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Issues: (i) Whether the pre-import condition and allied notifications restricting IGST exemption under Advance Authorisation were arbitrary, unconstitutional or violative of Article 14 of the Constitution of India. (ii) Whether the notice issued by the Directorate of Revenue Intelligence called for interference in writ jurisdiction.
Issue (i): Whether the pre-import condition and allied notifications restricting IGST exemption under Advance Authorisation were arbitrary, unconstitutional or violative of Article 14 of the Constitution of India.
Analysis: The exemption under the Advance Authorisation scheme was examined in the context of the GST regime and the statutory notifications issued to defer or restore IGST relief. The Court noted that the policy distinguished between basic customs duty and IGST because IGST operates through a credit chain, while the exemption under the scheme was temporarily restored with conditions to prevent diversion of imported inputs and to protect revenue. It was held that the scheme and the pre-import requirement were supported by the Foreign Trade Policy and the Handbook of Procedures, and that no material was shown to establish hostile discrimination or arbitrariness under Article 14.
Conclusion: The challenge to the pre-import condition and the impugned notifications failed and was rejected.
Issue (ii): Whether the notice issued by the Directorate of Revenue Intelligence called for interference in writ jurisdiction.
Analysis: The notice was issued in connection with an ongoing enquiry. The Court recorded that the petitioner's cooperation was necessary for the enquiry to reach its logical end and that the investigation should be completed expeditiously. On those facts, the notice itself did not warrant quashing at that stage.
Conclusion: The notice was not interfered with, and the petitioner was directed to cooperate with the enquiry.
Final Conclusion: The writ petitions were not successful. The Court upheld the impugned policy framework and allowed the revenue investigation to proceed, while directing expeditious completion of the enquiry.
Ratio Decidendi: A fiscal policy classification and conditional deferment of tax exemption under a statutory export scheme will not be struck down as arbitrary unless it is shown to be discriminatory, irrational, or lacking a rational nexus with revenue protection.
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