M/S. DYNATECH TOOLS AND DEVICES (BENGALURU) PRIVATE LIMITED, vs THE UNION OF INDIA
- Court
- Karnataka High Court
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WP No. 23860 of 2025
CNR: KAHC010520322025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 17 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA
WRIT PETITION NO.23860 OF 2025 (GM-RES)
BETWEEN:
M/S. DYNATECH TOOLS & DEVICES (BENGALURU)
PRIVATE LIMITED,
A COMPANY INCORPORATED
UNDER COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT NO.55,
RD
IV MAIN, 3 PHASE,
PEENYA INDUSTRIAL AREA,
BANGALORE – 560058.
REPRESENTED BY ITS DIRECTOR
SHRI. HEMANTH .K.V
AGED ABOUT 44 YEARS.
…PETITIONER
(BY SRI. RAJU H.Y., ADVOCATE)
AND:
1. THE UNION OF INDIA
REPRESENTED BY ITS SECRETARY,
DEPARTMENT OF COMMERCE,
MINISTRY OF COMMERCE AND INDUSTRIES,
VANIJYA BHAWAN,
NEW DELHI – 110011.
2. THE DIRECTOR GENERAL OF FOREIGN TRADE,
VANIJYA BHAWAN, ‘A' WING, NO.16,
AKBAR ROAD, NEW DELHI – 110 011.
3. THE POLICY RELAXATION COMMITTEE
REPRESENTED BY ITS CHAIRMAN
THE DIRECTOR GENERAL OF FOREIGN TRADE,
Digitally signed by
MAHALAKSHMI B M
Location: High Court
of Karnataka
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VANIJYA BHAWAN, 'A' WING, NO.16,
AKBAR ROAD, NEW DELHI – 110 011.
4. THE JOINT DIRECTOR GENERAL OF FOREIGN TRADE,
C & E WING, KENDRIYA SADAN,
TH
17 MAIN ROAD, KORAMANGALA,
BENGALURU, KARNATAKA – 560 034.
5. THE ASSISTANT DIRECTOR GENERAL
OF FOREIGN TRADE,
NO.4, ESPLANADE EAST, KOLKATA,
WEST BENGAL – 700 069.
…RESPONDENTS
(BY SRI. KUMAR M.N., CGC, FOR R-1 TO R-5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT
OR ORDER IN THE NATURE OF CERTIORARI TO QUASH THE
RD
REVIEW DECISION TAKEN BY THE 3 RESPONDENT IN RESPECT
CASE NO.14 AT ITS MEETING NO.24AM25 DATED 24.01.2025
(ANNEXURE-A) AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN
‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MRS. JUSTICE K.S. HEMALEKHA
ORAL ORDER
1. The petitioner, M/s. Dynatech Tools & Devices (Bengaluru)
Private Limited [ M/s. DT & D ], has preferred the present writ
petition under Articles 226 and 227 of the Constitution of India,
assailing the review decision dated 24.01.2025 [ the impugned
order ] passed by the Policy Relaxation Committee, Directorate
General of Foreign Trade [ respondent No.3 ] in Case No.14 at its
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meeting No.24AM25, whereby M/s. DT & D's request for
revalidation of Duty Credit Scrip [ DCS ] No.0219104254 dated
18.10.2021, issued under the Merchandise Exports from India
Scheme [ MEIS ] has been rejected. M/s. DT & D has consequently
sought a direction to respondent No.3 to revalidate the said DCS
for a period of three months to enable utilization of unutilized
balance amount.
Prefatory Facts
2. M/s. DT & D, is a company incorporated under the
Companies Act, 1956 and is engaged in the activity of manufacture
and supply of precision components in the domestic and export
markets. Under Chapter-3 of the Foreign Trade Policy 2015-2020
[ FTP ], the Government of India introduced the MEIS, providing
incentives to eligible exporters in the form of transferable DCS,
which could be utilized towards payment of customs duties on
imported goods.
3. M/s. Ess Kay Exports, Kolkata [ M/s. EKE ], was issued DCS
`
No.0219104254 dated 18.10.2021 for value of 16,80,296/- valid
for a period of 12 months, namely up to 17.10.2022. The said DCS
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was initially transferred to M/s. Exim Trade
Service Private Limited [ M/s. ETS Pvt. Ltd. ] on 27.04.2022, which,
in turn transferred the same to M/s. DT & D on 28.04.2022.
4. M/s. DT & D utilized an amount of ` 9,10,894/- towards
payment of custom duties and imported raw materials, leaving an
`
unutilized balance of 7,69,402/-. According to M/s. DT & D, owing
to the COVID-19 pandemic and the consequent disruption of its
manufacturing and commercial activities, it could not utilize the
entire value of the DCS within the prescribed period. It is further
contended that the employee entrusted with maintaining the import
and export records and accounts left the establishment in
September, 2022, without informing the management about the
unutilized balance of the DCS. Though M/s. DT & D became aware
of the unutilized balance during the first week of October, 2022, the
DCS could be traced only after its validity had expired.
5. In these circumstances, M/s. DT & D submitted an
application dated 09.11.2022 before respondent No.3 seeking
revalidation of the DCS for a further period of three months. The
said request was rejected by respondent No.3 in its meeting dated
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05.01.2023. Aggrieved by the rejection, M/s. DT & D submitted a
review application dated 30.01.2024. Respondent No.3 in its
meeting held on 24.01.2025 once again rejected the request on the
ground that M/s. DT & D had not furnished any cogent reason or
justification establishing genuine hardship. Being aggrieved by the
said decision, M/s. DT & D is before this Court.
