The Bombay High Court has urged the Union government to frame a clear national litigation policy to avoid judicial chaos arising from inconsistent stands by Central authorities before different High Courts on identical issues, particularly in tax matters [Rika Global Impex Limited v. Union of India].
In a judgment delivered on April 20, a Division Bench comprising Justices GS Kulkarni and Aarti Sathe stressed the need for judicial uniformity in the interpretation of Central laws.
The Court held that when an issue under a Central law has been decided against a department by one High Court and that decision has been accepted by the Union, the same contention ought not to be agitated before other High Courts.
“The situation further worsens by the department asserting a contrary position before such different High Courts, thereby inviting different interpretations and orders leading to judicial chaos. Such an issue certainly needs to be addressed by the Government of India either in the National Litigation Policy, so that uniform policy in respect of such issues is followed in proceedings before different High Courts in relation to Central Legislations and more particularly in tax matters," the Court said.
The Bench added that conflicting stands by the Centre across Courts run counter to a rational litigation strategy.
The observations came in a batch of writ petitions filed by sugar exporters seeking benefits under the Remission of Duties and Taxes on Export Products (RoDTEP) scheme for exports of white refined sugar.
The controversy centred around a May 2022 notification, which shifted sugar from the free to the restricted export category, and a September 2021 Customs notification that excluded goods restricted or prohibited for export from the RoDTEP's benefits.
The Revenue argued that, after the policy change, sugar became ineligible for duty credit under RoDTEP.
Various sugar exporters challenged this and sought to avail RoDTEP benefits. They contended that their exports continued under specific permissions and quantified quotas issued by the Directorate of Sugar and, therefore, could not be treated as prohibited exports.
The Court held that withholding the RoDTEP benefit would be arbitrary and concluded the exporters were eligible for the RoDTEP benefit.
The Court reasoned that it was difficult to classify sugar as a completely restricted or prohibited export item during the relevant period, especially since the government was allowing exports through allocated quotas.
The Court further treated the controversy as settled in light of earlier Gujarat High Court decisions, which had directed the grant of RoDTEP benefit to similarly placed sugar exporters. The Bench noted that the Supreme Court had also dismissed the Union government’s challenge against those Gujarat High Court orders.
The Bench also noted departmental communications acknowledging that the matter had attained finality and that RoDTEP benefits would have to be extended to those exporters.
Accordingly, it held that the sugar exporters (petitioners) before the Court were entitled to the RoDTEP benefits.
"The respondents (Revenue) are directed to grant benefit of rebate under the RoDTEP Scheme to the petitioners, who have exported sugar with specific permission under the conditions prescribed by the Directorate of Sugar as per the Notification No.19/2015-2020 dated 17 August 2021 and Clause 3 of paragraph 2 of the Notification No.76/2021-Customs (N.T.) dated 23 September 2021, and who have not been granted such benefit," the Court ordered.
Senior advocate Darius Shroff with advocate Rahul P Jain briefed by Alpha Chambers; advocates Janay Jain, Sansha Garud and Dhwani Parekh briefed by Jaykar and Partners; and advocates Abhishek Rastogi, Pooja M Rastogi, Meenal Songire, Aarya More and Chayank Bohra appeared for the petitioners.
Advocates Jitendra B Mishra, Ashutosh Mishra, Rupesh Dubey, Vikas Salgia, Shehnaz V Bharucha, Vikas Salgia, Dhanesh Shah appeared for the Union of India.
Advocates Yogendra Mishra, Jaymala Oswal, Ruju Thakkar and Sangeeta Yadav appeared for the Central Board of Indirect Tax and customs officials.
[Read Order]