Full Judgment Text
REPORTABLE
2025 INSC 1032
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(@ Special Leave Petition (C) No. 14919 of 2021)
M/S SHAH NANJI NAGSI EXPORTS PVT. LTD. … APPELLANT(S)
Versus
UNION OF INDIA AND ORS. …RESPONDENT(S)
O R D E R
1. Leave granted.
2. This appeal calls in question the judgment of the High Court of Judicature
at Bombay, Nagpur Bench, rendered on 02.08.2021 in Writ Petition No. 4095
of 2019, by which the writ petition instituted by the appellant was dismissed.
The High Court took the view that the error which had crept in while filing of
shipping bills was attributable to the customs broker, and that the appellant, if
so advised, could pursue his remedies against the broker but no relief could be
granted in exercise of writ jurisdiction.
3. The facts are largely undisputed. The appellant is a private company
Signature Not Verified
engaged in the export of corn starch. During the period between 22.07.2017 to
Digitally signed by
BORRA LM VALLI
Date: 2025.08.23
13:27:55 IST
Reason:
05.10.2017, the appellant effected 54 (fifty-four) shipping bills under Serial
1
No. 467 of Appendix 3B to the Foreign Trade Policy (FTP) 2015–20 and was
eligible for incentive under the Merchandise Exports from India Scheme
(hereinafter referred to as “MEIS”) contained in Chapter 3 of the Policy.
4. For each of these consignments, shipping bills were filed electronically on
the ICEGATE platform through the appellant’s customs broker. It so happened
that in the column requiring a declaration of intent to claim reward, the default
entry “No” which was to be altered as “Yes” was not done by Customs broker.
This inadvertent omission, though clerical in nature, prevented the shipping
bills from being transmitted to the repository of the Directorate General of
Foreign Trade (DGFT). The consequence was that the appellant’s claim for
MEIS reward could not be processed electronically.
5. On discovering the error, the appellant addressed a representation dated
13.03.2018 to the Regional Authority of DGFT. At the same time, an
application was made before the Deputy Commissioner of Customs, Mundra,
invoking Section 149 of the Customs Act, 1962. By an order dated 08.06.2018,
the Deputy Commissioner allowed the amendment of all shipping bills, so that
the declaration “No” was substituted by “Yes”. The fact of this correction is
not in dispute.
6. Despite the correction, when the appellant pursued the matter with DGFT,
it was informed that the system permitted no manual intervention and that
unless the shipping bills were originally transmitted with the entry “Yes”, they
2
could not be processed. The appellant as a consequence, was compelled to
approach the Policy Relaxation Committee (hereinafter referred to as “PRC”)
on 05.12.2018. The PRC, however, by a cryptic email dated 15.03.2019,
rejected the claim, stating merely that no merit or hardship was made out. No
reasons were assigned, nor was the appellant afforded an opportunity of being
heard.
7. Aggrieved thereby, the appellant instituted Writ Petition No. 4095 of 2019
before the Nagpur Bench of the Bombay High Court. During its pendency, a
Division Bench of the Bombay High Court delivered its judgment in Portescap
1
India Private Limited v. Union of India & Others on 02.03.2021, dealing
with an identical issue. A pursis was filed by the appellant bringing the
judgment to the notice of the Court. Nonetheless, by its judgment dated
02.08.2021, the High Court dismissed the writ petition.
8. We have heard Learned Counsel, Mr. Gagan Sanghi, appearing for the
Appellant and Shri S. Dwarakanath, Additional Solicitor General, appearing
for the Respondents. Learned counsel for the appellant submitted that the
exports were genuine, covered under the notified products in Appendix 3B,
and that the intention to claim MEIS was evident from the invoices. It was
urged that once the Customs authority had corrected the shipping bills under
Section 149, the bills stood regularised in law and were required to be acted
1
(2021) SCC OnLine Bom 285
3
upon. Further it was contended that the rejection by the PRC was arbitrary and
violative of the principles of natural justice as no reasons were assigned nor
hearing granted. Further it was submitted that the High Court, erred in
relegating the appellant to pursue remedies against the broker, when the
entitlement arose under the statutory scheme. Reliance was placed
upon Portescap India Private Limited (supra), which had attained finality.
