Statutory authority for SEZ restrictions required; temporary DTA clearance suspension quashed for lack of power.

Temporary suspension of DTA clearance from an SEZ warehouse was unsustainable because the respondents could not show any express power under the SEZ Act or SEZ Rules authorising the Specified Officer to impose that restriction in the manner adopted. The Gujarat HC held that an administrative action affecting SEZ operations must be traceable to statutory authority, and the absence of such authority rendered the impugned communication illegal and liable to be quashed. The Court also noted that pending show-cause proceedings could continue in accordance with law, but that separate adjudication did not validate the earlier suspension order.

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Issues: Whether the impugned order temporarily suspending DTA clearance from the petitioner's warehouse was liable to be quashed for want of authority under the SEZ framework.

Analysis: The impugned communication was issued to suspend DTA clearance till completion of investigation, but the record did not disclose any provision of the SEZ Act or the SEZ Rules authorising such suspension by the Specified Officer in the manner adopted. The respondents were unable to point out any statutory source empowering the impugned action. The Court also noted that parallel adjudication was already underway pursuant to the later show-cause notice, which could proceed in accordance with law, but that did not validate the earlier suspension order.

Conclusion: The impugned order was illegal and unsustainable and was quashed and set aside in favour of the petitioner.

Final Conclusion: The temporary suspension of DTA clearance could not be sustained in the absence of demonstrated statutory authority, though the respondents were free to continue with the pending show-cause proceedings in accordance with law.

Ratio Decidendi: An administrative restriction affecting SEZ operations must be traceable to an express statutory power, and where no such power is shown, the order cannot stand.

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