Case Note & Summary
The petitioner, M/s. Wipro GE Healthcare Private Limited, a trading unit operating within a Special Economic Zone (SEZ), filed writ petitions under Articles 226 and 227 of the Constitution of India challenging Circular No.1 of 2014 issued by Respondent No.3 (Software Technology Parks of India), Circular dated 03.09.2014 issued by Respondent No.2 (Development Commissioner, Cochin SEZ), and Office Memorandum dated 22.06.2015 issued by Respondent No.1 (Union of India), along with consequential letters. The petitioner sought quashing of these impugned orders as being ultra vires Paragraph 6.11 of the Foreign Trade Policy (FTP) and constitutionally invalid. The core issue was whether trading units in SEZs are entitled to duty-free import of goods for re-export under the FTP. The respondents argued that such benefits were intended only for manufacturing units. The court, after hearing arguments, noted that the controversy was no longer res integra and was covered by three Division Bench decisions of the Madras, Gujarat, and Allahabad High Courts, which had consistently held that trading units are entitled to SEZ benefits. The court found that Paragraph 6.11 of the FTP does not restrict benefits to manufacturing units alone. Consequently, the impugned circulars and office memorandum were held to be ultra vires the FTP and were quashed. The writ petitions were allowed, and the respondents were directed to process the petitioner's applications for duty-free import in accordance with the FTP.
Headnote
A) Foreign Trade Policy - Special Economic Zone - Duty-free Import - Paragraph 6.11 of Foreign Trade Policy - The petitioner, a trading unit in SEZ, challenged circulars denying duty-free import of goods for re-export. The court held that Paragraph 6.11 does not restrict benefits to manufacturing units only; trading units are equally entitled. The impugned circulars were ultra vires the FTP and quashed. (Paras 1-10) B) Precedent - Binding Effect of Division Bench Decisions - The court followed three Division Bench decisions of Madras, Gujarat, and Allahabad High Courts, which held that trading units are entitled to SEZ benefits. No contrary view exists, and thus the petitions were allowed. (Paras 1-10)
Issue of Consideration
Whether the impugned circulars and office memorandum issued by the respondents, which deny the benefit of duty-free import of goods for re-export to trading units in Special Economic Zones (SEZs), are ultra vires Paragraph 6.11 of the Foreign Trade Policy (FTP) and legally valid.
Final Decision
The writ petitions are allowed. The impugned Circular No.1 of 2014, Circular dated 03.09.2014, Office Memorandum dated 22.06.2015, and consequential letters are quashed as being ultra vires Paragraph 6.11 of the Foreign Trade Policy. The respondents are directed to process the petitioner's applications for duty-free import in accordance with the FTP.
Law Points
- Foreign Trade Policy
- Special Economic Zone
- Duty-free import
- Trading units
- Manufacturing units
- Paragraph 6.11
- Ultra vires
- Circulars
- Res integra
- Division Bench decisions
