon judicial questioning, the Respondent conceded that the order lacked independent analysis of the process claims and that it would have been more appropriate to consider the invention as a whole.
Courtβs Analysis and Findings
On Common General Knowledge:
The Court held that invoking “common general knowledge” without citing identifiable sources is impermissible and arbitrary.
The Controller must substantiate such assertions with published sources predating the patent application.
On Reasoned Orders:
The Court criticized the recurring pattern of non-speaking, inadequately reasoned orders from the Patent Office.
It emphasized the mandatory obligation of Controllers to provide well-reasoned, speaking orders that demonstrate independent application of mind and address all objections and responses.
On Remand and Future Conduct:
The Court set aside the impugned order and remanded the matter for fresh consideration by a different Controller.
It directed that the application be decided within twelve weeks, ensuring compliance with the standards outlined in the judgment.
Broader Implications
This judgment highlights systemic issues in patent examination, such as:
Failure to provide applicants a fair opportunity to address objections.
Lack of independent reasoning and mechanical reproduction of prior art or objections.
The need for transparency and accountability in quasi-judicial decisions.
The Courtβs directions reinforce the importance of reasoned decision-making and adherence to natural justice principles in the patent grant process. The judgment is expected to influence future conduct of the Patent Office and improve the quality of patent examination in India.
Conclusion
The Bombay High Courtβs decision in Deepak Nitrite Limited vs. Assistant Controller of Patents & Designs is a landmark ruling that strengthens procedural safeguards for patent applicants. It underscores the judiciaryβs commitment to upholding fairness, transparency, and reasoned analysis in intellectual property adjudication.
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Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 26.08.2026
Guidelines for Renewal and Re-Issuance of Passports to Indian Citizens Facing Pending Criminal Proceedings: Legal Principles and Directions from the Bombay High Court
This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email idjhamadhumita27@gmail.com.
Passport renewal for Indian citizens involved in criminal proceedings has long been a complex issue, often leading to confusion, delays, and hardship. A recent judgment by the Bombay High Court provides much-needed clarity, balancing the right to personal liberty with the interests of justice. This article explores the key legal principles, statutory framework, and practical guidelines established by the Court for passport renewal in such cases.
Constitutional and Legal Framework
Fundamental Right to Travel: The right to travel abroad is protected under Article 21 of the Constitution of India as part of the right to life and personal liberty. The Supreme Court has repeatedly affirmed that this right cannot be arbitrarily curtailed.
Passports Act, 1967: This Act governs the issuance, renewal, and revocation of passports. Key sections include:
Section 5: Outlines the procedure for applying for a passport.
Section 6(2)(f): Allows refusal of a passport if criminal proceedings are pending against the applicant.
Section 10: Details the grounds and process for impounding or revoking a passport.
Section 22: Empowers the government to issue exemptions in public interest.
Relevant Notifications and Office Memoranda:
GSR 570(E) Notification (25 August 1993): Exempts applicants with pending criminal cases from the bar under Section 6(2)(f) if they produce a court order permitting travel.
Office Memorandum (10 October 2019): Provides detailed instructions for processing passport applications where criminal proceedings are pending.
Key Judicial Observations
Supreme Court and High Court Rulings
Not an Absolute Bar: The existence of pending criminal proceedings does not automatically disqualify a person from renewing their passport. The courts have clarified that Section 6(2)(f) is not an absolute bar, especially when the applicant is not seeking to travel abroad immediately.
Role of the Criminal Court: The criminal court’s primary concern is to ensure the accused’s presence during trial. Permission to travel abroad is distinct from the right to hold a valid passport.
Duration of Renewal: Unless otherwise directed by the court, passports should be renewed for the standard period (usually 10 years) as per Rule 12 of the Passport Rules, 1980.
NOC/Permission: A No Objection Certificate (NOC) from the court is generally required only when the applicant seeks to travel abroad, not for mere renewal.
Practical Guidelines from the Bombay High Court Judgment
The Court issued several actionable suggestions to streamline the process:
Standard Renewal: Passport authorities should renew passports in accordance with Rule 12, unless a court order specifies otherwise.
Undertaking and Affidavit: Applicants must file an undertaking and affidavit, verified by the concerned criminal court, detailing all pending cases.
