Genuine Exporters Should Not Face 'Needless Litigation' Over Inadvertent Procedural Lapses: Calcutta High Court

The Calcutta High Court has directed the Directorate General of Foreign Trade (DGFT) to take measures to ensure that genuine exporters are not driven to “needless litigation” over inadvertent procedural lapses that can be rectified in accordance with law.

“The DGFT authorities must take appropriate measures, whether by issuing comprehensive instructions or by suitable technological adjustments, to ensure that genuine exporters are not driven to needless litigation on account of inadvertent procedural lapses which can be rectified in accordance with law,” Justice Smita Das De observed.

The observation came in a case involving 17 EDI shipping bills of Sharma Export, where the “Reward” column had inadvertently been marked “N” instead of “Y”. The exporter sought correction of the declaration in connection with its claim under the Merchandise Exports from India Scheme (MEIS).

The exporter relied on the Supreme Court's judgment in Shah Nanji Nagsi Exports Pvt. Ltd. v. Union of India, where the court held that inadvertent procedural mistakes should not be treated as fatal to genuine exports, particularly when they can be corrected under statutory authority.

DGFT opposed the plea, arguing that the shipping bills had not been uploaded and transmitted by customs to its portal. It submitted that issuance of MEIS benefits is entirely online and that no further action could be taken until the shipping bills were transmitted.

DGFT also argued that the exporter should have approached the Policy Relaxation Committee for consideration of the issue on grounds of hardship instead of filing a writ petition.

Customs, however, informed the court that the declaration in the 17 shipping bills had already been manually amended from “N” to “Y” following the exporter's application.

The court noted that the issue involved coordination between customs and DGFT. It directed the authorities to carry out the amendments in accordance with Public Notice No. 30/2023 issued by the Commissioner of Customs on April 11, 2023.

The court accordingly directed customs and DGFT to allow amendment of the “Reward” column by substituting “N” with “Y”. Customs was directed to complete the amendment within four weeks and transmit the amended details to DGFT, which was directed to implement it within another four weeks.

Since customs had already made the amendments manually, the court further directed it to carry out the correction in the EDI system. The entire exercise was ordered to be completed on or before December 31, 2026.

For the Petitioner: Arijit Chakraborty, Nilotpal Chowdhury and Prabir Bera.

For Customs Authority: Bhaskar Prosad Banerjee, Tapan Bhanja and Gourab Karmakar.

For DGFT Authority: Uday Sankar Bhattacharya, Bibekananda Sinha and Banani Bhattacharya.