9. Per contra, learned Additional Solicitor General appearing for the
respondents submitted that the FTP and Handbook of Procedures required a
declaration of intent to be made on the shipping bill at the time of export.
Unless “Yes” was so marked, the DGFT system could not accept the claim or
process the claim, and no manual over-writing was permissible. It was urged
that MEIS is a policy incentive, and strict compliance with procedure is
mandatory. The PRC, being the competent authority, considered the matter and
rejected it. The High Court was, therefore, correct in declining to grant relief.
10. The principal question for consideration is whether an inadvertent error in
the shipping bills, which was permitted to be corrected under Section 149 of
the Customs Act, can defeat an exporter’s claim under the MEIS?
11. This issue has received judicial consideration in a line of decisions of the
Bombay High Court. In Portescap India Private Limited (supra) , the Bombay
High Court dealt with a similar situation where an exporter had inadvertently
marked “N” (for No) instead of “Y” (for Yes) while filing shipping bills. The
4
High Court held that such a mistake was purely procedural and, once corrected,
could not extinguish substantive entitlement. The Court directed the authorities
to process the claim, emphasising that the purpose of Chapter 3 of the FTP is
to incentivise exports and that this object would be frustrated if inadvertent
mistakes were treated as insurmountable. The ratio of Portescap (supra) is
squarely applicable to the present case.
12. The principle was reiterated in Technocraft Industries (India) Limited v.
2
Union of India and Others , where the Bombay High Court again considered
denial of MEIS benefits despite the shipping bills having been corrected under
Section 149. The High Court noted the hardship faced by exporters and
directed the Customs and DGFT authorities to take appropriate steps to prevent
recurrence of such disputes, observing that systemic rigidity cannot be allowed
to defeat substantive rights. The facts of the present case furnish an illustration
of the very mischief which Technocraft (supra) sought to remedy.
3
13. In Larsen and Toubro Limited v. Union of India and Others , the
Bombay High Court dealt with a similar rejection of MEIS claims despite
amendment under Section 149. The High Court deprecated the rejection,
holding that technical or systemic constraints cannot override statutory
entitlements. The High Court went to the extent of imposing costs upon the
2
2023) SCC OnLine Bom 280
(
3
( 2024) SCC OnLine Bom 3565
5
DGFT. While we do not consider it necessary to adopt that course, we find
ourselves in respectful agreement with the principle enunciated that beneficial
schemes must be construed liberally and that procedural lapses, once rectified,
cannot be allowed to defeat substantive rights.
14. These decisions, read together, demonstrate a consistent judicial approach
that distinguishes between procedural formalities and substantive entitlements.
The scheme under Chapter 3 of the FTP is a beneficial one, intended to reward
exporters. Once exports are genuine and fall within the notified category,
inadvertent mistakes of procedure cannot be treated as fatal, especially where
they are corrected under statutory authority. The rejection by the PRC, bereft
of reasons and passed without hearing, falls foul of the principles of natural
justice. The High Court’s view that the appellant may proceed against the
customs broker fails to address the statutory entitlement which accrues to the
exporter under the scheme. Administrative technology must aid, not obstruct,
the implementation of the law.
15. In light of the above discussion, the appeal deserves to be allowed. The
judgment of the High Court dated 02.08.2021 is set aside. The rejection by the
Policy Relaxation Committee is quashed. The respondents are directed to
process the appellant’s claim for MEIS benefit on the basis of the amended
shipping bills and to pass appropriate orders in accordance with law within a
period of twelve weeks from the date of this judgment.
