S.A. Exports Vs Additional District General of Foreign Trade & Ors. (Calcutta High Court)
The Calcutta High Court dismissed a writ petition filed by S.A. Exports, which sought to resurrect a claim for the balance of duty credit scrip under the Incremental Exports Incentivisation Scheme. The Court found the claim to be excessively delayed, holding that the petitioner’s failure to act for a prolonged period, even after a favorable judicial interpretation, rendered the claim “dead” and impermissible to be unsettled after approximately seven years.
Background and Scheme Details
The petitioner, a registered partnership engaged in foreign trade, sought the benefit of the Incremental Exports Incentivisation Scheme, governed by Notification No. 3 dated April 18, 2013, and Notification No. 43 dated September 25, 2013, issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.
The claim related to the export period of April 1, 2013, to March 31, 2014, against the preceding year. The petitioner’s total entitlement was calculated at Rs.1,66,37,438.86/−. However, the petitioner, interpreting Notification No. 43 as imposing an upper limit, restricted its application (filed on January 23, 2015) in paragraph B-3 to only Rs.1 crore. The Foreign Trade Development Officer accordingly permitted the credit to the petitioner to the extent of Rs.1 crore via an authorization letter dated May 14, 2015.
Favorable Judicial Interpretation
The legal landscape surrounding the scheme’s upper limit changed following the judgment of the Delhi High Court in M/s. Welldone Exim Pvt. Ltd. vs. Director General of Foreign Trade (2018). In that case, the Delhi High Court interpreted the relevant Public Notice and notifications, holding that the clauses detailing the Rs.1 crore limit were intended for greater scrutiny by the Regional Authority for claims exceeding that amount, and did not prescribe an absolute upper limit. This interpretation meant exporters were potentially entitled to the full calculated amount, not just the Rs.1 crore cap.
The significance of the Welldone Exim ruling was solidified when the Supreme Court dismissed the Special Leave Petition filed against it on July 18, 2023.
Calcutta High Court’s Rejection
The petitioner argued that, following the Welldone Exim judgment, it realized its true entitlement and filed representations with the authorities, the latest being on January 13, 2025, seeking the balance duty credit scrip. When the representation was not acted upon, the petitioner approached the Calcutta High Court.
The Calcutta High Court, however, focused its analysis entirely on the issue of delay and finality. The Court noted that the initial claim had been settled by the petitioner’s own application on January 23, 2015, where the claim was voluntarily restricted to Rs.1 crore, and this restricted claim was subsequently sanctioned on May 14, 2015.
The Court observed that despite the Delhi High Court’s ruling in Welldone Exim being delivered on April 12, 2018, the petitioner failed to take any steps to challenge the original sanction or claim the balance amount for a period of up to seven years thereafter.
The Court held that the petitioner was attempting to “resurrect the dead claim” by filing a writ petition at a “late stage.” Invoking the established judicial principle against unsettling matters that have reached finality after a significant period, the Court stated, “It is well-settled that a settled issue cannot be permitted to unsettled after more than a decade.” While the delay from the initial sanction was less than a decade, the delay of seven years post-Delhi High Court judgment was considered fatal.
Consequently, the Court dismissed the writ petition, finding the delay impermissible.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. The instant writ petition has been filed, inter alia, praying for direction upon the respondent No. 1 to consider the representations made by the petitioner in connection with the issue of balance duty credit script amounting to Rs. 16,637,438.86/-. The petitioner claims to be a registered partnership and is engaged in the business of foreign trade. The petitioner is interested in seeking the benefit of a Judgment delivered by the Hon’ble High Court to Delhi in the case of M/s. Welldone Exim Pvt. Ltd. vs. Director General of Foreign Trade reported in 2018 SCC online Delhi 8480 as regards the interpretation of the notification No. 3 dated 18th April, 2013 and notification No. 43 dated 25th September, 2013 issued an exercise of powers conferred under Section 5 of the Foreign Trade ( Development and Regulation ) Act, 1992 (hereinafter referred to as the said Act) which specifically deals with the Incremental Exports incentivization Scheme (hereinafter referred to as the said Scheme).
