Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 12.09.2026
CESTAT Mumbai: EPCG Duty Demand Cannot Survive Once DGFT Issues EODC Confirming Fulfilment of Export Obligation
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 .
In a significant ruling concerning imports under the Export Promotion Capital Goods (EPCG) Scheme, the CESTAT Mumbai has set aside the customs duty demand, redemption fine and penalties imposed upon Unison Hotels Limited and its Managing Director, Umesh Saraf, in relation to the import of a Honda CR-V under an EPCG authorization.
The Tribunal held that the alleged violation of EPCG conditions could not legally survive once the competent DGFT authority had issued an Export Obligation Discharge Certificate (EODC) in favour of the importer.
Background of the Dispute
Unison Hotels Limited is engaged in providing hotel-related services. For its business operations, it obtained EPCG authorizations from the Directorate General of Foreign Trade for importing four vehicles as capital goods while availing concessional customs duty benefits. One Honda CR-V was imported through Mumbai Sea Port, while three BMW cars were imported through Chennai Sea Port.
The Department initiated investigation on the basis of information alleging that the vehicles were being used as private vehicles for the personal use of the Managing Director and his family members rather than for commercial purposes connected with earning foreign exchange and fulfilling the prescribed export obligation.
In respect of the Honda CR-V imported through Mumbai, a show cause notice dated 30 August 2011 sought recovery of customs duty of βΉ9,41,922 along with interest, besides confiscation and penalties. The adjudicating authority confirmed the demand, ordered confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962, permitted redemption on payment of a fine of βΉ7 lakh, and imposed penalties of βΉ1.50 lakh on Unison Hotels and βΉ1 lakh on Umesh Saraf. The Commissioner (Appeals) upheld the order.
Issue Before CESTAT
The principal question before the Tribunal was whether the appellants had violated the conditions of the EPCG authorization and consequently failed to satisfy the requirements of Notification No. 97/2004-Customs dated 17 September 2004, under which concessional customs duty had been availed for import of the Honda CR-V.
The EPCG authorization required the importer, among other things, to fulfil an export obligation equivalent to eight times the duty saved within eight years and comply with the actual-user condition. In respect of the Honda CR-V, the authorization recorded an export obligation connected with the imported vehicle and required fulfillment through use of the imported capital goods.
Appellants Relied on Earlier Chennai CESTAT Decision
The appellants argued that an identical dispute involving the other three BMW cars imported under the same EPCG arrangement had already been decided in their favour by a coordinate Bench of CESTAT Chennai through Final Order Nos. 40598-40599/2023 dated 21 July 2023. They contended that the facts and legal issues relating to the Honda CR-V were materially identical and therefore the same reasoning ought to apply.
The Mumbai Bench accepted this contention, observing that the factual matrix relating to the Honda CR-V was exactly similar to that relating to the BMW cars already adjudicated by the coordinate Bench. It consequently held that it could not take a different view in relation to the same appellants and substantially identical EPCG conditions.
Revenue’s Allegation Found Premature
The Tribunal reproduced the reasoning adopted in the earlier proceedings, where it had been held that initiation of proceedings before expiry of the period available for fulfilment of the export obligation was premature. The EPCG authorization allowed eight years for fulfilment of the export obligation, whereas the show cause proceedings were initiated well before that period had expired.
The earlier Bench had also found that the importer had declared substantial foreign-exchange earnings, which were not disputed by the Revenue. The Tribunal emphasized that the essential inquiry was whether the imported capital goods had satisfied the actual-user requirement, and observed that the existence of foreign-exchange earnings supported the appellant’s case.
It further noted that allegations concerning vehicle registration, insurance or parking arrangements were matters primarily within the jurisdiction of the concerned transport or other authorities and could not, by themselves, establish a violation of EPCG conditions enforceable by Customs.
DGFT’s EODC Became Crucial
A decisive factor in the Mumbai proceedings was that the DGFT had eventually issued the EODC/Redemption Letter on 11 January 2024 in respect of the relevant EPCG authorization.
The Tribunal recorded that the appellants had furnished the vehicle’s installation certificate, registration certificate showing the Honda CR-V as a βTourist Taxi Deluxeβ, details of foreign-exchange earnings and repeated requests for issuance of the EODC.
The Bench held that once the competent DGFT authority had issued the EODC, the allegation of non-compliance with EPCG conditions under Notification No. 97/2004-Customs could no longer legally sustain. It also noted that the importer had asserted fulfillment of the export obligation even during the original proceedings and that DGFT had subsequently formally discharged the obligation.
The Tribunal further observed that non-production of the EODC during the earlier adjudication and appellate proceedings could not be held against the appellants because the certificate had not yet been issued by DGFT and the delay was beyond their control.
Earlier Judicial Authorities Considered
The Tribunal also referred to several earlier decisions dealing with EPCG imports and actual-user requirements. Among them was Goldfinch Hotels Pvt. Ltd. v. Commissioner of Customs, 2015 (328) E.L.T. 282 (Tri.-Mumbai), where CESTAT had held that mere parking of an EPCG vehicle at a particular place or statements of drivers could not, without more, establish breach of the actual-user condition. The Bombay High Court later dismissed Revenue’s appeal against that decision.
The order also refers to Vadilal Chemicals Ltd. v. State of Andhra Pradesh, 2005 (192) E.L.T. 33 (S.C.), and M Far Hotels Ltd. v. Union of India, 2011 (270) E.L.T. 158 (Ker.), in the context of EPCG benefits and compliance with prescribed statutory or policy conditions.
The Tribunal additionally referred to the Delhi High Court’s ruling in Interglobe Enterprises Ltd. v. Union of India, 2006 (203) E.L.T. 202 (Del.), as followed in subsequent EPCG litigation, noting that the Supreme Court had dismissed the Revenue’s SLP in the connected matter.
CESTAT’s Final Ruling
The Mumbai Bench concluded that the order sustaining the customs duty demand, redemption fine and penalties was not legally sustainable. It therefore set aside the impugned order and allowed both appeals in favour of Unison Hotels Limited and Umesh Saraf.
Key Takeaway
The ruling reinforces an important principle in EPCG disputes: where the DGFT, being the competent licensing authority, has accepted fulfillment of the export obligation and issued an EODC, Customs cannot ordinarily continue to sustain a demand founded on an allegation of non-fulfilment of the very same EPCG obligation without a legally sustainable basis to disregard that discharge.
The decision is also significant because CESTAT rejected a purely factual inference of personal use based on matters such as vehicle location, registration-related allegations and statements, particularly when the importer demonstrated foreign-exchange earnings and subsequently secured formal discharge of its EPCG obligation from DGFT.
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: 11.09.2026
CESTAT Ahmedabad- Customs Cannot Reclassify Naphtha as NGL Without Conclusive Scientific Evidence
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 Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad has allowed the appeals filed by Hazel Mercantile Limited and connected appellants in a major customs classification dispute concerning whether imported petroleum cargo declared as Naphtha could be reclassified by Customs as Natural Gasoline Liquid (NGL).
A Division Bench comprising Judicial Member Somesh Arora and Technical Member A.K. Jyotishi held that the Customs Department had failed to authoritatively establish the classification sought by it and that the classification declared by the importer could not be disturbed.
The Naphtha vs NGL Dispute
Hazel Mercantile is engaged in the import, export and trading of petrochemicals, including Naphtha. The dispute arose from a consignment of approximately 20,110.767 MT which the company stated had been imported as Naphtha and was ultimately intended for export.
Hazel filed seven Bills of Entry declaring the product as Naphtha under CTH 2710 1229. Customs, however, alleged that the imported product was actually Natural Gasoline Liquid (NGL) and proposed classification under CTH 2710 1290. The goods were consequently seized by DRI.
The subsequent show cause notice proposed rejection of the declared description and classification, enhancement of the assessable value, confiscation under Sections 111(d), 111(m), 111(p) and 111(o) of the Customs Act, and penalties under Sections 112(a), 112(b), 114AA and 117.
Conflicting Laboratory Reports Become Central Issue
The dispute largely turned on competing technical reports.
CRCL Kandla and CRCL Delhi treated the product as NGL. On the other hand, the importer relied upon reports from TUV India, Geo Chem Laboratories and CSIR-Indian Institute of Petroleum (IIP), Dehradun, apart from the load-port certification, to maintain that the product was Naphtha.
Pursuant to directions of the Gujarat High Court, fresh samples had been drawn. Geo Chem concluded that the sample conformed to Naphtha specifications, while IIP Dehradun concluded that the sample fell within the light Naphtha range.
CESTAT ultimately placed considerable weight on the expertise and depth of testing undertaken by these specialised laboratories.
Specialised Laboratory Reports Preferred Over CRCL
The Tribunal observed that IIP Dehradun, which specialises in petroleum and petroleum-product testing, had conducted multiple tests before concluding that the sample fell within the range of light Naphtha.
It similarly noted that Geo Chem had subjected the sample supplied by the Department itself to detailed examination and concluded that the product was Naphtha.
CESTAT rejected Revenue’s contention that the private reports were unreliable merely because the importer had referred to the sample as Naphtha while forwarding it for testing. The Bench reasoned that a laboratory of such stature would not simply accept the description supplied by the party without conducting its own technical analysis.
The Tribunal therefore preferred the reports of the specialised testing agencies, finding that they had greater wherewithal to test petroleum products than the departmental laboratories.
Burden to Prove Reclassification Lies on Customs
CESTAT reiterated the settled principle that where the Department seeks to change the tariff classification declared by an importer, the burden of proving the proposed alternative classification rests upon Revenue.
The Tribunal referred to Hewlett Packard India Sales Pvt. Ltd. v. Commissioner of Customs, observing that even where classification emerges from self-assessment, the Department must discharge the burden if it seeks to alter that classification.
It also relied upon Tata Chemicals Ltd. v. Commissioner of Customs, Union of India v. Garware Nylons Ltd. and Commissioner of Customs, Mundra v. Sunrise Traders on the relevance of scientific evidence, BIS standards and the insufficiency of inconclusive expert reports for disturbing an assessee’s classification.
