SEZ unit's claim for exemption from state taxes, duties and cess: court refuses writ circular, allows representation decision

A unit located in an SEZ sought a writ compelling State authorities to issue a circular/clarification recognizing exemption from State taxes, duties, levies, and cess. The HC held that, since the underlying controversy was pending before the SC, it could not issue a mandatory direction of the nature sought, so the prayer for such writ relief was refused. However, the HC clarified that State authorities were not barred from considering and deciding the unit's pending representation in accordance with law, expeditiously, and without contravening any SC order; the writ petition was disposed of without any finding on merits.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the Court could issue a writ of mandamus directing the State authorities to issue a circular/clarificatory instruction declaring that entry tax is not payable on import/procurement of goods by a Special Economic Zone unit.

(ii) Whether, notwithstanding the refusal to direct issuance of a circular, the Court should permit and/or require the State authorities to consider and dispose of the petitioner's pending representation, given that the underlying exemption dispute was already urged before the Tribunal and was stated to be pending before the Supreme Court with protective orders in place.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Mandamus to compel issuance of a circular/clarification on entry tax liability for an SEZ unit

Legal framework: The Court dealt with the permissibility of issuing a "mandatory direction" in writ jurisdiction in the specific context of directing the executive authorities to issue a circular/clarificatory instruction.

Interpretation and reasoning: The Court found it "apparent" that the petitioner had already urged before the Tribunal the same substantive point-exemption from tax under West Bengal State laws by reason of operating a manufacturing unit in an SEZ-and that the matter was stated to be pending before the Supreme Court. In that situation, the Court held that it could not grant a mandatory direction requiring the State authorities to issue a circular or clarification "of the nature sought for," especially when the issue was sub judice before the Supreme Court.

Conclusion: The Court conclusively declined to issue mandamus compelling the State authorities to issue the requested circular/clarification regarding entry tax non-payability for SEZ units.

Issue (ii): Whether the authorities may still consider and dispose of the pending representation despite the pendency before the Supreme Court

Legal framework: The Court addressed the scope of permissible administrative action during pendency of proceedings before the Supreme Court and the need to avoid violating any order passed by the Supreme Court.

Interpretation and reasoning: While refusing to compel issuance of a circular, the Court clarified that its order would not prevent the State authorities from "considering and disposing of" the petitioner's representation dated October 13, 2025. The Court conditioned such consideration on being "in accordance with law" and "without in any manner violating any order passed" by the Supreme Court, and directed that it be done "as expeditiously as possible." The Court also expressly refrained from expressing any opinion on the merits of the petitioner's claim or on the representation.

Conclusion: The Court permitted (and effectively encouraged) the State authorities to consider and dispose of the representation promptly, subject to compliance with law and non-violation of the Supreme Court's orders, while keeping the merits open.

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