Rajasthan HC dismisses customs duty exemption challenge citing lack of territorial jurisdiction over export benefits

The Rajasthan HC dismissed a writ petition challenging denial of customs duty exemption on exported goods, ruling it lacked territorial jurisdiction. The petitioner claimed exemption was denied due to cash payment instead of letter of credit as required by notification. However, the court found that the cause of action arose outside its territorial jurisdiction, as benefits were to be extended through Chennai port and other relevant facts occurred elsewhere. Following Supreme Court precedent in Union of India v. Adani Exports Ltd., the court held that territorial jurisdiction must be determined based on petition pleadings, and directed the petitioner to approach the appropriate forum.

---

---

Issues Involved:

1. Territorial Jurisdiction of the High Court to entertain the writ petition.
2. Validity of Notification No. 50/2023-Customs dated 25.08.2023.
3. Discrimination and arbitrariness of the notification.
4. Interim relief for the petitioner.

Summary:

1. Territorial Jurisdiction:
The primary issue addressed was the territorial jurisdiction of the Rajasthan High Court to entertain the writ petition. The petitioner argued that the notification was discriminatory and violative of Article 14 of the Constitution of India. The respondents contended that no part of the cause of action arose within the territorial jurisdiction of this Court, as all relevant actions occurred outside Rajasthan. The Court emphasized that the facts pleaded in the writ petition must have a nexus with the subject matter of the challenge to establish jurisdiction. The Court concluded that the petitioner's assumption that the benefit of exemption was denied solely based on the mode of payment was unfounded and that the integral facts constituting the cause of action arose outside its jurisdiction.

2. Validity of Notification No. 50/2023-Customs:
The petitioner challenged the validity of Notification No. 50/2023-Customs dated 25.08.2023, arguing that it was discriminatory and operated retrospectively, which is impermissible in law. The notification allowed the export of goods backed by irrevocable letters of credit but excluded those where payment was made by other modes, including advance payment. The Court noted that the petitioner's cargo entered the customs station before the publication of the notifications and that the formalities were completed before the notifications were issued.

3. Discrimination and Arbitrariness:
The petitioner claimed that the notifications were arbitrary as they penalized exporters who had made payments through modes other than irrevocable letters of credit. However, the Court found no specific averment in the writ petition that clearance was denied solely on the ground of the mode of payment. The Court stated that if the respondents had explicitly refused the exemption on this ground, it could have constituted an integral part of the cause of action. Since this was not the case, the Court held that the petitioner's grievance was based on an assumption without factual basis.

4. Interim Relief:
The petitioner sought interim relief to allow the export of goods with appropriate conditions. However, since the Court determined it lacked territorial jurisdiction, it did not address the merits of the interim relief sought.

Conclusion:
The Court sustained the objection to the maintainability of the writ petition on the ground of lack of jurisdiction and dismissed the writ petition, leaving the petitioner to seek remedy before the appropriate forum.

---