Reliance Industries NaphthaβNGL Ruling Considered
Hazel placed substantial reliance upon the earlier CESTAT Ahmedabad decision in Reliance Industries Ltd. v. Commissioner of Customs, Ahmedabad, 2024 (10) TMI 1555 β CESTAT Ahmedabad.
In that case, the Tribunal had observed that Naphtha is the genus and NGL is a species, and that NGL could fall within the broader description of Naphtha in the context considered there.
The Revenue’s appeal against the Reliance Industries decision was subsequently dismissed by the Supreme Court on 9 April 2025 in Civil Appeal Nos. 5133β5137 of 2025, the Court finding no good reason to interfere with CESTAT’s order.
CESTAT considered this jurisprudence while analysing Hazel’s classification dispute.
βMost Akinβ Test Does Not Help Revenue
The Department relied upon the Supreme Court’s decision in Gastrade International Ltd. v. Commissioner of Customs, Kandla and argued that the imported goods were most akin to NGL.
CESTAT, however, found the argument to be self-defeating in the facts of Hazel’s case.
The Bench observed that the reports of IIP Dehradun and Geo Chem were based on a significantly wider range of parameters and were issued by more specialised agencies. Those reports supported the appellant’s case even when the βmost akinβ test was applied.
The Tribunal consequently held that whether the dispute was examined on the basis of akinness, inconclusive test reports or the common-parlance understanding that NGL is a species within the broader category of Naphtha, Revenue had failed to establish its proposed classification.
Importer’s Classification Cannot Be Disturbed
The Tribunal therefore reached the categorical conclusion that:
βthe classification of the appellant cannot be allowed to be disturbed.β
It further held that the conclusions reached by the adjudicating authority were incorrect and could not be adopted.
This finding went to the root of the proceedings because the Department’s confiscation and penalty case substantially flowed from its allegation that Hazel had misdeclared NGL as Naphtha.
CESTAT Allows Appeals on Merits
Having decided the fundamental classification controversy in favour of Hazel Mercantile, CESTAT observed that it was inclined to allow the appeals without going into the Department’s other pleas, since the appellants succeeded on the factual and legal merits of the classification issue.
The Tribunal accordingly allowed the appeals through Final Order Nos. 10728β10735/2026, pronounced on 7 September 2026.
Important Observation on WhatsApp and Electronic Evidence
The proceedings also involved reliance by Revenue upon WhatsApp chats and other material extracted from mobile devices.
While deciding the matter principally on classification, CESTAT referred to Section 138C of the Customs Act, concerning admissibility of computer-generated evidence, and made an unusual concluding observation suggesting that the Department should consider a dedicated statutory provision governing mobile-phone evidence and the procedure for its extraction, rather than relying solely on Section 138C.
This observation could assume wider significance in customs investigations increasingly dependent upon mobile-phone data, messaging applications and digital forensic evidence.
Key Legal Takeaway
The decision reinforces a fundamental customs-classification principle: the Department cannot disturb an importer’s declared tariff classification merely by asserting an alternative description; the proposed reclassification must be affirmatively established through reliable technical evidence.
Where competing laboratory reports exist, the expertise of the testing body, comprehensiveness of the parameters tested and reliability of the methodology become critical considerations.
The ruling is particularly significant for the petroleum and petrochemical sector because it also engages with the continuing tariff distinction between Naphtha and Natural Gasoline Liquid, the βmost akinβ test and the earlier Reliance Industries ruling recognising NGL as a species within the broader genus of Naphtha.
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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: 11.09.2026
Supreme Court- Section 67 NDPS Statements Cannot Be Used as Confessions; Officers Under Section 53 Are βPolice Officersβ for Evidence Act
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 .
In a landmark judgment having major implications for prosecutions under the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), the Supreme Court held that officers invested with powers under Section 53 of the NDPS Act are βpolice officersβ for the purposes of Section 25 of the Indian Evidence Act, 1872. Consequently, confessional statements made before such officers are inadmissible for securing the conviction of an accused.
The ruling came in Tofan Singh v. State of Tamil Nadu, arising from Criminal Appeal No. 152 of 2013 along with several connected appeals and Special Leave Petitions. The majority judgment was delivered by Justice R.F. Nariman, with Justice Navin Sinha concurring, while Justice Indira Banerjee dissented on the principal questions.
The Core Issue Before the Supreme Court
The controversy arose from the use of statements recorded by officers under Section 67 of the NDPS Act. Tofan Singh challenged his conviction primarily on the ground that it was based upon a purported confessional statement recorded under Section 67.
The appellant argued that the officer recording such a statement should be regarded as a βpolice officerβ and, therefore, the confession was hit by Section 25 of the Evidence Act. It was also contended that Section 67 merely authorises officers to call for information and does not empower them to record confessions capable of being treated as substantive evidence.
The larger Bench was essentially required to determine two questions: whether officers empowered under Section 53 of the NDPS Act are police officers for Section 25 of the Evidence Act, and whether a statement recorded under Section 67 can be treated as a confessional statement against an accused.
Section 53 NDPS Officers Are βPolice Officersβ
The majority answered the first question in favour of the accused.
The Supreme Court held that officers invested with powers under Section 53 of the NDPS Act are βpolice officersβ within the meaning of Section 25 of the Evidence Act. Therefore, any confessional statement made to such an officer is barred by Section 25 and cannot be taken into account to convict an accused under the NDPS Act.
The ruling is particularly significant because Section 53 enables officers belonging to departments such as Customs, Revenue Intelligence, Narcotics and other specified government departments to be invested with powers of an officer-in-charge of a police station for investigation of NDPS offences.
The majority rejected an interpretation under which constitutional and evidentiary safeguards available to an accused could depend merely upon the departmental designation of the investigating officer. The Court observed that permitting a confession before such an officer to become the basis of conviction, without safeguards and without excluding Section 25 of the Evidence Act, would infringe the constitutional protections under Articles 14, 20(3) and 21 of the Constitution.
Section 67 Statement Cannot Be Used as a Confession
The second and equally important finding concerned Section 67 of the NDPS Act.
The Supreme Court categorically held:
βA statement recorded under section 67 of the NDPS Act cannot be used as a confessional statement in the trial of an offence under the NDPS Act.β
The decision therefore substantially altered the evidentiary position in NDPS prosecutions where investigative agencies had relied upon Section 67 statements as confessions against accused persons.
The judgment reinforces the constitutional protection against self-incrimination under Article 20(3) and the evidentiary prohibition contained in Section 25 of the Evidence Act.
Raj Kumar Karwal and Kanhaiyalal Overruled
The Supreme Court expressly reconsidered its earlier judgments in Raj Kumar Karwal v. Union of India, (1990) 2 SCC 409 and Kanhaiyalal v. Union of India, (2008) 4 SCC 668.
Those decisions had supported the proposition that officers exercising powers under Section 53 were not police officers within Section 25 of the Evidence Act and had permitted reliance upon Section 67 statements in circumstances considered therein.
The majority in Tofan Singh held that both judgments βdo not state the law correctlyβ and expressly overruled them. It further clarified that other judgments expressly relying upon those decisions or the principles laid down in them would also stand overruled to that extent.
By contrast, the Supreme Court approved Noor Aga v. State of Punjab, (2008) 16 SCC 417 and Nirmal Singh Pehlwan v. Inspector, Customs, (2011) 12 SCC 298, declaring them to be correct in law.
Important Distinction From Statements Under the Customs Act
The judgment also discusses the distinction between Section 67 of the NDPS Act and the powers available to Customs officers under Sections 107 and 108 of the Customs Act, 1962.
The reference order itself noted that Section 108 of the Customs Act expressly empowers Customs officers to summon persons to give evidence and produce documents, whereas Section 67 of the NDPS Act uses materially different language.
Accordingly, the Tofan Singh ruling should be understood in its specific statutory context under the NDPS Act and should not automatically be read as declaring every statement recorded by Customs officers under Section 108 of the Customs Act inadmissible.
Justice Indira Banerjeeβs Dissent
Justice Indira Banerjee disagreed with the majority. In her dissent, she concluded that officers invested with powers under Section 53 of the NDPS Act should not be regarded as police officers for Sections 25 and 26 of the Evidence Act.
She was also unable to agree with the proposition that a statement recorded under Section 67 could not be used against an accused. In her view, statements made during an inquiry or investigation before authorised NDPS officers could be tendered and proved in accordance with law.
The binding position, however, is the 2:1 majority ruling.
Did the Supreme Court Acquit Tofan Singh in This Judgment?
An important procedural distinction must be noted. The larger Bench was deciding the referred questions of law. It did not finally dispose of Tofan Singh’s individual appeal on merits through this judgment.
After answering the reference, the Supreme Court directed that the appeals and Special Leave Petitions be sent back to the appropriate Division Benches for disposal on merits in light of the majority judgment.
Therefore, it is more accurate to say that the Supreme Court ruled in favour of the accused on the referred legal issues, rather than stating that this larger-Bench judgment itself acquitted Tofan Singh.
Key Legal Takeaway
Tofan Singh fundamentally changed the evidentiary landscape of NDPS prosecutions. The binding principles are clear: an officer invested with powers under Section 53 of the NDPS Act is a police officer for Section 25 of the Evidence Act, a confession made to such an officer cannot be used to convict an accused, and a statement recorded under Section 67 cannot be treated as a confessional statement at an NDPS trial.
The judgment consequently remains a major authority on Section 67 statements, self-incrimination, admissibility of confessions and the investigative powers of NCB, DRI, Customs and other officers empowered under the NDPS Act.
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: 11.09.2026
Delhi High Court Sets Aside Refusal of βHEALTHSKOOLβ Trademark; Holds Suggestive Marks Are Inherently Distinctive and Registrable
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 Delhi High Court has set aside an order of the Trade Marks Registry refusing registration of the mark βHEALTHSKOOLβ for medical and allied products in Class 10, holding that the Senior Examiner had applied an incorrect legal standard while examining the distinctiveness of the mark.
