SEZ approval cancellation requires fresh reconsideration where disputed facts and later appellate findings may affect Net Foreign Exchange compliance.

Administrative cancellation of a Letter of Approval under SEZ conditions was challenged on the basis of alleged misdeclaration, alleged non-compliance with the Bond-cum-Legal Undertaking, and failure to establish positive Net Foreign Exchange. The HC found that the cancellation turned on disputed factual material, including the petitioner's import, export, domestic sales and foreign exchange position, and noted that a later appellate tribunal decision on the duty and penalty issue could affect the basis of the adverse findings. The impugned order was set aside and the matter remanded to the Board of Approval for fresh consideration, with liberty to file additional documents.

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Issues: Whether the order cancelling the Letter of Approval and rejecting the appeal, based on alleged misdeclaration, alleged violation of SEZ conditions and the petitioner's claimed failure to establish positive Net Foreign Exchange, warranted interference and remand.

Analysis: The adverse action rested on findings that the petitioner had misdeclared imports, failed to comply with the terms of the Letter of Approval and Bond-cum-Legal Undertaking, and had not furnished material to establish its import, export, domestic sales and foreign exchange position. However, the petitioner relied on the subsequent decision of the appellate tribunal on the duty/penalty issue and contended that the disputed amount was paid without prejudice. The disputed factual basis for the cancellation and rejection therefore required reconsideration, particularly in light of the tribunal's decision and any documents that could establish the petitioner's Net Foreign Exchange position.

Conclusion: The impugned order was set aside and the matter was remanded to the Board of Approval to reconsider the petitioner's appeal afresh, with liberty to place further documents.

Final Conclusion: The controversy was not finally determined on merits at this stage, and the matter was sent back for fresh adjudication by the appellate authority.

Ratio Decidendi: Where an administrative cancellation turns on disputed factual findings and a later appellate determination may affect the basis of those findings, the matter should be reconsidered afresh rather than sustained without re-evaluation of the relevant material.

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