Strict construction of export policy bars CST reimbursement for inter-EOU purchases before later clarification.

Fiscal policy provisions on Central Sales Tax reimbursement under the Foreign Trade Policy were construed strictly according to their express language. The policy and related office memorandum were read to permit reimbursement for purchases from the Domestic Tariff Area, not for supplies from one Export Oriented Unit to another. A later clarification under the Foreign Trade Policy 2015-20, which extended reimbursement to additional specified categories, was treated as prospective and did not alter the position for earlier years. On that basis, reimbursement was not available for inter-EOU purchases for the periods in question.

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Issues: Whether a 100% Export Oriented Unit was entitled to reimbursement of Central Sales Tax for goods purchased from another Export Oriented Unit under the Foreign Trade Policy 2009-2014 and the Foreign Trade Policy 2015-20.

Analysis: The policy provisions and the clarifications issued under them were read together to determine the scope of reimbursement. The relevant policy language and the office memorandum made it clear that reimbursement of Central Sales Tax was contemplated for purchases from the Domestic Tariff Area, and not for goods supplied from one Export Oriented Unit to another Export Oriented Unit. The later clarification under the Foreign Trade Policy 2015-20 permitting reimbursement from DTA, SEZ, EOU and other specified units was treated as prospective, and the petitioner had not challenged the communications clarifying the earlier position. On that basis, the claimed entitlement for the prior financial years was held not to arise under the existing policy framework.

Conclusion: The petitioner was not entitled to reimbursement of Central Sales Tax on purchases from another Export Oriented Unit for the periods in question.

Final Conclusion: The writ petitions failed because the policy, as clarified, did not support reimbursement of Central Sales Tax for inter-EOU purchases for the relevant years.

Ratio Decidendi: Fiscal policy provisions governing tax reimbursement must be construed strictly according to their express language, and a later clarification operates only in accordance with its stated temporal reach unless the earlier clarification is successfully challenged.

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