Delhi High Court Sets Aside 'Rubber-Stamped' PRC Orders Rejecting Exporter's Duty Relief Claim

The Delhi High Court has set aside three Policy Relaxation Committee orders rejecting O.C. Sweaters LLP's request to count two export shipments under the Advance Authorisation Scheme.

The court held that the authorities mechanically rejected the case without meaningfully considering the exporter's contention that a technical glitch prevented it from availing the scheme benefit.

“the orders passed by the concerned authorities are merely mechanical in nature and amount to rubber-stamping, without reflecting any independent application of mind,” the Court observed.

Justice Purushaindra Kumar Kaurav remanded the matter to the competent authority for fresh consideration. The Court directed that O.C. Sweaters be given an effective opportunity of personal hearing before a fresh reasoned order is passed.

O.C. Sweaters told the Court that although it had obtained an Advance Authorisation and sourced raw materials domestically under an invalidation letter, two export shipments made under two bills dated December 3, 2021 could not be processed under the scheme because the authorisation data was not transmitted to the customs/ICEGATE system.

According to the petitioner, it repeatedly flagged the issue with the authorities, but no corrective action was taken. With the export deadline approaching and the order at risk of cancellation, it said it was compelled to file the shipping bills under the zero-rated scheme. The petitioner said it nevertheless mentioned the authorisation details in the shipping bills and GST invoices.

The exporter later approached the Policy Relaxation Committee seeking relaxation on grounds of genuine hardship. Its request was rejected on January 3, 2023, and two subsequent review attempts also failed, despite repeated requests for a personal hearing.

Before the High Court, the petitioner argued that the inability to avail the scheme benefit arose from circumstances beyond its control. It said the authorities failed to properly consider its case, even though it had fulfilled its export obligations within the prescribed period.

The Court noted that the Foreign Trade Policy empowers the authorities to grant relaxation in cases involving genuine hardship. It also recognises the importance of personal hearing in grievance redressal.

The Court found that the impugned orders did not meaningfully consider whether the petitioner had been prevented from availing the scheme benefit due to the alleged technical issue despite repeated representations.

Relying on the Supreme Court's ruling in Kranti Associates v. Masood Ahmed Khan, the Court reiterated that administrative and quasi-judicial decisions must contain clear reasons and cannot be reduced to rubber-stamp approvals.

The Court also found merit in the petitioner's grievance that no personal hearing was granted despite repeated requests.

Accordingly, the Court set aside the three impugned orders and remanded the matter for fresh adjudication. It clarified that it had expressed no final opinion on the merits of the exporter's claim.