Contentions
6. The learned counsel appearing for M/s. DT & D would
contend that respondent No.3 has failed to exercise the
discretionary power vested in it under paragraph 2.58 of the FTP in
its proper perspective. It is submitted that the said provision
empowers the competent authority to grant exemption, relaxation or
relief from the provisions of the FTP or procedures framed there
under, on the grounds of genuine hardship and adverse impact on
trade.
7. It is further contended that M/s. DT & D had specifically
explained the circumstances which prevented the utilization of the
DCS within its validity period, including the disruption of business
activity during the COVID-19 pandemic and the failure of the
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employee entrusted with maintaining the relevant records.
However, respondent No.3, without properly appreciating the
circumstances pleaded by M/s. DT & D, has rejected the request by
merely observing that no cogent reason or justification establishing
genuine hardship had been furnished. It is submitted that the
impugned decision is arbitrary, suffers from non-application of mind
and is liable to be set aside.
8. Per contra, the learned Central Government Standing
Counsel, appearing for the respondents reiterating the averments in
the statement of objections would contend that DCS was valid only
up to 17.10.2022 and M/s. DT & D, having purchased the same on
28.04.2022 with full knowledge of its validity period, was
under an obligation to utilize it within the prescribed period. It is
submitted that the failure of the employee to bring the unutilized
balance to the notice of the management amounts to an internal
administrative lapse, which cannot constitute genuine hardship
warranting relaxation under paragraph 2.58 of the FTP. It is further
contended that M/s. DT & D purchased the DCS after the major
COVID-19 restrictions had been relaxed and therefore, cannot rely
upon the pandemic as a justification for non-utilization of the DCS.
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It is contended that the power conferred under paragraph 2.58 of
the FTP is discretionary in nature and does not confer any vested
right upon M/s. DT & D to seek revalidation. Respondent No.3
having considered M/s. DT & D’s request and found that no
genuine hardship was established, has rightly rejected the same.
Reasons and Conclusion
9. It is not in dispute that DCS dated 18.10.2021 was valid up to
17.10.2022 and M/s. DT & D had bought re-validation of the
unutilized balance amount of ` 7,69,402. The question that arises
for consideration is:
“Whether respondent No.3 was justified in
rejecting M/s. DT & D's request without assigning
adequate reasons?”
10. Paragraph 2.58 of the FTP reads thus :
“ 2.58 Exemption from Policy/Procedures
“DGFT may in public interest pass such orders or grant
such exemption, relaxation or relief, as he may deem fit and
proper, on grounds of genuine hardship and adverse impact
on trade to any person or class or category of persons from
any provision of FTP or any procedures. While granting
such exemption, DGFT may impose such conditions as he
may deem fit after consulting the Committees as under:”
(Emphasis Supplied)
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11. The aforesaid paragraph empowers the competent authority
[respondent No.3] to grant exemption, relaxation or relief from the
provisions of the FTP or the procedures framed there under, in
public interest on the grounds of genuine hardship and adverse
impact on trade. The very purpose of conferring such discretionary
power is to enable the competent authority to examine cases where
relaxation of the prescribed conditions may be warranted, having
regard to the facts and circumstances of each case.
12. A perusal of the impugned order would indicate that
respondent No.3 has merely observed that M/s. DT & D had not
submitted any cogent reason or justification in support of genuine
hardship and consequently rejected the request. Except for said
observation, no reasons are assigned as to why the circumstances
specifically pleaded by M/s. DT & D do not warrant consideration
for relaxation under paragraph 2.58 of the FTP.
13. It is relevant to note that the minutes of the meeting of
respondent No.3 themselves indicate that the committee was
constituted to consider request seeking relaxation of the provisions
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of the FTP. When policy itself provides for relaxation on grounds of
genuine hardship, the competent authority is required to examine
the circumstances placed before it and assign reason for accepting
or rejecting the request. Merely stating that no cogent reason or
justification has been furnished, without disclosing the basis for
such conclusion, would not amount to due consideration of the
request.
14. Though M/s. DT & D cannot claim revalidation of the DCS as
a matter of right, the discretion conferred upon respondent No.3 is
required to be exercised in accordance with the object of paragraph
2.58 of the FTP. Under these circumstances, this Court is of the
considered view that the impugned order cannot be sustained and
the matter requires reconsideration by respondent No.3. Hence,
this Court pass the following:
ORDER
allowed.
i. The writ petition is
ii. The impugned order dated 24.01.2025 passed by
respondent No.3 - Policy Relaxation Committee, in
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set
case No.14 at meeting No.24AM25, is hereby
aside
.
iii. The matter is remitted to respondent No.3 for
reconsideration of M/s. DT & D's request for re-
validation of Duty Credit Scrip No.0219104254 dated
18.10.2021 after affording an opportunity of hearing to
M/s. DT & D and the reconsideration would be in light
of paragraph 2.58 of the Foreign Trade Policy 2015-
2022, pass a reasoned order in accordance with law
within a period of eight weeks from date.
iv. All contentions of the parties are kept open.
Sd/-
____________________
JUSTICE K.S. HEMALEKHA
CKL/AT
List No.: 1 Sl No.: 20