HYDERABAD: The Telangana High Court has set aside the policy circular dated May 22, 2018, while allowing a writ petition filed by Adani Gangavaram Port Limited (AGPL).
Justice Nagesh Bheemapaka also quashed the consequential show cause notice dated October 20, 2023, the Order-in-Original dated April 16, 2024, and the Customs show cause notice dated June 21, 2024, along with all recovery proceedings. The judge directed the authorities to refund `2.95 crore, with interest, within four weeks.
AGPL had been granted benefits under the Service Exports from India Scheme (SEIS) under the Foreign Trade Policy 2015–2020. The dispute arose after the Directorate General of Foreign Trade issued Circular No. 06/2018, which restricted SEIS eligibility to “actual service providers” and excluded port operators.
The Court noted that the circular had already been quashed by the Bombay High Court in Atlantic Shipping Pvt. Ltd. v. Union of India (March 9, 2021) and by the Karnataka High Court in ECL Puyvast (India) Pvt. Ltd. v. Union of India (April 25, 2024). In the absence of any stay by the Supreme Court, it held that authorities could not rely on a circular declared ultra vires.
Rejecting the respondents’ plea on alternative remedy, the court observed that writ jurisdiction was maintainable where action was founded on an instrument already held invalid. It further held that the retrospective withdrawal of SEIS benefits, granted after scrutiny, was arbitrary and contrary to principles of natural justice, particularly as the impugned order had not been properly served.
Holding that authorities could not continue action based on a quashed policy, Justice Bheemapaka granted full relief to the petitioner.