Sugar Exports Under Specific Permission Cannot Be Treated As 'Restricted' To Deny RoDTEP Benefits: Bombay High Court

Bombay High Court, in a significant ruling, held that exports of white refined sugar made under specific government permission cannot be categorized as "restricted" or "prohibited" to deny benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme.

A bench of Justice G. S. Kulkarni and Justice Aarti Sathe observed that characterizing quota-permitted exports as ineligible is a "misreading" of the export policy notifications. The Court emphasized that once an issue attains finality through a High Court judgment accepted by the Revenue, the department must not re-agitate the same before other forums.

The petitioners, including Rika Global Impex and several other sugar exporters, challenged the denial of duty credit benefits under the RoDTEP scheme for export of white refined sugar. While the government had transitioned the export policy for sugar from "free" to "restricted" via a May 2022 notification, it concurrently allowed exports subject to specific permission and quotas from the Directorate of Sugar. The Revenue department, however, treated these exports as ineligible "restricted" items under Notification No. 76/2021-Customs (N.T.), leading to the denial or recovery of duty credits.

The primary question before the court was whether sugar exported under specific permission and allocated quotas could be classified as "restricted or prohibited" under Notification No. 76/2021 to disqualify exporters from RoDTEP benefits. The court was also called upon to determine if the Revenue could take a contrary stand after the Gujarat High Court had already settled the issue in favor of exporters and the Supreme Court had dismissed the Revenue's challenge.

Revenue's Misinterpretation Of Export Policy

The Court noted that the RoDTEP scheme was promulgated to enable the remission of duties and taxes on exported products under the Foreign Trade Policy. While Notification No. 76/2021 excluded "goods which are restricted or prohibited for export," the Court found that the subsequent Notification No. 10/2015-20 did not impose a total embargo. Instead, it permitted exports of sugar under specific permission from the Directorate of Sugar, Department of Food and Public Distribution.

"The regulation is in terms of the notifications which certainly permit export of appropriate quota as may be approved by the Directorate of Sugar. If this is held to be an accepted position by the department, then certainly the benefits of the scheme cannot be denied to the petitioners."

Status Of Quota-Based Exports

The bench observed that the petitioners had acted upon the scheme and undertaken exports conducive to national interest and integral to the foreign trade policy. The court rejected the Revenue's contention that sugar had become a "blanketly restricted item," noting that the policy conditions specifically allowed for regulated exports. Characterizing such permitted exports as "prohibited" was held to be a patent arbitrary consideration.

"It would thus be difficult to accept a proposition that at the material time, the sugar could be considered to be a totally restricted/prohibited item for export so as to deprive the petitioners to the benefit of RoDTEP."

Finality Of Gujarat High Court Precedent

The Court took serious note of the fact that the Gujarat High Court had already decided this identical issue in Shree Renuka Sugars Ltd. vs. Union of India and M/s. Satyendra Packaging Ltd. The Department’s Special Leave Petition (SLP) against these orders was dismissed by the Supreme Court on April 26, 2024. Furthermore, the department's internal communications admitted that the issue had attained finality and that benefits were being granted to those specific litigants.

"Once the issue has attained finality, qua the department in view of an authoritative pronouncement by a High Court, similar contended issues ought not to be agitated by the department before the other High Courts."

Need For Uniform Policy On Central Legislations

Relying on the decades-old precedents of Maneklal Chunilal & Sons Ltd. and Jayantilal Ramanlal & Co., the Court emphasized the principle of inter-High Court comity. It held that for the sake of uniformity in all-India statutes, the view taken by one High Court should be followed by others unless it is demonstrably per incuriam. The bench remarked that the department asserting contrary positions before different High Courts leads to "judicial chaos."

"The situation further worsens by the department asserting a contrary position before such different High Courts, thereby inviting different interpretations and orders leading to judicial chaos. Such an issue certainly needs to be addressed by the Government of India in the National Litigation Policy."

Final Directions and Orders

The Court concluded that the petitioners are entitled to RoDTEP benefits. It directed the respondents to grant the rebate to those who exported sugar under specific permission. For petitioners from whom the benefit was already recovered, the Court ordered a refund within four weeks along with interest at the rate of 6% per annum. The respondents were further restrained from taking any coercive action for recovery in cases where the benefit had been granted.

The Bombay High Court reaffirmed that regulatory restrictions involving specific permissions do not equate to a total prohibition for the purpose of export incentive schemes. By holding the Revenue to the finality of prior judicial pronouncements, the Court strengthened the principle of tax certainty and administrative consistency. The ruling ensures that sugar exporters acting under valid government quotas are not arbitrarily deprived of their statutory fiscal benefits.

Date of Decision: 20 April 2026