NOC Details: The NOC should include:
Case details and status
Stage of trial
Number of witnesses
Compliance with court orders
Attendance record of the accused
Serious Offences: For serious or economic offences, the court may scrutinize the application more closely and issue the NOC on its judicial side.
Fresh Passport Applications: For first-time applicants, the passport authority should not insist on a court NOC and must follow the standard procedure under the Act.
Exhausted Passports: If the passport booklet is exhausted, renewal should be processed without requiring a court NOC, subject to court orders regarding travel.
Travel Abroad: Even after renewal, the applicant must seek court permission before traveling abroad if restrictions are imposed.
Distinction Between Passport Renewal and Travel Permission
The judgment emphasizes that holding a valid passport and traveling abroad are separate issues:
Renewal: The right to renew a passport is not automatically curtailed by pending criminal proceedings.
Travel: Permission to leave the country is at the discretion of the criminal court, which may impose conditions to ensure the accused’s presence during trial.
Recommendations for Passport Authorities
Avoid Unnecessary Objections: Passport authorities should not raise objections to renewal solely on the ground of pending criminal cases if the applicant complies with the Act and Rules.
Fair and Transparent Process: As a state authority, the passport office must act fairly and transparently, minimizing inconvenience to citizens.
Review of Notifications: The authorities are encouraged to reconsider existing notifications to further streamline the process and avoid unnecessary litigation.
Conclusion
The Bombay High Court’s judgment provides a balanced and practical approach to passport renewal for individuals facing criminal proceedings. By clarifying the roles of the passport authority and the criminal court, and by emphasizing procedural fairness, the Court has ensured that fundamental rights are protected while upholding the interests of justice. Applicants and legal practitioners should closely follow these guidelines to navigate the process efficiently.
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Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 25.08.2026
Constitutional Validity of RERA Upheld by the Bombay High Court
This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email idamitnaren@outlook.com.
The Bombay High Court’s decision in Neelkamal Realtors Suburban Pvt. Ltd. & Anr. v. Union of India & Ors. is a pivotal ruling on the constitutional validity of the Real Estate (Regulation and Development) Act, 2016 (RERA). This article provides a comprehensive overview of the case, including its background, legal issues, arguments, judgment, and its implications for real estate and housing regulation in India.
Background
The case arose from a batch of writ petitions filed by real estate developers and other stakeholders challenging several provisions of RERA and the Maharashtra Real Estate (Regulation and Development) Rules, 2017. The petitioners contended that certain provisions of RERA were unconstitutional, particularly as they applied to ongoing projects that had not received completion certificates by the time RERA came into force.
Key Legal Issues
Retrospective/Retroactive Application: Whether RERA’s provisions, especially those requiring registration of ongoing projects, amounted to retrospective or retroactive legislation affecting vested rights.
Reasonableness and Arbitrariness: Whether the restrictions imposed by RERA on promoters were unreasonable or arbitrary, violating Articles 14 (equality), 19(1)(g) (freedom to practice any profession), and 20 (protection against ex post facto laws) of the Constitution.
Judicial Member Requirement: Whether the composition of the RERA Authority and Appellate Tribunal required the presence of judicial members.
Penal and Compensatory Provisions: Whether the penalties and compensation mechanisms under RERA were penal in nature and applied retrospectively.
Arguments Presented
Petitioners (Developers and Promoters)
Retrospective Impact: Argued that applying RERA to ongoing projects interfered with existing contracts and imposed new obligations retroactively, which was unconstitutional.
Unreasonable Restrictions: Claimed that provisions like mandatory deposit of 70% of collections in a separate account, limited extension for project completion, and stringent penalties were arbitrary and did not balance the interests of promoters and allottees.
Lack of Judicial Members: Contended that the absence of mandatory judicial members in the Authority and Tribunal undermined the fairness of dispute resolution.
Respondents (Union of India, State of Maharashtra, Allottees)
Prospective Operation: Maintained that RERA’s obligations were prospective, applying only after registration, and did not affect vested rights or completed transactions.
Public Interest and Consumer Protection: Emphasized that RERA was enacted to address widespread malpractices, delays, and lack of accountability in the real estate sector, protecting consumers’ interests.
Balanced Regulation: Asserted that RERA struck a balance between the rights of promoters and allottees, with mechanisms for both parties to seek redress.