Justice Prathiba M. Singh allowed the appeal filed by Disruptive Health Solutions Private Limited under Section 91 of the Trade Marks Act, 1999 and directed the Registrar of Trade Marks to proceed with advertisement of the mark, subject to a disclaimer that the proprietor would have no exclusive rights over the word βHealthβ independently.
Trademark Registry Refused βHEALTHSKOOLβ as Descriptive
The dispute arose from Trade Mark Application No. 3942420, filed for the word mark βHEALTHSKOOLβ on a βproposed to be usedβ basis in Class 10.
The application covered products including bandages, condoms, surgical, medical, dental and veterinary apparatus and instruments, artificial limbs, orthopaedic articles, suture materials and other medical products.
The Senior Examiner rejected the application under Section 9(1)(b) of the Trade Marks Act, reasoning that βHEALTHSKOOLβ indicated the purpose or use of the goods and was therefore descriptive.
Appellant Already Held βHEALTHSKOOLβ Registrations in Other Classes
Before the High Court, Disruptive Health Solutions pointed out that βHEALTHSKOOLβ had been adopted in 2015 for medicinal and other products and e-pharmacy activities.
The company already held registrations for the mark in Classes 3, 5 and 44, including both word and logo registrations. The Registrar’s counsel also confirmed before the Court that registrations for the same mark had been granted in other classes.
The Court further noted that the Registry’s examination report had not cited any identical or deceptively similar trademark. The only objection raised against the application was under Section 9(1)(b).
Delhi High Court Explains βSpectrum of Distinctivenessβ
The High Court found that the Senior Examiner had βerred in lawβ in applying the standard for registration of trademarks.
The Court explained that trademarks broadly fall across a spectrum comprising arbitrary/fanciful/invented marks, suggestive marks, descriptive marks and generic marks.
Relying on Bata India Limited v. Chawla Boot House, (2019) 259 DLT 292, the Court reiterated the spectrum of trademark distinctiveness:
While generic expressions enjoy the least distinctiveness and descriptive marks generally require secondary meaning, suggestive marks are inherently distinctive and do not require proof of secondary meaning.
How to Distinguish a Suggestive Mark From a Descriptive Mark
The judgment provides an important test for determining whether a mark is descriptive or merely suggestive.
Referring to Bata India, the Court noted that the inquiry can involve two considerations: the degree of imagination required to connect the mark with the product, and the competitor’s need to use the mark.
The Court also relied on the Bombay High Court’s judgment in People Interactive (India) Private Limited v. Vivek Pahwa, 2016 (68) PTC 225 (Bom), which explains that suggestive words merely hint at a feature or speciality of the goods and require the consumer to make a mental connection between the expression and the product. Such marks do not require proof of secondary meaning before registration.
Descriptive Element Does Not Automatically Make Entire Mark Unregistrable
The High Court further clarified that a mark can obtain protection either because it is inherently distinctive or because it has acquired distinctiveness through secondary meaning.
Importantly, the Court held that merely because some portion of a trademark has a reference or indication concerning the goods or services, the entire mark cannot automatically be rejected.
The Registry must examine the mark on its merits, the extent of its use and other registrations held by the applicant. The Court also recognised that a trademark owner is entitled to expand into additional goods and services as a natural consequence of business expansion.
βHEALTHSKOOLβ Distinctive Enough to Proceed for Advertisement
Applying these principles, the Court noted that βHEALTHSKOOLβ had been used by the appellant since 2015 and was already protected through several registrations in other classes.
The company had also recorded sales of approximately βΉ23 crore during 2020-21.
Significantly, the appellant informed the Court that it was not claiming exclusive rights over the word βHealthβ per se.
Considering these circumstances, the High Court concluded that βHEALTHSKOOLβ was sufficiently distinctive at that stage to proceed for advertisement.
Registry Directed to Advertise Mark Within Two Months
The Delhi High Court consequently held that the Senior Examiner’s refusal order was unsustainable and liable to be set aside.
The Court directed that the trademark application proceed for advertisement in the Trade Marks Journal with the condition:
βNo exclusive rights in the word βHealthβ.β
The Registrar was directed to advertise the mark within two months. The Court, however, clarified that its decision would not bind any opposition proceedings that might subsequently be initiated by a third party. The appeal was accordingly allowed.
Key Legal Takeaway
The judgment reinforces that the Trade Marks Registry cannot treat every mark having some connection with the relevant goods as automatically descriptive. The proper inquiry requires consideration of the spectrum of distinctiveness.
In particular, suggestive marks are inherently distinctive, whereas descriptive marks ordinarily require secondary meaning. The degree of imagination required by a consumer to connect a mark with the product remains an important test in drawing that distinction.
The decision also recognises that the presence of a potentially descriptive component within a composite trademark does not necessarily justify rejection of the entire mark, particularly where an appropriate disclaimer can protect the public interest.
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: 10.09.2026
CESTAT Mumbai Sets Aside Customs Duty Demand Under EPCG Scheme; Delay in EODC Issuance by DGFT Held Beyond Exporterβs Control
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 Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has granted significant relief to CEAT Limited in an EPCG dispute, setting aside a customs duty demand of βΉ1.79 crore, along with redemption fine and penalty, after finding that the company had fulfilled its export obligations and that the delay in issuance of the Export Obligation Discharge Certificate (EODC) by DGFT was beyond its control.
The Regional Bench comprising Judicial Member Ajay Sharma and Technical Member M.M. Parthiban allowed CEATβs appeal against the Order-in-Original dated 22 May 2025 passed by the Commissioner of Customs (Export), Mumbai.
Background of the EPCG Dispute
CEAT, engaged in the manufacture of automobile tyres, had obtained six EPCG authorisations in 2013 for importing capital goods against the export of tyres. The capital goods imported under these authorisations were valued at approximately βΉ7.76 crore, involving customs duty foregone of βΉ1,79,12,579. CEAT had executed bonds undertaking fulfilment of its export obligations.
Customs subsequently alleged that CEAT had failed to produce the required Capital Goods Installation Certificates and had also not submitted the EODC as required under the applicable EPCG exemption notification.
Accordingly, a show cause notice dated 7 October 2024 proposed recovery of the entire duty foregone amount of βΉ1.79 crore with interest, confiscation of the imported capital goods under Section 111(o) of the Customs Act, 1962, and penalty under Section 112(a). The Commissioner confirmed the proposals through the Order-in-Original dated 22 May 2025.
CEAT Had Already Applied to DGFT for EODC
Before CESTAT, CEAT contended that it had fulfilled the prescribed export obligation and had already approached the DGFT authorities for issuance of the EODC.
Significantly, the application seeking the discharge certificate had been submitted to DGFT on 13 January 2020, well before the Customs adjudication. The EODC, however, remained pending with the licensing authority when the Commissioner passed the impugned order.
CEAT also produced installation certificates issued by the jurisdictional Central Excise authorities covering the imported capital goods. Subsequently, the EODC covering all six EPCG authorisations was issued by DGFT, and Customs itself accepted the discharge certificate and cancelled the bonds executed under the six EPCG authorisations.
Delay by DGFT Was Beyond Exporterβs Control: CESTAT
The Tribunal found that the requisite conditions concerning installation of the imported capital goods had been fulfilled.
More importantly, CESTAT noted that CEAT had submitted the necessary details to DGFT for obtaining the EODC as early as 13 January 2020, whereas the certificate was ultimately issued only later by the DGFT authorities.
The Tribunal therefore held that non-production of the EODC during adjudication was beyond CEATβs control, since the competent authority had not issued the certificate despite CEAT having completed the exports necessary for fulfilment of its export obligation and submitted the requisite documents.
This finding is particularly important for EPCG disputes where an importer/exporter has completed the substantive export obligation but faces Customs proceedings merely because the formal discharge certificate remains pending before DGFT.
Customs Should Not Prematurely Decide EPCG Compliance While EODC Is Pending
CESTAT relied upon its earlier decision in Alca Technologies v. Commissioner of Customs, Nhava Sheva-IV, reported at 2019 (369) E.L.T. 1447 (Tri.-Mumbai).
In that case, the Tribunal had held that where an application for EODC remained pending before the licensing authority, the proper course for Customs was to keep the show cause notice pending until the licensing authority took a decision, rather than independently proceeding to conclude that the conditions of the exemption notification had not been fulfilled.
The principle assumes importance because determination of whether the export obligation under an EPCG authorisation has been discharged substantially falls within the framework administered by DGFT.
CESTAT Notes Contradictory Stand Taken by Customs
One of the strongest observations in the order concerned the contradictory positions adopted within the Customs Department itself.
After DGFT issued the EODC, the Customs authorities accepted the certificate and cancelled the bonds relating to all six EPCG licences. At the same time, the impugned adjudication order continued to demand customs duty on the premise that CEAT had failed to submit the EODC.
CESTAT observed that, on one hand, Customs had confirmed the duty demand for non-production of the EODC, while on the other hand, authorities of the same Commissionerate had subsequently accepted the EODC and cancelled the bonds.
The Tribunal therefore found no merit in sustaining the demand merely on the ground of non-submission of the documents during the original adjudication.
Duty Demand, Redemption Fine and Penalty Set Aside
In light of CEAT’s fulfilment of the EPCG conditions, issuance of the EODC by DGFT, production of installation certificates and subsequent cancellation of the bonds by Customs itself, CESTAT held that the impugned order could not legally survive.
The Tribunal accordingly held that the order, insofar as it confirmed the customs duty demand along with redemption fine and penalty, was legally unsustainable.
The impugned order was therefore set aside and CEAT’s appeal was allowed.
Key Legal Takeaway
The ruling reinforces an important principle in EPCG and export-promotion disputes: where an exporter has completed the substantive export obligation and has timely approached DGFT for an EODC, it should not ordinarily suffer adverse customs consequences merely because issuance of the formal certificate remains pending with the licensing authority.
The decision also underlines the need for coordination between DGFT and Customs. Where the licensing authority is still considering an EODC application, Customs should avoid prematurely concluding that the export obligation has not been fulfilled.
