Bombay High Court slammed the Centre’s inconsistent stands across courts, calling it “judicial chaos” and stressing the need for a clear national litigation policy. The Court also granted RoDTEP benefits to sugar exporters, reinforcing judicial consistency in tax matters.
The Bombay High Court has strongly advised the Union government to introduce a clear and consistent national litigation policy, pointing out that taking different stands on the same legal issue before different High Courts is creating confusion and uncertainty in the judicial system—especially in tax-related matters.
In the case of Rika Global Impex Limited v. Union of India, a Division Bench of Justices GS Kulkarni and Aarti Sathe delivered an important judgment on April 20. The Court highlighted that when a matter under a Central law has already been decided by one High Court and accepted by the Union government, the same issue should not be re-argued differently in another High Court.
The Bench clearly warned against inconsistent legal positions taken by government departments. It observed, “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 judges stressed that such conflicting approaches go against a logical and fair litigation strategy and only increase confusion in the legal system.
This case arose from multiple writ petitions filed by sugar exporters who were seeking benefits under the Remission of Duties and Taxes on Export Products (RoDTEP) scheme. The dispute mainly revolved around two government notifications. A May 2022 notification had shifted sugar exports from “free” to “restricted” category, while a September 2021 Customs notification stated that goods which are restricted or prohibited for export would not be eligible for RoDTEP benefits.
The Revenue department argued that once sugar exports were restricted, exporters should not get duty credit benefits under the RoDTEP scheme. However, the exporters challenged this position. They argued that their exports were still being allowed under specific permissions and quota allocations issued by the Directorate of Sugar. Therefore, such exports could not be treated as completely prohibited.
After examining the facts, the High Court agreed with the exporters. It held that denying them the RoDTEP benefit would be unfair and arbitrary. The Court also noted that during the relevant period, sugar could not be treated as a completely restricted or banned item, especially when the government itself was allowing exports through fixed quotas.
The Bench further observed that the issue was already settled by earlier judgments of the Gujarat High Court, which had granted similar benefits to other sugar exporters. Importantly, the Supreme Court of India had dismissed the Union government’s challenge against those decisions, effectively confirming the legal position.
The Court also referred to internal communications of the department which acknowledged that the matter had reached finality and that RoDTEP benefits should be given to eligible exporters.
Based on all these factors, the Bombay High Court ruled in favour of the petitioners and directed the authorities to grant them the benefits. It ordered,
“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, along with advocate Rahul P Jain and teams from Alpha Chambers, Jaykar and Partners, and other legal representatives, appeared for the petitioners. On the other side, multiple advocates represented the Union of India and officials from the Central Board of Indirect Taxes and Customs.
This judgment is significant because it not only provides relief to sugar exporters but also sends a strong message to the government about the urgent need for consistency in legal positions across courts to avoid what the Court described as “judicial chaos.”
Case Title:
Rika Global Impex Limited v. Union of India
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