The Judgment
The Bombay High Court upheld the constitutional validity of the challenged provisions of RERA and the Maharashtra Rules, with one exception:
Registration of Ongoing Projects: The Court held that requiring ongoing projects (without completion certificates) to register under RERA was not retrospective in the true sense. Promoters could declare new timelines for completion, and the law did not affect vested rights or completed contracts.
Reasonableness of Restrictions: The Court found that the restrictions imposed by RERA, such as the 70% deposit rule and limited extension for project completion, were reasonable and in the public interest. These measures aimed to prevent diversion of funds and ensure timely completion.
Penalties and Compensation: The Court clarified that interest and compensation provisions were compensatory, not penal, and operated prospectively. Penalties for violations applied only to acts after RERA’s commencement.
Judicial Members in Tribunal: The Court struck down part of Section 46(1)(b) of RERA, which allowed members of the Indian Legal Service (with the rank of Additional Secretary) to be appointed as judicial members of the Appellate Tribunal. The Court mandated that the Tribunal must always have a majority of judicial members.
Implications for Real Estate and Housing Regulation
Strengthened Consumer Protection: The judgment reinforced RERA’s role in protecting homebuyers, ensuring transparency, accountability, and timely delivery of projects.
Regulatory Certainty: By upholding most provisions, the Court provided clarity and stability for the real estate sector, encouraging compliance and professionalization.
Balanced Approach: The decision recognized the need to balance the interests of promoters and allottees, allowing promoters to set new completion timelines for ongoing projects while safeguarding buyers’ rights.
Judicial Oversight: The requirement for judicial members in the Appellate Tribunal enhances the fairness and credibility of dispute resolution under RERA.
Conclusion
The Neelkamal Realtors judgment is a landmark in Indian real estate law, affirming the constitutional validity of RERA and setting a precedent for regulatory oversight in the sector. It marks a significant step toward a more transparent, accountable, and consumer-friendly real estate market in India.
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Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 23.08.2026
Bombay High Court Upholds FTA Primacy: A Landmark Ruling on Third-Party Invoicing and Preferential Duty for Importers
This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .
A highly prominent case that directly addresses the wrongful disallowance of Free Trade Agreement (FTA) benefits by the Customs Department for an importer dealing with Chapter 38 products (Miscellaneous Chemical Products) is the landmark decision by the Hon’ble Bombay High Court in M/s Covestro India Private Limited vs. Assistant Commissioner of Customs.
The core legal principles established in this matter, alongside other critical judicial precedents, favor importers facing FTA denials.
1. Key Case Analysis: Covestro India Pvt. Ltd. (Bombay High Court)
The Product Focus: The importer (Covestro India) regularly imports chemical products, polycarbonate resins, and raw materials falling under Chapter 39 and Chapter 38.
The Customs Dispute: The Customs Department denied the preferential rate of duty claimed under the ASEAN-India Free Trade Agreement (AIFTA). Customs cited Section 28DA of the Customs Act and Rule 5(5) of CAROTAR 2020, raising technical doubts because the Certificate of Origin (COO) reflected the Free on Board (FOB) value while the commercial invoice listed the Cost, Insurance, and Freight (CIF) value.
The Department’s Basis: Customs relied on local Public Notice No. 33/2024 to demand the original manufacturerβs invoice and price breakup, failing which they unilaterally denied the FTA benefit. [3, 6, 8]
The Courtβs Ruling in Favor of the Importer:
Invalidation of Local Restrictive Notices: The High Court quashed and set aside the Customs order. It held that the Customs Department cannot issue local Public Notices or instructions that dilute or alter the strict legal provisions of international treaties (FTAs).
Acceptance of Third-Party Invoicing: The Court firmly reiterated that third-party invoicing is globally accepted under major FTAs. Importers cannot be heavily penalized or denied benefits simply because an intermediary handles the commercial invoice, provided the origin of the goods is authentically established.
Mandatory Procedure Over Unilateral Rejection: Customs cannot summarily reject a validly issued Certificate of Origin (COO). If they harbor doubts regarding the origin or value alignment (FOB vs. CIF), they are legally obligated to invoke the verification/retroactive check process with the issuing authority of the partner country, rather than passing a definitive adverse order immediately.