Once DGFT subsequently certifies fulfilment and Customs itself accepts that certificate by cancelling the corresponding bonds, maintaining a duty demand based solely on earlier non-production of the EODC becomes untenable.
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: 10.09.2026
Delhi High Court Grants Bail Under NDPS Act Over 51-Day Delay in Sampling
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 .
In a significant ruling concerning the sampling and preservation of seized narcotic drugs under the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), the Delhi High Court held that an application under Section 52A of the NDPS Act for drawing samples before a Magistrate must be made within a reasonable time and that an unexplained delay of 51 days could not be regarded as reasonable.
In Kashif v. Narcotics Control Bureau, BAIL APPLN. 253/2023, Justice Jasmeet Singh held that violation of Section 52A in the facts of the case vitiated the sample-collection procedure and that the resulting benefit must accrue to the accused. The Court consequently granted bail to the applicant, who had been in custody since 7 March 2022.
The judgment is particularly important because the Court addressed a recurring question under the NDPS Act: where Section 52A does not prescribe a specific numerical deadline, how quickly must the investigating agency approach the Magistrate for sampling and certification?
The Delhi High Court answered that, taking guidance from Standing Order 1/88, it is desirable that the Section 52A application be made within 72 hours or near about that timeframe, while also recognising that what constitutes a reasonable time ultimately depends upon the facts and circumstances of each case.
Background of the Case
The prosecution case originated from information received by a Junior Intelligence Officer of the Narcotics Control Bureau (NCB) concerning a suspicious parcel lying at the DHL Express office at Rama Road, Kirti Nagar, New Delhi.
An NCB team reached the premises and examined the parcel. According to the prosecution, it contained 11 lace rolls and three pieces of cloth. Upon checking one lace roll, officers allegedly found 120 strips of Tramadol tablets, with ten tablets in each strip. Examination of the remaining rolls ultimately led to the alleged discovery of 13,200 strips of Tramadol tablets. The contraband was seized on 24 February 2022.
The investigation subsequently led to further seizures. On 28 February 2022, 15,000 Zolpidem tablets were allegedly recovered at Terminal 3, IGI Airport, while another 19,440 Tramadol tablets were recovered from packages at Global India Express Pvt. Ltd., Mahipalpur.
The prosecution alleged that co-accused Tamir Ali disclosed the involvement of Kashif and other persons in sending NRx tablets to the United States. Kashif was thereafter arrested near Jewar Toll Plaza on 7 March 2022.
Applicantβs Principal Challenge: Defective and Delayed Sampling
The bail application raised serious objections concerning the manner in which the seized substances were sampled.
The applicant argued that the procedure prescribed by Standing Order 1/88 had not been followed. In particular, it was contended that sampling had not been carried out on the spot in accordance with Clause 1.5 of the Standing Order.
Reliance was placed upon Basant Rai v. State, 2012 SCC OnLine Del 3319, to challenge the procedure of mixing tablets recovered from different strips/packages rather than following the prescribed representative sampling procedure.
The applicant also relied upon the Supreme Court decision in Gaunter Edwin Kircher v. State of Goa, Secretariat Panaji, Goa, AIR 1993 SC 1456, contending that proper sampling was required from the individual packets and that the procedure followed by the NCB was deficient.
However, the issue that ultimately assumed central importance before the High Court was the delay in approaching the Magistrate under Section 52A of the NDPS Act.
Section 52A of the NDPS Act: Why Is Magistrate-Supervised Sampling Important?
Section 52A lays down the statutory mechanism concerning disposal and evidentiary documentation of seized narcotic drugs and psychotropic substances.
Under Section 52A(2), the authorised officer is required to prepare an inventory and may approach the Magistrate for, among other things:
certification of the correctness of the inventory;
taking and certification of photographs; and
drawing representative samples in the presence of the Magistrate and certification of the correctness of the list of samples.
Importantly, Section 52A(4) gives evidentiary significance to the inventory, photographs and list of samples certified by the Magistrate by providing for their treatment as primary evidence.
The integrity of this process therefore assumes considerable importance in an NDPS prosecution.
Standing Order 1/88 and the 72-Hour Requirement
The Court also examined Clauses 1.5 and 1.13 of Standing Order 1/88.
Clause 1.5 provided for samples to be drawn at the spot of recovery, in duplicate, in the presence of panch witnesses and the person from whose possession the substance was recovered.
Clause 1.13 provided that samples should be dispatched to the laboratory within 72 hours of seizure to avoid legal objections.
The Court noted that a notification published on 23 December 2022 repealed Standing Orders 1/88 and 1/89 and clarified the sampling mechanism by requiring sampling to be undertaken in accordance with Section 52A(2). However, the Court held that this subsequent notification could not be applied retrospectively to the case before it.
Supreme Court in Mohanlal: Section 52A Does Not Brook Delay
A central precedent considered by the Delhi High Court was Union of India v. Mohanlal, (2016) 3 SCC 379.
The Supreme Court had recognised the conflict between the statutory mechanism under Section 52A and the Standing Orders relating to sampling. Nevertheless, it stressed that once contraband is seized, the authorised officer should approach the Magistrate for sampling and certification without loss of time.
The Delhi High Court extracted the Supreme Court’s conclusion that although there was no basis for reading an exact statutory timeframe into Section 52A, an application for sampling and certification should nevertheless be made without undue delay.
This distinction became crucial.
The absence of a fixed number of days in Section 52A did not, according to the Delhi High Court, give the investigating agency unlimited discretion regarding when to approach the Magistrate.
Court: Reasonable Time Must Be Read Into Section 52A
The High Court framed the central question as:
What constitutes a reasonable time for making an application to the Magistrate under Section 52A, and what is the effect of delay?
After examining the statute, Standing Orders and Supreme Court jurisprudence, the Court held that a reasonable timeframe must be read into Section 52A(2).
The Court rejected the proposition that because the legislation does not expressly specify a deadline, investigating authorities could take an indefinite amount of time to initiate the statutory sampling process.
It observed that the seizure, quantity and quality of contraband constitute crucial evidence in NDPS proceedings and that drawing and certification of samples in the presence of a Magistrate are of utmost importance.
Delhi High Court Suggests 72 Hours or Near About as Desirable Period
One of the most significant aspects of the judgment appears in paragraph 28.
The Court recognised that what constitutes reasonable time will depend upon the circumstances of each case. Nevertheless, taking guidance from Standing Order 1/88, Justice Jasmeet Singh held that:
it is desirable that an application under Section 52A should be made within 72 hours or near about the said timeframe.
The Court was careful not to convert this observation into an inflexible statutory deadline. Rather, it used the Standing Order as a guide for assessing whether the delay was reasonable.
This makes the judgment important for both prosecution agencies and defence lawyers dealing with NDPS cases involving delayed sampling.
Why Delay in Sampling Matters
The Court’s concern was fundamentally linked to the integrity of physical evidence.
Where seized narcotic substances remain in the custody and control of the prosecuting agency for an extended period before the statutory sampling process is completed, questions may arise regarding preservation and the possibility of tampering.
The Court relied upon Rishi Dev @ Onkar Singh v. State, 2008:DHC:1513, where the Delhi High Court had stressed the importance of sending samples for testing promptly because delay can create the possibility of interference with material kept in the police malkhana.
In Kashif, the Court concluded that non-compliance with Section 52A within a reasonable time could create an apprehension that the sample may have been tampered with. It further observed that where a sample is wrongly drawn, the benefit of doubt must accrue to the accused, while the prosecuting agency would have to establish at trial that the sample remained immune from tampering.
51-Day Delay Held Clearly Unreasonable
Applying these principles to the facts, the High Court noted that the last seizure was made on 2 March 2022, whereas the application under Section 52A for drawing samples and certification was filed only on 22 April 2022.
The delay was therefore 51 days.
The Court held categorically that:
βA period of 51 days, by no stretch of imagination, can be called a reasonable periodβ
for filing a Section 52A application.
The Court also found it significant that the NCB had furnished no reasons explaining the 51-day delay.
Investigating Agency Must Explain Delay
The Court further observed that an application under Section 52A for sample collection is not a highly technical proceeding requiring elaborate factual or legal pleadings.
It characterised it as being more in the nature of a clerical application and held that it should mandatorily be moved within a reasonable time.
The Court stated that the application must be moved at the earliest, and if it is not, the authorities must explain the reasons for the delay.
This aspect of the judgment is particularly significant because it places an evidentiary and procedural burden upon investigating agencies to account for unexplained delay.
Standing Orders Cannot Be Blatantly Flouted
The judgment also relies significantly upon the Supreme Court’s decision in Noor Aga v. State of Punjab & Anr., (2008) 16 SCC 417.
The Supreme Court in Noor Aga had emphasised that guidelines issued under legal authority cannot simply be ignored and that substantial compliance with such guidelines is important, particularly in penal proceedings.
The Delhi High Court noted that NDPS punishments are punitive and stringent, making procedural safeguards particularly important in balancing the rights of an accused.
The Court further referred to its earlier decision in Laxman Thakur v. State, BAIL APPLN. 3233/2022, 2022/DHC/005591, where Standing Order 1/88 had been treated as mandatory.
Earlier Delhi High Court Decisions Considered
The Court examined several earlier decisions concerning NDPS sampling.
In Amani Fidel Chris v. Narcotics Control Bureau, 2020 SCC OnLine Del 2080, bail had been granted where the sampling procedure followed by the investigating agency conformed neither to Section 52A nor to the relevant Standing Orders.
The NCB, on the other hand, relied upon Arvind Yadav in JC Through His Pairokar v. Govt. of NCT Delhi Through Standing Counsel, BAIL APPLN. 1416/2021, 2021:DHC:1965, where a coordinate Bench had declined to grant bail merely because samples had been drawn without the Magistrate’s presence, leaving the effect upon the sanctity of the samples to be examined at trial.
The Court distinguished the issue before it by focusing upon the reasonable apprehension regarding preservation or tampering arising from prolonged delay.