6
16. While we refrain from imposing costs, we cannot but observe that the
recurrence of such disputes, despite authoritative pronouncements
in Portescap , Technocraft Industries and Larsen and Toubro Limited ,
underscores the need for systemic correction. The Union of India, acting
through the Directorate General of Foreign Trade and the Central Board of
Indirect Taxes and Customs, 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 have been rectified in accordance with
law.
17. The appeal is allowed in the above terms. There shall be no order as to
costs.
.……………………………., J.
[ARAVIND KUMAR]
.……………………………., J.
[N.V. ANJARIA]
New Delhi;
August 19, 2025.
7
ITEM NO.37 COURT NO.15 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No.14919/2021
[Arising out of impugned final judgment and order dated 02-08-2021
in WP No.4095/2019 passed by the High Court of Judicature at Bombay
at Nagpur]
M/S SHAH NANJI NAGSI EXPORTS PVT. LTD. Petitioner(s)
VERSUS
UNION OF INDIA & ORS. Respondent(s)
IA No. 119989/2021 - EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT
Date : 19-08-2025 This matter was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE ARAVIND KUMAR
HON'BLE MR. JUSTICE N.V. ANJARIA
For Petitioner(s) : Mr. Gagan Sanghi, Adv.
Mrs. Farah Hashmi, Adv.
Mr. Rameshwar Prasad Goyal, AOR
For Respondent(s) : Mr. Raj Bahadur Yadav, AOR
Mr. S Dwarakanath, A.S.G.
Mr. Gurmeet Singh Makker, AOR
Mr. Rohit Khare, Adv.
Mr. Digvijay Dam, Adv.
Mr. Navanjay Mahapatra, Adv.
Mr. Ishaan Sharma, Adv.
Mr. Raghav Sharma, Adv.
Rajat Vaishnaw, Adv.
Abhyudey Kabra, Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeal is allowed in terms of the signed reportable order
placed on the file.
(NEHA GUPTA) (AVGV RAMU)
SENIOR PERSONAL ASSISTANT COURT MASTER (NSH)
1
2025 INSC 1032
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(@ Special Leave Petition (C) No. 14919 of 2021)
M/S SHAH NANJI NAGSI EXPORTS PVT. LTD. … APPELLANT(S)
Versus
UNION OF INDIA AND ORS. …RESPONDENT(S)
O R D E R
1. Leave granted.
2. This appeal calls in question the judgment of the High Court of Judicature
at Bombay, Nagpur Bench, rendered on 02.08.2021 in Writ Petition No. 4095
of 2019, by which the writ petition instituted by the appellant was dismissed.
The High Court took the view that the error which had crept in while filing of
shipping bills was attributable to the customs broker, and that the appellant, if
so advised, could pursue his remedies against the broker but no relief could be
granted in exercise of writ jurisdiction.
3. The facts are largely undisputed. The appellant is a private company
Signature Not Verified
engaged in the export of corn starch. During the period between 22.07.2017 to
Digitally signed by
BORRA LM VALLI
Date: 2025.08.23
13:27:55 IST
Reason:
05.10.2017, the appellant effected 54 (fifty-four) shipping bills under Serial
1
No. 467 of Appendix 3B to the Foreign Trade Policy (FTP) 2015–20 and was
eligible for incentive under the Merchandise Exports from India Scheme
(hereinafter referred to as “MEIS”) contained in Chapter 3 of the Policy.
4. For each of these consignments, shipping bills were filed electronically on
the ICEGATE platform through the appellant’s customs broker. It so happened
that in the column requiring a declaration of intent to claim reward, the default
entry “No” which was to be altered as “Yes” was not done by Customs broker.
This inadvertent omission, though clerical in nature, prevented the shipping
bills from being transmitted to the repository of the Directorate General of
Foreign Trade (DGFT). The consequence was that the appellant’s claim for
MEIS reward could not be processed electronically.