Importers of Chapter 38 products can use several other strong, parallel rulings to counter customs disallowances:
Commissioner of Customs, Chennai vs. K B Autosys India Pvt. Ltd. (CESTAT)
Context: Involved chemical/friction mixture mixtures claimed under HS Code 3824.
Ratio: The tribunal ruled that the Customs Department cannot arbitrarily alter classification entries merely to strip an importer of an active FTA benefit, emphasizing that if the essential characteristics fulfill the declared tariff heading, the exemption under Notification No. 152/2009-Cus must be granted.
Purple Products vs. Union of India (Bombay High Court)
Ratio: The court ruled against unilateral, aggressive actions taken by Indian Customs officials to deny treaty benefits before exhausting the formal treaty-based Dispute Resolution Mechanism or verification provisions outlined inside the FTA.
3. Core Legal Defenses for Importers to Raise
If your Chapter 38 import is experiencing an FTA disallowance under CAROTAR 2020, structure your defense on these points:
CBIC Instruction No. 23/2024 Compliance: Remind the adjudicating authorities that CBIC guidelines explicitly dictate that commercial confidentiality must be respected. Importers are not legally bound to disclose proprietary manufacturer invoices or back-to-back cost breakdowns.
Treaty Supremacy: Argue that international FTA treaty terms override any conflicting domestic procedural restrictions under CAROTAR.
No Merely Clerical Denials: Discrepancies between the currencies used or nominal description differences do not nullify a validly sealed COO.
M/s Covestro India Private Limited v. Assistant Commissioner of Customs & Ors.
1. Case Details, Parties, and Judicial Forum
Case Title:Β M/s Covestro India Private Limited v. Assistant Commissioner of Customs & Ors.
Petitioner:Β Covestro India Private Limited
Respondents:
Assistant Commissioner of Customs, Group II (G), NS-I, JNCS, Nhava Sheva
Commissioner of Customs (NS-III), Turant Suvidha Kendra, JNCH, Nhava Sheva
Union of India (Secretary, Dept.Β of Revenue, Ministry of Finance)
Judicial Forum:Β High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Bench:Β Justices G. S. Kulkarni & Aarti Sathe
Date of Judgment:Β 16th April 2026
2. Case Summary & HSN Code(s) in Dispute
Background:Β Covestro India imported goods (polycarbonate resins, specialty film rolls, etc.)Β from Thailand, claiming preferential duty under Notification No. 46/2011 (ASEAN-India Free Trade Agreement, AIFTA).
Dispute:Β Customs authorities denied the preferential rate, citing non-compliance with requirements in Public Notice No.Β 33/2024, particularly regarding third-party invoicing and FOB value documentation.
HSN Codes:Β The dispute involved classification and eligibility for preferential duty under specific HSN codes as per the Bills of Entry and FTA certificates (exact HSN codes not specified in the summary, but relate to polycarbonate resins and specialty films).
3. Arguments of the Parties
Petitioner (Covestro India):
Claimed eligibility for preferential duty based on valid Country of Origin (CoO) certificates from Thailand.
Challenged the legality and jurisdiction of Public Notice No. 33/2024, arguing it imposed additional requirements not supported by law or the FTA.
Argued that subsequent CBIC instructions and public notices superseded the earlier notice and clarified that third-party invoicing is permissible.
Asserted that denial of benefit was mechanical and not in accordance with law.
Respondents (Customs Authorities):
Justified denial of preferential duty based on Public Notice No. 33/2024, which required additional documentation for third-party invoicing.
Argued that the petitioner failed to provide the required exporter’s invoice and breakdown of values, leading to doubts about the actual FOB value and eligibility for FTA benefits.
4. Key Statutory Provisions Considered
Customs Act, 1962:
Section 28DA: Procedure regarding claim of preferential rate of duty
CAROTAR, 2020:
Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020
Rule 5(5): Denial of preferential claim without further verification if sufficient evidence exists
In case of conflict, the provisions of the trade agreement (AIFTA) prevail over CAROTAR and public notices.
Legality of Public Notices:
Public notices cannot override or dilute statutory provisions or CBIC instructions.
Third-Party Invoicing:
Explicitly allowed under AIFTA; denial of benefit solely on this ground is not permissible.
