PIL Not Tool For Settling Policy Or Reopening Decisions Of Tribunals: Madras High Court Dismisses PIL To Curb Imports Under DFIA Scheme
The High Court held that Paragraph 2.58 of the Foreign Trade Policy, which makes the DGFT’s interpretation final, cannot take away the jurisdiction Parliament has given to CESTAT.
Chief Justice Sushrut Arvind Dharmadhikari, Justice G. Arul Murugan, Madras HC
The Madras High Court has held that a public interest litigation is meant for those who cannot reach the Court themselves, and is not a tool for settling policy or for reopening decisions of other forums.
The Court dismissed a public interest petition filed by a 26-year-old Chennai resident seeking directions to curb imports under the Duty Free Import Authorisation (DFIA) scheme.
The petitioner also sought a declaration that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has no jurisdiction to interpret Foreign Trade Policy matters. The Court found that the petition was based on internet reports, did not name a single importer or bill of entry, and was not preceded by any representation to the authorities.
The Court further held that a writ of mandamus cannot be issued to enforce a condition whose legal force is itself in serious doubt, and that a stranger cannot challenge Tribunal orders which the Union of India itself has not chosen to challenge.
The Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan observed, “A public interest litigation is meant for those who cannot reach the Court themselves. It is not a tool for settling policy or for reopening decisions of other forums. The Court must be satisfied that the petitioner is acting in good faith, that the facts are pleaded with care, and that the relief sought is one the Court can properly grant. The present petition does not meet the aforesaid standard.”
Advocate Pooja Thorat appeared for the Petitioner, while Senior Panel Counsel A. Kumaraguru appeared for the Respondents.
Brief Facts
DFIA is a post-export scheme under Chapter 4 of the Foreign Trade Policy (FTP), issued for products for which Standard Input Output Norms (SION) are notified. The authorisation is transferable, and the holder can import inputs duty free.
By Public Notice No. 41, the Directorate General of Foreign Trade (DGFT) amended the SION for certain food products, adding value caps for some inputs and an actual user condition for others. The petitioner pleaded that importers ignore these conditions on the ground that they cannot be imposed by a public notice and can be imposed only by a notification in the Official Gazette.
The petitioner relied on two orders of CESTAT. In Frunuts Exim LLP, the Mumbai Bench allowed duty-free import of dried cranberries, and in Global Exim, the Kolkata Bench allowed duty-free import of citric acid. Both Benches held that the value cap and the actual user condition, imposed only by public notice, could not be used to deny the exemption, relying on the Supreme Court’s decision in Viraj Impex Pvt. Ltd. v. Union of India and decisions of the Bombay and Rajasthan High Courts.
The petitioner’s second grievance concerned the Remission of Duties and Taxes on Export Products (RoDTEP) scheme. Notification No. 70/2023 extended RoDTEP to exports by Advance Authorisation holders, Export Oriented Units and Special Economic Zone units, but did not mention DFIA.
The petitioner asserted that DFIA exporters still claim RoDTEP and thereby get a double benefit, even though the DGFT had informed the Central Board of Indirect Taxes and Customs (CBIC) that DFIA exports are not eligible for RoDTEP.
The petitioner sought directions for an inquiry against officers who permitted DFIA imports without verifying compliance with the actual use condition and value cap, issuance of show cause notices to all beneficiary importers, and a declaration that only the DGFT, and not the RoDTEP Committee, is the final authority on exporter eligibility under RoDTEP.
The petitioner relied on Sections 9 and 19 of the Foreign Trade (Development and Regulation) Act, 1992 and on Paragraphs 1.03, 2.04 and 2.58 of the FTP. It was argued that the DGFT can lay down procedures, including value caps and actual user conditions, and that its decision on policy is final.
Observations/Findings of the Court
Examining the pleadings, the Court noted, “The petitioner’s own affidavit says he learnt of the alleged misuse from reports on the internet. He did not mention the name of any importer, nor any bill of entry is cited, or the amount of alleged loss is stated. The statement that there are “regular imports” at the Port of Chennai is not backed by a single instance. He admits that he made no representation to any respondent. The two Tribunal orders he relies on arose at Mumbai and Kolkata, not at Chennai.”
On the prayer for mandamus, the Court held, “A writ of mandamus needs a clear legal duty. We cannot direct officers to enforce a condition whose legal force is itself in serious doubt. If the Central Government or the DGFT is of the opinion that such conditions are needed to protect revenue, the remedy is simple. They can issue the proper notification. Whether to do so or not is a matter of policy. This Court cannot direct the executive to frame it.”
Rejecting the prayer for inquiry and show cause notices, the Court observed that no officer was named in the petition and that recovery of duty under the Customs Act, 1962 requires a notice to a particular person, on particular facts, by the proper officer. It held that a roving inquiry against unnamed persons cannot be ordered in a public interest petition.
On the challenge to the CESTAT orders, the Court noted that they were judicial orders passed in appeals under Section 129A of the Customs Act, where the Tribunal had to read the FTP to decide whether a customs exemption was available.
It observed, "The Revenue was a party before the Tribunal. If it felt aggrieved, Chapter XV of the Customs Act gave it a remedy by way of appeal. The Union of India is the first respondent here. It has not said it is aggrieved by those orders. The petitioner, who is a stranger, cannot do what the Union of India does not chose to do."
Noting that the importers in those cases were not before it, the Court held that a declaration that CESTAT can never interpret the FTP is far too wide. "The Tribunals have jurisdiction under the Customs Act. Paragraph 2.58 of the FTP, which makes the DGFT’s interpretation final, is a policy provision. It cannot take away a jurisdiction that Parliament has given”, it added.
Accordingly, the Court dismissed the writ petition without costs.
Cause Title: S. Santhosh Kumar v. Union of India & Ors. [W.P. No. 45612 of 2026]
Appearances:
Petitioner: Advocate Pooja Thorat for Advocate S. Vedhavel.
Respondents: Senior Panel Counsel A. Kumaraguru and Senior Panel Counsel M. Santhanaraman.