Retrospective application of interim stay rejected for pre-existing consignments, and customs clearance could not be withheld without BIS certification.

Gujarat HC held that an interim stay on rescission of a quality control order could not be applied retrospectively to consignments arising from concluded commercial transactions and bills of lading issued before the stay. The shipments had been arranged during the BIS-free regime that followed rescission, and customs authorities were not justified in using the later interim order to require BIS certification for earlier crystallised transactions. On that basis, withholding customs clearance was found arbitrary, and relief was granted to the petitioner.

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Issues: Whether the interim stay order on the rescission of the quality control order could be applied retrospectively to consignments arising from concluded commercial transactions and bills of lading issued before the interim order, so as to insist upon BIS certification and withhold customs clearance.

Analysis: The transactions were found to have been entered into during the subsistence of the BIS-free regime created after rescission of the quality control order. The consignments had been shipped pursuant to concluded commercial arrangements, and in respect of a substantial part of the cargo the bills of lading were issued before the interim stay. The customs authorities were held not justified in treating the later interim order as governing earlier crystallized transactions and in withholding clearance by insisting on BIS certification.

Conclusion: The retrospective application of the interim stay was not sustained, and the refusal to clear the consignments was held arbitrary; relief was granted to the petitioner.

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