Requirement of Verification:
Preferential claims cannot be denied without following the due process of verification as per the agreement and CAROTAR.
Natural Justice:
Orders affecting rights must be passed after giving an opportunity to be heard and following due process.
6. Order of the Court
The impugned order dated 12th June 2024 (denying preferential duty) is quashed and set aside.
Assessment proceedings are remanded to the Assistant Commissioner of Customs for fresh assessment in accordance with law and the latest CBIC instructions.
All contentions of the parties are kept open for reconsideration.
Similar orders passed in connected writ petitions.
7. Message for Importers/Exporters & Impact on Trade
Key Takeaways:
Customs authorities must strictly follow the provisions of trade agreements and CBIC instructions; local public notices cannot impose additional requirements.
Third-party invoicing is permissible under AIFTA and similar FTAs, provided origin criteria are met.
Importers should ensure all required documents (CoO, invoices, etc.) are in order, but cannot be compelled to provide commercially confidential information not required by law.
Any denial of preferential benefit must follow due process, including verification and opportunity to be heard.
Impact:
The ruling reinforces legal certainty for importers/exporters using FTAs, prevents arbitrary denial of benefits, and ensures smoother trade operations by upholding the primacy of central instructions and trade agreements over local administrative notices.
8. Key Citations Referred in the Case
1. Statutory Provisions and Notifications
a. Customs Act, 1962
Section 28DA: Governs the procedure for claiming preferential rate of duty under trade agreements, including requirements for declarations, documentation, and verification.
b. CAROTAR, 2020
Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020: Lays down the process for determining origin of goods and the obligations of importers and customs authorities.
Rule 5(5): Allows denial of preferential claim without further verification if sufficient evidence exists.
c. Relevant Notifications
Notification No. 46/2011 (Customs): Provides for preferential rate of duty for goods imported from specified countries under FTAs.
Notification Nos. 85/2004, 101/2004, 153/2009, 189/2009: Earlier notifications governing preferential duty and rules of origin under various FTAs.
d. CBIC Circulars and Instructions
Circular No. 38/2020: Clarifies operational procedures for rules of origin under trade agreements.
Instruction No. 23/2024-Customs: Clarifies that third-party invoicing is permissible under AIFTA and that denial of preferential benefit must follow due process.
e. Public Notices
Public Notice No. 33/2024: Imposed additional requirements for third-party invoicing, later found to be inconsistent with central law and superseded.
Public Notice No. 55/2024: Issued revised guidelines for verification under CAROTAR, 2020.
Public Notice No. 10/2025: Incorporated CBIC’s clarifications and superseded earlier local notices.
2. Key Judicial and Administrative Principles Cited
a. Article 22 of Operational Certification Procedures (AIFTA)
Allows third-country invoicing, provided the product meets the origin criteria under AIFTA Rules of Origin.
b. Section 151A of the Customs Act
Empowers only the CBIC to issue binding instructions to customs officers, reinforcing that local public notices cannot override central law or instructions.
c. CBIC Instruction No. 19/2022-Customs
Reiterates that in case of conflict, the provisions of the trade agreement prevail over CAROTAR and local administrative instructions.
3. Short Summary of Each Citation
Section 28DA, Customs Act, 1962: Sets out the process for claiming preferential duty, including documentation, verification, and the rights of importers and customs.
CAROTAR, 2020: Provides detailed rules for administration of origin under trade agreements, including when and how customs can seek further information or deny claims.
Notification No. 46/2011 (Customs): The main notification under which Covestro India claimed preferential duty for imports from Thailand.
CBIC Circular No. 38/2020: Clarifies the process for customs officers and importers regarding rules of origin and documentation.
Instruction No. 23/2024-Customs: Central instruction clarifying that third-party invoicing is allowed and that denial of benefit must follow due process, not be based on local notices.
Public Notice No. 33/2024: Local customs notice imposing extra requirements for third-party invoicing, later found to be ultra vires and superseded.
Public Notice No. 55/2024 & 10/2025: Revised and clarified the process for verification and assessment, aligning with central instructions.
Article 22, AIFTA Procedures: Explicitly allows third-country invoicing under the FTA.
Section 151A, Customs Act: Restricts the power to issue binding instructions to the CBIC, not local customs commissioners.
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