Section 52A Violation Held to Vitiate Sample Collection Procedure
After considering the entire statutory and judicial framework, the Court reached a clear conclusion:
Violation of Section 52A vitiated the sample collection procedure, and the benefit had to accrue to the applicant.
The Court also rejected the contention that the applicant could not raise the objection because he had failed to object when the Section 52A application was eventually moved.
Justice Jasmeet Singh held that since the objection was a legal objection, it could be raised at any stage.
Section 37 Embargo Held Inapplicable to the Applicant
The Court also considered the stringent bail restrictions contained in Section 37 of the NDPS Act.
It noted that Kashif had been in custody since 7 March 2022, no further custodial interrogation was required, and no recovery had been made from the applicant or at his instance.
On these facts, the Court held that the embargo under Section 37 was not applicable to the applicant.
Bail Granted Subject to Stringent Conditions
The High Court ultimately allowed the bail application.
Kashif was directed to furnish a personal bond and surety bond of βΉ25,000 each, subject to the satisfaction of the Trial Court.
Among other conditions, he was required to appear before the Court when required, keep his mobile number operational, join investigation when called, inform the authorities of any change of address, refrain from leaving the country and surrender his passport, if any.
He was also prohibited from engaging in criminal activity, contacting prosecution witnesses or tampering with evidence.
The Court expressly clarified that its observations were made only for deciding the bail application and would have no bearing on the merits of the case at trial.
Key Case Laws Referred to in the Judgment
Case
Citation
Principle/Context
Tofan Singh v. State of Tamil Nadu
Criminal Appeal No. 152/2013, decided 29.10.2020
Admissibility of statements under Section 67 NDPS Act
Basant Rai v. State
2012 SCC OnLine Del 3319
Sampling procedure
Gaunter Edwin Kircher v. State of Goa
AIR 1993 SC 1456
Sampling from seized packets
Union of India v. Mohanlal
(2016) 3 SCC 379
Section 52A sampling/certification without undue delay
Noor Aga v. State of Punjab & Anr.
(2008) 16 SCC 417
Substantial compliance with Standing Orders
Chief Information Commissioner v. State of Manipur
(2011) 15 SCC 1
Statutory interpretation/procedure
Arvind Yadav v. Govt. of NCT Delhi
2021:DHC:1965
Effect of Section 52A non-compliance at bail stage
Amani Fidel Chris v. NCB
2020 SCC OnLine Del 2080
Bail and defective NDPS sampling
Laxman Thakur v. State
2022/DHC/005591
Mandatory character of Standing Order 1/88
Rishi Dev @ Onkar Singh v. State
2008:DHC:1513
Delay, sample preservation and possibility of tampering
The judgment also reproduces, through Chief Information Commissioner, references to Taylor v. Taylor, (1875) 1 Ch D 426 (CA); Nazir Ahmad v. Emperor, AIR 1936 PC 253 (2); Deep Chand v. State of Rajasthan, AIR 1961 SC 1527; and State of U.P. v. Singhara Singh, AIR 1964 SC 358, on the principle that where law prescribes a particular manner of doing something, the prescribed procedure should be followed.
Key Legal Takeaways from Kashif v. NCB
The judgment establishes several important propositions for NDPS proceedings.
First, the mere fact that Section 52A does not prescribe an express numerical deadline does not permit indefinite delay in approaching the Magistrate.
Second, an application for sampling and certification must be made at the earliest and within a reasonable period.
Third, taking guidance from Standing Order 1/88, the Delhi High Court considered 72 hours or near about that period desirable for making a Section 52A application. This should, however, be understood in the context of the Court’s simultaneous observation that reasonableness depends upon the facts and circumstances of each case.
Fourth, unexplained delay can raise legitimate concerns regarding preservation and possible tampering of the seized material.
Fifth, where delay occurs, the investigating agency should provide an explanation.
Sixth, procedural safeguards assume heightened significance under the NDPS Act because of the severity of the punishments and stringent statutory regime.
Why This Judgment Matters
Kashif v. NCB is significant not merely because bail was granted, but because it attempts to give practical meaning to the Supreme Court’s requirement in Mohanlal that Section 52A proceedings be initiated βwithout undue delay.β
The Delhi High Court did not formally rewrite Section 52A by inserting a rigid statutory limitation period. Instead, it harmoniously read Section 52A with the applicable Standing Order and concluded that the absence of an express deadline cannot allow the prosecution to keep seized contraband under its exclusive custody indefinitely before seeking Magistrate-supervised sampling.
For investigating agencies, the ruling underlines the importance of prompt Section 52A applications, proper sampling, preservation of the chain of custody and documentation of reasons for any unavoidable delay.
For accused persons, it reinforces the proposition that procedural safeguards relating to the integrity of seized narcotic substances are not merely technical formalities, particularly where the prosecution’s case depends upon the identity, quantity and chemical composition of the alleged contraband.
Conclusion
The Delhi High Court’s judgment in Kashif v. Narcotics Control Bureau, BAIL APPLN. 253/2023, is an important authority on the relationship between Section 52A of the NDPS Act, Standing Order 1/88 and timely Magistrate-supervised sampling. The Court found that the NCB had approached the Magistrate only 51 days after the last seizure, without furnishing reasons for the delay.
Such a period, the Court held, could not be considered reasonable. It consequently held that the Section 52A violation vitiated the sample-collection procedure and that the benefit should accrue to the applicant.
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: 10.09.2026
Delhi HC Ruled βONE FOR ALLβ Trademark Registrable for Books; Common Words Can Be Distinctive When Unconnected with the Goods
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 Delhi High Court has ruled in favour of Oswaal Books and Learnings Private Limited, holding that its mark βONE FOR ALLβ is capable of registration for educational books and allied publications under Class 16 of the Trade Marks Act, 1999.
A Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla set aside the orders of both the Registrar of Trade Marks and the Single Judge which had refused registration on the ground that βONE FOR ALLβ was a common, laudatory and non-distinctive expression.
Trademark Registry Had Refused βONE FOR ALLβ
Oswaal Books, engaged in the publication and sale of educational books and academic material, claimed to have adopted the mark βONE FOR ALLβ from 20 August 2020 for its educational publications.
It filed Trade Mark Application No. 4711190 on 20 October 2020 for registration in Class 16. The Registry raised an objection under Section 9(1)(a) of the Trade Marks Act, requiring Oswaal to establish that the mark was capable of distinguishing its goods from those of other traders.
The application was ultimately refused on 14 December 2023 on the ground that βONE FOR ALLβ was a common and non-distinctive expression and that Oswaal had failed to establish acquired distinctiveness or secondary meaning.
Single Judge Also Found the Mark Descriptive
Oswaal challenged the Registry’s decision before the Delhi High Court under Section 91 of the Trade Marks Act.
The Single Judge, however, upheld the refusal, reasoning that βONE FOR ALLβ was a common laudatory phrase suggesting that Oswaal’s books constituted a universal or βone-stopβ solution for students across different examinations and boards.
The Single Judge further found that the evidence produced by Oswaal largely related to its house mark βOSWAAL BOOKSβ, rather than establishing βONE FOR ALLβ as an independent source identifier.
Oswaal then preferred the Letters Patent Appeal before the Division Bench.
Distinctiveness Must Be Examined in Context of the Goods
The Division Bench clarified an important principle of trademark law: a mark cannot be declared non-distinctive merely because it consists of ordinary or commonly used words.
Distinctiveness has to be assessed in relation to the particular goods or services for which registration is sought.
The Court relied on its earlier decision in Leayan Global Pvt. Ltd. v. Bata India Ltd. and reiterated that even a common dictionary word can acquire distinctive character when used for goods or services with which the expression has no immediate connection.
The test, therefore, is not simply whether the words are commonly used in the English language, but whether consumers would immediately associate those words with the nature, quality, characteristics or purpose of the relevant goods.
Slogans and Taglines Can Function as Trademarks
The judgment also contains an important observation regarding the modern commercial significance of slogans and taglines.
The High Court held that slogans are capable of constituting trademarks within the meaning of Sections 2(m) and 2(zb) of the Trade Marks Act where they are capable of distinguishing one person’s goods from those of another.
The Court particularly noted the increasing importance of slogans in the modern digital marketplace. With the rapid expansion of digital marketing, slogans and taglines can perform a source-identifying function and may, in some cases, become even more readily recognised than the brand or trade name itself.
This observation could have wider significance for businesses seeking trademark protection for advertising slogans and brand taglines.
βONE FOR ALLβ Has No Immediate Connection With Books: Delhi High Court
The Division Bench expressly disagreed with the Single Judge’s conclusion that βONE FOR ALLβ was descriptive of Oswaal’s books.
According to the Court, the expression cannot naturally or immediately be associated with books or other goods falling within Class 16.
The phrase ordinarily conveys the idea of a single solution capable of replacing multiple alternatives. That meaning, the Court found, does not directly describe books, printed material or other Class 16 goods.
The Court further observed that βONE FOR ALLβ was not shown to be a common expression used in Class 16 to describe the relevant goods.
No Identical or Deceptively Similar Commercial Use Shown
Another factor weighing in Oswaal’s favour was the absence of evidence showing commercial use of an identical or deceptively similar mark in Class 16.
The Court noted that the Registrar had failed to demonstrate such use and that the Examination Report itself contained no objection under Section 11 of the Trade Marks Act, which deals with relative grounds for refusal based, among other things, on conflict with earlier trademarks.
βONE FOR ALLβ Is Suggestive, Not Descriptive
The Division Bench ultimately held that the mark did not evoke an immediate connection with books.
βONE FOR ALLβ could communicate the broader idea of universality or comprehensive coverage, but it did not directly and unequivocally describe books.
The Court therefore concluded that the expression was, at the highest, suggestive rather than descriptive.
Even if Oswaal intended to project its publications as a universal solution for different academic needs, some degree of mental process was still necessary to connect the phrase with educational books. This was insufficient to render the mark descriptive.
Accordingly, the Court held that βONE FOR ALLβ satisfies the statutory requirement of distinctiveness and is capable of registration.