2. According to the petitioner, the petitioner being entitled to benefit of the said Scheme had duly made an application in requisite format before the appropriate authorities for the export period that is 1st April, 2013 to 31st March, 2014 vis a vis 1st April, 2012 to 31st March, 2013, in format ANF 3F with the Government of India, Ministry of Commerce and Industries. Accordingly, the petitioner had computed the export eligibility having regard to the cap provided in the notification No. 43 dated 25th September, 2013 to the extent of Rs. 1 crores notwithstanding the entitlement of the petitioner being Rs. 16,637,438.86/-. The aforesaid fact would corroborate from paragraph no. B-3 of the application filed by the petitioner on 23rd January, 2015.
3. On the basis of the aforesaid, the Foreign Trade Development Officer had permitted credit to the petitioner vide authorization letter dated 14th May, 2015 to the extent of Rs.1 crore. By the judgment delivered by the Hon’ble Delhi High Court in the case of M/s. Welldone Exim Pvt. Ltd. (supra) taking into consideration the aforesaid notifications in paragraph 6 thereof had observed as follows:-
“6. The aforesaid public notice in our opinion settles the position beyond any doubt and debate. This public notice clarifies that amendment in form of clauses (i) and (ii) to paragraph 3.14.5 (c) of Foreign Trade Policy were to ensure that annual claims n excess of Rs.1 crore should be subjected to greater scrutiny by the Regional Authority. In other words, the two newly inserted clauses had to be read harmoniously. Clauses (i) and (ii) were not introduced and inserted as clauses, but as a part of subparagraph (c) to paragraph 3.14.5. Clauses (i) did not put or prescribe an upper limit. To interpret it differently would make clause (ii) otiose and redundant. The public notice No. 28/2009-14 (RE-2-013) dated 25th September, 2013 had set out the procedure for scrutiny of claims in excess of Rs.1 crore by giving details of the documents and particulars to be submitted by the exporter. Clearly, this was not required and necessary if R. 1 crore was the upper limit, and therefore claims over this amount were not required to be scrutinized and examined”.
4. Although a Special Leave Petition was file before the Hon’ble Supreme Court which was registered as Special Leave to Appeal (C) No.(S) 12878 of 2019, by an order dated 18th July, 2023, the Hon’ble Supreme Court after condoning the delay had dismissed the Special Leave Petition. Following the above, by an order dated 25th August, 2023, Coordinate Bench of this Court in respect of a person claiming duty credit scrip had directed the authorities to consider such representation.
5. Mr. Roy, learned advocate appearing in support of the writ petition would submit that although the petitioner had made a representation to the authorities on 13th January, 2025, since such representation was not considered the same was followed up by further representation and ultimately having no other recourse, the petitioner has approached his Court.
6. Mr. Thakur, learned advocate appears on behalf of the respondents.
7. Having heard the learned advocates appearing for the respective parties, I find that the situation at hand insofar as the petitioner is concerned was set at rest by the application filed by the petitioner on 23rd January, 2025. In fact, in the aforesaid application the petitioner by treating the Notification No. 53 dated 25th September, 2013 creating the upper limit for being entitled to its claim in paragraph B-3 of the above application restricted its claim to a sum of Rs.1 crore as against the original entitlement of Rs.1,66,37,438.86. The signature of the petitioner’s partner appears on the aforesaid application. On the basis of the above, the authorities by scrutinizing the petitioner’s application had allowed the benefit as claimed vide authorization letter dated 14th May, 2015. Although, the petitioner would contend that upon the judgment delivered by the Hon’ble Delhi High Court in the case of M/s. Welldone Exim Pvt. Ltd. (supra) as regards the upper limit has been interpreted and only thereafter the petitioner had realized the real entitlement under the aforesaid notification, I, however, find that notwithstanding the judgment of the Delhi High Court being delivered on 12th April, 2018, for a period of upto 7 years thereafter, no steps had been taken by the petitioner. The petitioner is interested to resurrect the dead claim by filing the writ petition and by seeking consideration of its representation at this late stage, which, in my view is not permissible. It is well-settled that a settled issue cannot be permitted to unsettled after more than a decade.
8. The writ petition fails and is accordingly dismissed without any order as to costs.
9. Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities.