5. On discovering the error, the appellant addressed a representation dated
13.03.2018 to the Regional Authority of DGFT. At the same time, an
application was made before the Deputy Commissioner of Customs, Mundra,
invoking Section 149 of the Customs Act, 1962. By an order dated 08.06.2018,
the Deputy Commissioner allowed the amendment of all shipping bills, so that
the declaration “No” was substituted by “Yes”. The fact of this correction is
not in dispute.
6. Despite the correction, when the appellant pursued the matter with DGFT,
it was informed that the system permitted no manual intervention and that
unless the shipping bills were originally transmitted with the entry “Yes”, they
2
could not be processed. The appellant as a consequence, was compelled to
approach the Policy Relaxation Committee (hereinafter referred to as “PRC”)
on 05.12.2018. The PRC, however, by a cryptic email dated 15.03.2019,
rejected the claim, stating merely that no merit or hardship was made out. No
reasons were assigned, nor was the appellant afforded an opportunity of being
heard.
7. Aggrieved thereby, the appellant instituted Writ Petition No. 4095 of 2019
before the Nagpur Bench of the Bombay High Court. During its pendency, a
Division Bench of the Bombay High Court delivered its judgment in Portescap
1
India Private Limited v. Union of India & Others on 02.03.2021, dealing
with an identical issue. A pursis was filed by the appellant bringing the
judgment to the notice of the Court. Nonetheless, by its judgment dated
02.08.2021, the High Court dismissed the writ petition.
8. We have heard Learned Counsel, Mr. Gagan Sanghi, appearing for the
Appellant and Shri S. Dwarakanath, Additional Solicitor General, appearing
for the Respondents. Learned counsel for the appellant submitted that the
exports were genuine, covered under the notified products in Appendix 3B,
and that the intention to claim MEIS was evident from the invoices. It was
urged that once the Customs authority had corrected the shipping bills under
Section 149, the bills stood regularised in law and were required to be acted
1
(2021) SCC OnLine Bom 285
3
upon. Further it was contended that the rejection by the PRC was arbitrary and
violative of the principles of natural justice as no reasons were assigned nor
hearing granted. Further it was submitted that the High Court, erred in
relegating the appellant to pursue remedies against the broker, when the
entitlement arose under the statutory scheme. Reliance was placed
upon Portescap India Private Limited (supra), which had attained finality.
9. Per contra, learned Additional Solicitor General appearing for the
respondents submitted that the FTP and Handbook of Procedures required a
declaration of intent to be made on the shipping bill at the time of export.
Unless “Yes” was so marked, the DGFT system could not accept the claim or
process the claim, and no manual over-writing was permissible. It was urged
that MEIS is a policy incentive, and strict compliance with procedure is
mandatory. The PRC, being the competent authority, considered the matter and
rejected it. The High Court was, therefore, correct in declining to grant relief.
10. The principal question for consideration is whether an inadvertent error in
the shipping bills, which was permitted to be corrected under Section 149 of
the Customs Act, can defeat an exporter’s claim under the MEIS?
11. This issue has received judicial consideration in a line of decisions of the
Bombay High Court. In Portescap India Private Limited (supra) , the Bombay
High Court dealt with a similar situation where an exporter had inadvertently
marked “N” (for No) instead of “Y” (for Yes) while filing shipping bills. The
4
High Court held that such a mistake was purely procedural and, once corrected,
could not extinguish substantive entitlement. The Court directed the authorities
to process the claim, emphasising that the purpose of Chapter 3 of the FTP is
to incentivise exports and that this object would be frustrated if inadvertent
mistakes were treated as insurmountable. The ratio of Portescap (supra) is
squarely applicable to the present case.
12. The principle was reiterated in Technocraft Industries (India) Limited v.
2
Union of India and Others , where the Bombay High Court again considered
denial of MEIS benefits despite the shipping bills having been corrected under
Section 149. The High Court noted the hardship faced by exporters and
directed the Customs and DGFT authorities to take appropriate steps to prevent
recurrence of such disputes, observing that systemic rigidity cannot be allowed
to defeat substantive rights. The facts of the present case furnish an illustration
of the very mischief which Technocraft (supra) sought to remedy.