High Court Sets Aside Refusal of Trademark
The Division Bench consequently set aside both the Single Judge’s judgment and the Registrar of Trade Marks’ refusal order.
Oswaal’s trademark application was restored to the stage at which it stood when the refusal order was passed, with directions that the application proceed further from that stage.
The appeal was accordingly allowed with no order as to costs.
Key Legal Takeaway
The judgment reinforces that the use of common English words does not automatically make a trademark non-distinctive. The correct inquiry under Section 9(1)(a) is whether the mark, considered as a whole and in the context of the goods or services concerned, is capable of distinguishing one trader’s goods from another’s.
It also draws an important distinction between descriptive and suggestive marks. Where the connection between a phrase and the goods is not immediate and requires imagination or mental association, the mark may merely be suggestiveβand therefore capable of registration.
The ruling is particularly relevant to businesses using slogans, taglines and common-word combinations as sub-brands, especially in digital marketing, publishing and consumer-facing industries.
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: 09.09.2026
Delhi High Court Sets Aside Trademark Refusal: Composite Marks Containing Geographical Names Are Not Automatically Barred from Registration
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 Delhi High Court in Abu Dhabi Global Market v. Registrar of Trade Marks, Delhi delivered an important ruling on the registrability of composite trademarks containing geographical names, while also strongly criticising the manner in which the Trade Marks Registry had dealt with the applicantβs response to the examination objections.
Justice C. Hari Shankar set aside the order of the Assistant Registrar refusing registration of the appellantβs device mark and remanded the application to the Trade Marks Registry for advertisement and further proceedings in accordance with law.
The judgment is especially significant for three propositions: a trademark need not be βcoinedβ or βinventiveβ to qualify for registration; evidence of prior use is not necessary to establish distinctiveness where an application is filed on a βproposed to be usedβ basis; and Section 9(1)(b) does not automatically prohibit registration of a composite mark merely because one element of the mark contains a geographical name.
Background of the Case
Abu Dhabi Global Market had filed Application No. 3184380 seeking registration of a composite device mark incorporating its logo together with the words βABU DHABI GLOBAL MARKET.β
The Assistant Registrar of Trade Marks rejected the application by order dated 9 December 2022.
The refusal was broadly based on three objections:
the mark was allegedly neither βcoinedβ nor βinventedβ;
the applicant had not established distinctiveness by filing an affidavit evidencing use of the mark; and
βAbu Dhabiβ was a geographical name and the mark as a whole was allegedly non-distinctive and incapable of monopolisation.
The appellant challenged these findings before the Delhi High Court.
Appellantβs Case
Counsel for Abu Dhabi Global Market argued that none of the grounds relied upon by the Trade Marks Registry could survive either on facts or in law.
One important submission was that the appellantβs logo already stood registered in its favour. According to the appellant, this demonstrated that the Registry had itself recognised the distinctiveness of the device element.
The appellant argued that the mark could not suddenly lose its distinctiveness merely because the words βABU DHABI GLOBAL MARKETβ were placed beneath the logo.
The appellant also explained that the trading name βAbu Dhabi Global Marketβ was not an arbitrary descriptive expression. It had been adopted under Federal Decree No. 15 of 2013 dated 11 February 2013, issued in the name of the President of the United Arab Emirates, which provided for establishment of a financial free zone under the name βAbu Dhabi Global Market.β
Can a Trademark Be Refused Merely Because It Is Not βCoinedβ or βInventiveβ?
The Delhi High Court emphatically answered this question in the negative.
The Court observed that the grounds for refusal of registration are contained in Sections 9 and 11 of the Trade Marks Act, 1999, and these provisions are comprehensive in that regard.
The Court found no statutory requirement that a trademark must necessarily be βcoinedβ or βinventiveβ in order to qualify for registration.
Justice Hari Shankar drew an important conceptual distinction:
Distinctiveness is required for trademark registration; inventiveness is not.
Inventiveness is a concept associated with patent and design law, whereas trademark law focuses upon whether a mark is capable of distinguishing the goods or services of one person from those of another.
The Court therefore held that the Assistant Registrar could not lawfully refuse registration simply because the mark was allegedly not coined or inventive.
Trademark Law Is About Distinctiveness, Not Inventiveness
This aspect of the judgment is commercially important.
A business does not need to create a completely new word in order to obtain trademark protection.
Many trademarks are made up of ordinary words, surnames, geographical references, symbols, logos or combinations of these elements.
What matters under Section 9(1)(a) is whether the mark is capable of functioning as a badge of origin β that is, whether it can distinguish the applicantβs goods or services from those of other traders.
The Court therefore rejected an approach that imported patent-law concepts of novelty or inventiveness into trademark examination.
Trade Name Was Backed by UAE Federal Decree
The Court additionally found that even factually the objection regarding the name being neither coined nor invented was unjustified.
The appellant had specifically explained that the name βABU DHABI GLOBAL MARKETβ had been adopted pursuant to Federal Decree No. 15/2013.
The Court noted that this explanation had already been placed before the Trade Marks Registry in the appellantβs reply to the First Examination Report, but the impugned order made no reference to it.
This omission later became part of the Courtβs wider criticism concerning non-application of mind by the Registry.
No Affidavit of Use Required for a βProposed to Be Usedβ Application
The second major ground of refusal was the absence of an affidavit establishing use of the mark.
The Delhi High Court rejected this objection as well.
The appellantβs application had been filed on a βproposed to be usedβ basis.
The Court observed that there was no lawful basis for linking distinctiveness with evidence of actual prior use in such circumstances.
Justice Hari Shankar stated that the Assistant Registrar had confused distinctiveness with actual user of the mark.
The Court went further and explained that if evidence of use were always required to establish distinctiveness, it would become impossible to register any trademark on a proposed-to-be-used basis.
Such an interpretation would directly conflict with the statutory scheme.
What Does βDistinctivenessβ Mean Under Section 9(1)(a)?
Section 9(1)(a) concerns marks which are devoid of distinctive character, namely marks that are not capable of distinguishing the goods or services of one person from those of another.
The High Court stressed that the proper legal inquiry is therefore:
Is the mark capable of distinguishing the applicantβs goods or services from those of another person?
It is not enough merely to say that a mark has not yet been used.
The Court found that the impugned order contained no finding that the Abu Dhabi Global Market mark was actually incapable of performing this distinguishing function.
Existing Registration of the Logo Was Relevant
The Court also noted that the logo forming part of the composite mark already stood registered in favour of the appellant.
This meant that the Registry had already recognised the distinctiveness of the logo.
The Court accepted the appellantβs contention that adding the words βABU DHABI GLOBAL MARKETβ beneath an already distinctive logo did not, by itself, destroy the distinctiveness of the mark.
Geographical Names and Section 9(1)(b)
The third major issue concerned the presence of the words βAbu Dhabiβ.
The Trade Marks Registry had treated the expression as problematic because Abu Dhabi is the capital of the United Arab Emirates and therefore a geographical name.
The Delhi High Court closely analysed Section 9(1)(b) of the Trade Marks Act.
The provision bars registration of marks which consist exclusively of signs or indications which may serve in trade to designate, among other things, the geographical origin of goods or services.
The word βexclusivelyβ became decisive.
Composite Marks Are Outside the Automatic Bar of Section 9(1)(b)
The Court held that Section 9(1)(b) does not automatically prohibit every mark containing a geographical reference.
The statutory prohibition applies where the mark consists exclusively of matter indicating geographical origin.
A composite mark incorporating other elements stands on a different footing.
The Court held that:
Composite marks are ipso facto outside the scope of Section 9(1)(b) merely on the basis that one component may refer to geographical origin.
In the present case, the mark was not simply the geographical expression βAbu Dhabi.β
It consisted of the words βABU DHABI GLOBAL MARKETβ together with a distinctive logo.
The Court therefore concluded that Section 9(1)(b), by its very terms, could not automatically apply to such a composite mark.
βDominant Partβ Test Has No Role Under Section 9(1)(b)
The Registrar attempted to argue that βAbu Dhabiβ was the dominant part of the mark, and therefore the Section 9 objection should still survive.
The Court rejected this argument in categorical terms.
Justice Hari Shankar held that the βdominant partβ principle is alien to Section 9(1)(b).
That doctrine may be relevant in infringement litigation when courts compare competing trademarks and determine whether the dominant components are deceptively similar.
But Section 9(1)(b) contains the statutory word βexclusively.β
Accordingly, the Court held that the dominant-part doctrine could not override the express statutory requirement of exclusivity.
This is one of the strongest doctrinal aspects of the ruling.
Registration Proceedings and Infringement Proceedings Are Different
The judgment usefully distinguishes between two trademark-law exercises:
Registration analysis under Section 9, and infringement analysis involving comparison of rival marks.
In infringement cases, courts may examine dominant or essential features of rival marks.
But while applying Section 9(1)(b), the focus is on whether the mark as a whole consists exclusively of prohibited descriptive or geographical matter.
The two tests cannot be indiscriminately mixed.
Court Criticises the Trade Marks Registry for Non-Application of Mind
The judgment also contains unusually strong observations regarding administrative decision-making by the Trade Marks Registry.
The Court first referred to one sentence in the refusal order stating:
βThe attorney failed to establish the Identity of the mark in applied class.β
Justice Hari Shankar observed that the sentence was incomprehensible and that even counsel appearing for the Registrar was unable to explain what it meant.
The Court therefore held that an incomprehensible sentence could obviously not constitute a lawful ground for rejecting a trademark application.
Detailed FER Replies Cannot Simply Be Ignored
The Court noted that after issuance of the First Examination Report dated 16 September 2016, the appellant had filed an extensive response consisting of 11 pages and 23 paragraphs, which together with accompanying documents ran into more than 100 pages.
Yet the impugned order appeared not to have considered that response meaningfully.
Justice Hari Shankar strongly observed that applicants do not file detailed responses to examination reports βfor the sake of fun.β
The Court stated that the least expected from the quasi-judicial officer deciding the application is to read the response and apply their mind to the submissions.
