Retrospective withdrawal of drawback benefit held impermissible; later exports left for consideration under relaxation power.

A fiscal benefit once fixed and acted upon cannot be withdrawn retrospectively by later administrative or subordinate legislative change unless retrospective power is expressly authorised, so the earlier drawback benefit for castor oil medicinal/first special grade remained effective for the covered period. For the later export periods, no direct drawback relief was available because no drawback rate had been fixed after the testing change and the product was not covered under the relevant entry, but the exporters were left to seek consideration under the statutory relaxation power. The petition therefore succeeded in part, invalidating the retrospective exclusion while leaving subsequent relief to the relaxation mechanism.

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Issues: (i) Whether the respondents could retrospectively amend the drawback fixation so as to exclude castor oil medicinal first grade from the benefit already granted for the earlier period. (ii) Whether the petitioners were entitled to any relief for the subsequent export periods, including consideration under the relaxation power.

Issue (i): Whether the respondents could retrospectively amend the drawback fixation so as to exclude castor oil medicinal first grade from the benefit already granted for the earlier period.

Analysis: The drawback rates had been fixed by the Government for castor oil medicinal and/or castor oil first special grade for the relevant period, and exports had already been made on that basis. A later communication attempted to substitute the description only as castor oil medicinal, thereby excluding castor oil first special grade with retrospective effect. The governing principle applied was that, in the absence of authority to operate retrospectively, subordinate legislation or an administrative determination affecting accrued export benefits cannot be withdrawn retrospectively. The earlier fixation was also linked to the Government's own recognition of the export product under the then prevailing test and scheme.

Conclusion: The retrospective amendment was impermissible and ineffective against the petitioners for the earlier covered period.

Issue (ii): Whether the petitioners were entitled to any relief for the subsequent export periods, including consideration under the relaxation power.

Analysis: For the later periods, the Court noted that no drawback rate had been fixed for the goods after the change in the testing regime, and castor oil first grade was not covered under the relevant drawback entry as such. However, the Court accepted that the change in classification arose from the new test introduced by the Government and that the same product had earlier been exported as medicinal castor oil. In that situation, the petitioners were left to seek consideration under the relaxation power provided in the drawback rules.

Conclusion: No direct drawback relief was granted for the later periods, but the petitioners were permitted to apply for relaxation under the relevant rule.

Final Conclusion: The petition succeeded in part: the retrospective exclusion of the earlier drawback benefit was invalid, while the later-period claim was left to be considered through the statutory relaxation mechanism.

Ratio Decidendi: In the absence of express power, a fiscal benefit once fixed and acted upon cannot be withdrawn retrospectively by a later administrative or subordinate legislative change.

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