3
13. In Larsen and Toubro Limited v. Union of India and Others , the
Bombay High Court dealt with a similar rejection of MEIS claims despite
amendment under Section 149. The High Court deprecated the rejection,
holding that technical or systemic constraints cannot override statutory
entitlements. The High Court went to the extent of imposing costs upon the
2
2023) SCC OnLine Bom 280
(
3
( 2024) SCC OnLine Bom 3565
5
DGFT. While we do not consider it necessary to adopt that course, we find
ourselves in respectful agreement with the principle enunciated that beneficial
schemes must be construed liberally and that procedural lapses, once rectified,
cannot be allowed to defeat substantive rights.
14. These decisions, read together, demonstrate a consistent judicial approach
that distinguishes between procedural formalities and substantive entitlements.
The scheme under Chapter 3 of the FTP is a beneficial one, intended to reward
exporters. Once exports are genuine and fall within the notified category,
inadvertent mistakes of procedure cannot be treated as fatal, especially where
they are corrected under statutory authority. The rejection by the PRC, bereft
of reasons and passed without hearing, falls foul of the principles of natural
justice. The High Court’s view that the appellant may proceed against the
customs broker fails to address the statutory entitlement which accrues to the
exporter under the scheme. Administrative technology must aid, not obstruct,
the implementation of the law.
15. In light of the above discussion, the appeal deserves to be allowed. The
judgment of the High Court dated 02.08.2021 is set aside. The rejection by the
Policy Relaxation Committee is quashed. The respondents are directed to
process the appellant’s claim for MEIS benefit on the basis of the amended
shipping bills and to pass appropriate orders in accordance with law within a
period of twelve weeks from the date of this judgment.
6
16. While we refrain from imposing costs, we cannot but observe that the
recurrence of such disputes, despite authoritative pronouncements
in Portescap , Technocraft Industries and Larsen and Toubro Limited ,
underscores the need for systemic correction. The Union of India, acting
through the Directorate General of Foreign Trade and the Central Board of
Indirect Taxes and Customs, 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 have been rectified in accordance with
law.
17. The appeal is allowed in the above terms. There shall be no order as to
costs.
.……………………………., J.
[ARAVIND KUMAR]
.……………………………., J.
[N.V. ANJARIA]
New Delhi;
August 19, 2025.
7
ITEM NO.37 COURT NO.15 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No.14919/2021
[Arising out of impugned final judgment and order dated 02-08-2021
in WP No.4095/2019 passed by the High Court of Judicature at Bombay
at Nagpur]
M/S SHAH NANJI NAGSI EXPORTS PVT. LTD. Petitioner(s)
VERSUS
UNION OF INDIA & ORS. Respondent(s)
IA No. 119989/2021 - EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT
Date : 19-08-2025 This matter was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE ARAVIND KUMAR
HON'BLE MR. JUSTICE N.V. ANJARIA
For Petitioner(s) : Mr. Gagan Sanghi, Adv.
Mrs. Farah Hashmi, Adv.
Mr. Rameshwar Prasad Goyal, AOR
For Respondent(s) : Mr. Raj Bahadur Yadav, AOR
Mr. S Dwarakanath, A.S.G.
Mr. Gurmeet Singh Makker, AOR
Mr. Rohit Khare, Adv.
Mr. Digvijay Dam, Adv.
Mr. Navanjay Mahapatra, Adv.
Mr. Ishaan Sharma, Adv.
Mr. Raghav Sharma, Adv.
Rajat Vaishnaw, Adv.
Abhyudey Kabra, Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeal is allowed in terms of the signed reportable order
placed on the file.
(NEHA GUPTA) (AVGV RAMU)
SENIOR PERSONAL ASSISTANT COURT MASTER (NSH)
1