Trade Marks Registrar Exercises Quasi-Judicial Functions
The Court characterised the manner in which the application had been decided as a complete abdication of quasi-judicial functions vested under the Trade Marks Act and Rules.
It further observed that the impugned decision effectively reduced Section 18(5) of the Trade Marks Act to redundancy.
This aspect of the judgment has significance beyond the particular mark involved.
Trademark examination and hearing orders must be:
reasoned;
intelligible;
responsive to the applicantβs submissions; and
based on the statutory grounds actually available under the Trade Marks Act.
A formulaic refusal unsupported by reasoning is vulnerable to challenge.
Delhi High Courtβs Final Order
The High Court ultimately held that none of the grounds relied upon by the Assistant Registrar could survive.
The order dated 9 December 2022 was consequently quashed and set aside.
The Court remanded Application No. 3184380 dated 11 February 2016 to the Trade Marks Registry with a direction that it proceed to advertisement and subsequent proceedings in accordance with the Trade Marks Act and the Trade Marks Rules.
Importantly, therefore, the High Court did not itself finally register the mark. It removed the unlawful refusal and directed the application to proceed through the statutory registration process.
Key Legal Principles Emerging from the Judgment
Issue
Delhi High Courtβs Finding
Must a trademark be βcoinedβ?
No
Must a trademark be βinventiveβ?
No
Relevant trademark requirement
Distinctiveness, not inventiveness
Proposed-to-be-used application
Prior-use affidavit is not necessary merely to establish distinctiveness
Meaning of distinctiveness
Capability of distinguishing one personβs goods/services from anotherβs
Geographical name in a mark
Does not automatically bar registration
Section 9(1)(b)
Applies to marks consisting exclusively of prohibited descriptive/geographical indications
Composite geographical mark
Not automatically barred merely because one part is geographic
Dominant-part doctrine
Not applicable to overcome the word βexclusivelyβ in Section 9(1)(b)
Registryβs duty
Must meaningfully consider replies and give reasoned decisions
Final result
Refusal quashed; application remanded for advertisement and further proceedings
Why This Judgment Matters for Trademark Applicants
The ruling is particularly useful for businesses seeking protection for marks containing:
city names;
country names;
regional names;
geographical references;
institutional names; or
combinations of geographical words with logos or other distinctive elements.
The mere presence of a geographical expression does not necessarily make a mark unregistrable.
The correct analysis must examine the mark as a whole and the exact language of Section 9(1)(b).
Importance for International Businesses Entering India
The judgment is also relevant for foreign governmental bodies, free zones, financial centres, international institutions and multinational enterprises seeking trademark protection in India.
Names of foreign institutions frequently incorporate geographical identifiers.
If every composite institutional mark containing a city or country name were automatically rejected, many established global trade names would face unnecessary barriers in India.
The decision confirms that Indian trademark law requires a more nuanced statutory analysis.
Important Distinction: βAbu Dhabiβ Versus βAbu Dhabi Global Market + Logoβ
The judgment can be understood through a simple distinction.
A mark consisting solely of a geographical expression such as βABU DHABIβ may raise a different Section 9(1)(b) analysis.
But the application before the Court was for a composite device mark, consisting of:
a logo + the words βABU DHABI GLOBAL MARKET.β
The Court was therefore required to examine the entire composite mark rather than isolate one component and treat that isolated component as determinative.
This is why the statutory word βexclusivelyβ assumed such importance.
Practical Takeaways for Trademark Practitioners
For trademark attorneys and applicants, the judgment offers several useful lessons.
When responding to an examination report involving Section 9 objections, the response should clearly demonstrate:
the composite nature of the mark;
the distinctive graphical or device elements;
whether any existing registrations already recognise distinctiveness;
the factual origin of the trade name;
whether the application is on a proposed-to-be-used basis;
why proof of prior use is therefore unnecessary;
why the mark does not consist exclusively of geographical or descriptive matter; and
why the mark as a whole is capable of distinguishing the applicantβs goods or services.
The decision also provides a strong basis for challenging refusals that mechanically invoke Section 9 without examining the statutory wording.
Administrative Law Significance of the Judgment
Beyond trademark law, the decision reflects fundamental principles of administrative and quasi-judicial decision-making.
Where a statutory authority receives a detailed reply, it must meaningfully engage with the response.
A decision should demonstrate:
application of mind, intelligible reasoning, consideration of relevant material and reliance upon legally recognised grounds.
An authority cannot simply reproduce objections from an examination report and reject an application without addressing the applicantβs answers.
This aspect of the judgment strengthens procedural fairness in intellectual-property administration.
Broader Impact on Section 9 Jurisprudence
The ruling provides useful clarity on the relationship between Sections 9(1)(a) and 9(1)(b).
Section 9(1)(a) deals with lack of distinctive character.
Section 9(1)(b) addresses marks consisting exclusively of descriptive or geographical indications.
The two provisions should not be conflated.
A geographical component does not automatically establish lack of distinctiveness, particularly where the mark contains other distinctive features.
Similarly, absence of prior use does not establish non-distinctiveness in a proposed-to-be-used application.
Conclusion
The Delhi High Courtβs judgment in Abu Dhabi Global Market v. Registrar of Trade Marks, Delhi is an important authority on the registration of composite trademarks under the Trade Marks Act, 1999.
The Court clarified that trademarks need not be coined or inventive, that actual use is not a prerequisite to distinctiveness in a proposed-to-be-used application, and that a composite mark containing a geographical name is not automatically barred under Section 9(1)(b).
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: 09.09.2026
Delhi High Court Grants Bail in NDPS Case After Five Yearsβ Custody
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 Delhi High Court in Mahender Pal v. State granted regular bail to an accused who had remained in judicial custody for more than five years in a case registered under the Narcotic Drugs and Psychotropic Substances Act, 1985 (βNDPS Actβ).
The Court held that although the prosecution sought to attribute an aggregate recovery of 230 kg of poppy straw to all three accused, the recovery specifically attributable to the applicant was 40 kg of poppy straw, which constituted an intermediate quantity. Consequently, the stringent bail conditions under Section 37 of the NDPS Act were held not to apply to him.
The judgment is significant because it addresses three recurring issues in NDPS bail jurisprudence: individual attribution of contraband, applicability of Section 37 based on quantity, and prolonged incarceration as a constitutional consideration under Article 21.
Background of the Case
The case arose out of FIR No. 628/2017, registered at Police Station Samaypur Badli under Sections 15, 29, 61 and 85 of the NDPS Act.
The bail application was filed under Section 439 of the Code of Criminal Procedure seeking regular bail. The matter was heard by Justice Amit Sharma of the Delhi High Court. The judgment was reserved on 11 May 2023 and pronounced on 18 May 2023.
According to the prosecution, police received secret information that the applicant, Mahender Pal, was allegedly involved in transporting poppy straw in his auto-rickshaw. A raiding team was constituted, and the applicant was allegedly followed to a godown.
The prosecution claimed that the applicant was seen loading a carton into the auto-rickshaw with the assistance of another person. A third individual was also allegedly present inside the godown.
Recovery Alleged by the Prosecution
Upon search of the applicantβs auto-rickshaw, the police allegedly recovered 40 kg of poppy straw contained in packets.
Thereafter, the godown was searched and another 190 kg of poppy straw was allegedly recovered.
Accordingly, the prosecution treated the total recovery as 230 kg and sought to attribute the entire quantity jointly to the accused persons.
The prosecution further relied upon the FSL report, which stated that the seized exhibits contained Morphine, Codeine, Thebaine, Papaverine and Narcotine β constituents of poppy straw.
Charges under Sections 15(c) and 29 of the NDPS Act had been framed against the applicant.
Applicantβs Case: Only 40 Kg Was Recovered from Him
The principal contention advanced on behalf of the applicant was that the recovery directly attributable to him was only 40 kg of poppy straw.
His counsel argued that this was an intermediate quantity, rather than a commercial quantity.
The applicant also relied heavily on the fact that he had remained in custody for over five years and that the trial had not concluded. It was further pointed out that he had been granted interim bail on several occasions and had surrendered each time without misusing the liberty granted to him.
The applicant was stated to be an auto-rickshaw driver with a family dependent on him.
Stateβs Argument: Commercial Quantity and Section 37 Should Apply
The State opposed the bail application.
It argued that charges had been framed under Sections 15(c) and 29 of the NDPS Act and that, because the prosecution case concerned commercial quantity, Section 37 of the NDPS Act would apply.
The State also submitted that only four prosecution witnesses remained to be examined and, therefore, the trial would conclude shortly.
The Court also noted that at the stage of framing of charge there had been a concession on behalf of the applicant regarding framing of charges under Sections 15(c)/29, and that the revision petition against the charge order had later been withdrawn.
Crucial Finding: Recovery from Applicant Was 40 Kg, Not 230 Kg
The most important factual aspect of the judgment is the distinction drawn by the Court between:
the recovery from the applicantβs auto-rickshaw; and the recovery from the godown.
The FIR recorded that 40 kg of poppy straw was recovered from the auto-rickshaw of the applicant.
The additional 190 kg was recovered from the godown and was stated by the prosecution itself to have been in the possession of the other accused persons, namely Bahadur Singh and Prempal.
The Court specifically referred to the prosecutionβs own status report, which stated that the 190 kg recovered from the godown was in the possession of Bahadur Singh and Prempal.
This factual segregation became decisive in assessing whether the stringent conditions of Section 37 could be invoked against Mahender Pal.
Section 37 of the NDPS Act: Why It Matters
Section 37 imposes stringent conditions for the grant of bail in certain NDPS cases involving, among other things, commercial quantity.
In such cases, bail ordinarily cannot be granted unless the Court is satisfied that there are reasonable grounds for believing that:
the accused is not guilty of the alleged offence; and
the accused is not likely to commit an offence while on bail.
These requirements make bail substantially more difficult in commercial quantity cases.
However, the Delhi High Court held that the recovery qua the applicant was only 40 kg of poppy straw, which was an intermediate quantity and punishable with imprisonment up to ten years.
Accordingly, the Court held that Section 37 of the NDPS Act was not attracted qua the applicant.
Prolonged Incarceration and Article 21
The second major aspect of the judgment was prolonged judicial custody.
The applicant had already spent more than five years in custody.
The Court examined prior decisions emphasising that, even in serious NDPS cases, prolonged detention without a timely conclusion of trial engages the fundamental right to personal liberty and speedy trial under Article 21 of the Constitution.
The Court relied upon Anil Kumar v. Directorate of Revenue Intelligence and related authorities to reiterate that prolonged deprivation of liberty without the assurance of speedy trial runs contrary to constitutional principles.
The judgment reproduced the principle that fair, just and reasonable procedure is implicit in Article 21 and that an accused has a constitutional right to be tried speedily.
Reliance on Supreme Court Legal Aid Committee Case
The Delhi High Court referred to the principles laid down in Supreme Court Legal Aid Committee (Representing Undertrial Prisoners) v. Union of India.
That line of authority recognises that undertrials cannot be incarcerated indefinitely merely because they are charged under stringent statutes.
The Court also referred to a coordinate Bench decision in Sarvan Kumar v. State (NCT of Delhi), where it had been observed that the rigours of Section 37 would not necessarily stand in the way where an undertrial had remained in custody for a prolonged period.
Reliance on Union of India v. K.A. Najeeb
The Delhi High Court further relied upon the Supreme Courtβs decision in Union of India v. K.A. Najeeb, (2021) 3 SCC 713.
In K.A. Najeeb, the Supreme Court had held that statutory restrictions on bail do not completely extinguish the power of constitutional courts to protect fundamental rights.
The Court noted the principle that where a timely trial is not reasonably possible and an accused has already undergone substantial incarceration, courts may be constitutionally required to consider release on bail.
The cited passage further explains that the rigours of statutory bail restrictions may βmelt downβ where there is no likelihood of the trial concluding within a reasonable period and the incarceration already undergone becomes substantial in relation to the prescribed sentence.
Conduct During Interim Bail Also Favoured the Applicant
The Court also took note of the applicantβs conduct.
The nominal roll reflected that he had been released on interim bail on multiple occasions and had not misused the liberty.
This factor helped demonstrate that there was no adverse conduct during temporary release that would justify continued incarceration solely on apprehension of misuse.
Delhi High Courtβs Final Reasoning
The Court ultimately rested its bail decision on a combination of circumstances:
the recovery directly attributable to the applicant was 40 kg;
this was an intermediate quantity;
Section 37 of the NDPS Act therefore did not apply qua the applicant;
he had already undergone more than five years of judicial custody;
the constitutional right to speedy trial and personal liberty had to be taken into account; and
his conduct during previous interim bail periods had been satisfactory.
The Court therefore allowed the bail application.
Bail Conditions Imposed by the Court
The applicant was directed to furnish:
a personal bond of βΉ50,000 along with one surety of the like amount.
The Court also imposed conditions requiring him to inform the Investigating Officer of any change of address, not to leave India without prior permission of the Trial Court, keep his mobile numbers operational, and refrain from tampering with evidence or influencing witnesses.
The Court further directed that bail would stand cancelled if it was established that the applicant had committed similar offences or attempted to interfere with the evidence.
No Opinion on Merits of the Trial
Importantly, the Delhi High Court clarified that nothing stated in the bail judgment should be treated as an expression on the merits of the pending criminal case.
The trial court therefore remained free to adjudicate the evidence independently.
Key Legal Principles Emerging from the Judgment
Issue
Delhi High Courtβs Finding
Recovery from applicant
40 kg of poppy straw
Recovery from godown
190 kg
Total prosecution recovery
230 kg
Quantity attributable to applicant for bail analysis
40 kg
Nature of quantity
Intermediate quantity
Section 37 NDPS Act
Not attracted qua the applicant
Custody undergone
More than five years
Interim bail conduct
Liberty not misused
Constitutional consideration
Article 21 right to personal liberty and speedy trial
Bail amount
βΉ50,000 personal bond + one surety of like amount
Result
Regular bail granted
Why This Judgment Is Important for NDPS Bail Jurisprudence
This decision is particularly important because it highlights that quantity attribution cannot be applied mechanically.
Where drugs are recovered from different locations and from different accused, courts must examine who was actually in possession of what quantity before invoking the consequences associated with commercial quantity.
The mere fact that a common seizure memo exists does not automatically answer the question of individual possession.
In this case, the prosecutionβs own status report distinguished between the 40 kg found in the applicantβs auto-rickshaw and the 190 kg recovered from the godown.
That distinction ultimately influenced whether Section 37 applied.
Importance of Individual Attribution in Joint NDPS Cases
NDPS prosecutions frequently involve multiple accused and recoveries from different vehicles, premises or persons.
A central issue in such cases is whether the entire recovery can be attributed collectively to every accused through allegations of conspiracy under Section 29, or whether the individual physical recovery must be separately examined at the bail stage.
The Mahender Pal judgment demonstrates that courts may closely examine the prosecution record itself to determine what quantity is specifically attributable to an applicant.
This can be crucial because the classification between small, intermediate and commercial quantity directly affects the statutory bail regime.
Prolonged Custody Cannot Become Pre-Trial Punishment
The judgment also reinforces another important principle: pre-trial incarceration cannot become a substitute for punishment.
An accused remains presumed innocent until convicted.
If a person spends a substantial part of the maximum possible sentence in custody before guilt is determined, the constitutional guarantee of personal liberty becomes severely implicated.
The Courtβs reliance on Article 21 jurisprudence therefore reflects the continuing judicial effort to balance the societal harm caused by narcotic offences against the constitutional rights of undertrial prisoners.
Practical Takeaway for Defence Counsel
The judgment provides several useful points for lawyers dealing with NDPS bail matters.
At the bail stage, counsel should carefully examine:
the exact quantity recovered from the applicant;
whether additional recovery came from a separate place or co-accused;
the wording of the seizure memo;
the prosecutionβs own status report;
the applicability of Section 29 conspiracy allegations;
custody period already undergone;
number of witnesses examined and remaining;
prior interim bail conduct; and
whether the applicant has any criminal antecedents.
Where the prosecution’s own documents show a recovery below commercial quantity, that fact may materially affect the applicability of Section 37.
Practical Takeaway for Prosecution Agencies
The decision also underscores the importance of precise attribution in seizure and investigation records.
Where different quantities are recovered from different accused or locations, the prosecution must clearly establish the evidentiary basis for attributing the entire commercial quantity to each accused.
A generalised reference to a collective recovery may not be sufficient at the bail stage if the record itself distinguishes possession.
Conclusion
The Delhi High Courtβs decision in Mahender Pal v. State is a significant ruling at the intersection of NDPS bail law, quantity attribution and constitutional liberty. The Court held that the recovery directly attributable to the applicant was 40 kg of poppy straw β an intermediate quantity β and therefore the stringent conditions under Section 37 of the NDPS Act were not attracted qua him.
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: 09.09.2026
Gujarat High Court Order on IGST Refunds for Exporters
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 Gujarat High Court recently delivered a significant judgment in the case of Messrs Aculife Healthcare Pvt. Ltd. & Anr. vs. The Union of India & Anr., addressing the contentious issue of IGST refunds on exported goods procured under the Advance Authorization Scheme. This article provides a detailed overview of the case, the legal arguments, the court’s reasoning, and its broader implications for exporters and GST compliance.
Background of the Case
Export Transactions and IGST Refunds
The petitioner, Aculife Healthcare Pvt. Ltd., exported medicaments between July 2017 and April 2019, paying Integrated Goods & Services Tax (IGST) on these exports.
The IGST paid was refunded under Section 16 of the IGST Act, 2017.
Dispute Arises
Authorities issued a show-cause notice in April 2023, arguing that since the petitioner procured goods duty-free under the Advance Authorization Scheme, they were not eligible to pay IGST on exports as per Sub-rule (10) of Rule 96 of the CGST Rules, 2017.
The Assistant Commissioner raised a demand for refund reversal, citing that the IGST payment and refund were contrary to Rule 96(10).
Appellate Proceedings
The petitioner appealed, and the Commissioner (Appeals) reduced the demand, referencing the Gujarat High Court’s earlier decision in the Cosmo Films Ltd. case, which clarified the prospective application of Rule 96(10) from October 9, 2018.
The demand was reduced to Rs. 9,97,222/-.
Legal Arguments Presented
Petitioner’s Stand:
The petitioner argued that the appeal was pending when Notification No. 20/2024 (dated October 8, 2024) omitted Rule 96(10).
Citing the Adwrap Packaging Ltd. case, the petitioner contended that the omission of Rule 96(10) should apply to all pending proceedings where final adjudication had not occurred.
Respondent’s Position:
The government did not dispute that the appeal was pending when the notification was issued.
The High Court’s Decision
The Court held that since the proceedings were pending before the appellate authority when Notification No. 20/2024 was issued, the omission of Rule 96(10) applied to the petitioner’s case.
The impugned order demanding refund reversal was quashed and set aside.
The petition was allowed, providing relief to the exporter.
Key Takeaways and Implications
Prospective Omission of Rule 96(10):
The omission of Rule 96(10) by Notification No. 20/2024 applies to all cases pending final adjudication as of the notification date.
Exporters with similar pending disputes may benefit from this precedent.
Legal Certainty for Exporters:
The judgment reinforces the principle that changes in tax rules, especially those affecting substantive rights, should not be applied retrospectively to the detriment of taxpayers.
Reference to Precedents:
The Court relied on its earlier decisions (Cosmo Films Ltd. and Adwrap Packaging Ltd.), ensuring consistency in GST jurisprudence.
Practical Impact:
Exporters who procured goods under duty-free schemes and faced IGST refund reversals can seek relief if their cases were pending as of October 8, 2024.
Conclusion
This Gujarat High Court order provides much-needed clarity on the application of GST rules to exporters using the Advance Authorization Scheme. It underscores the importance of timely legal recourse and highlights the judiciary’s role in protecting taxpayer rights amidst evolving tax regulations.
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.
