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Legal Case Shots

Court judgements broken down into the case type, how the decision played out, and the lesson worth remembering, with the full judgement available as a PDF.

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Legal Case Shots is a searchable database of Supreme Court of India judgments, each broken down into the case type, the court's key holding, and a practical lesson learnt, with the full judgment available as a PDF for citation or deeper reading.

Tax & Customs LawSupreme Court of India

M/s. Nola Ram Dulichand Dal Mills & Anr. v. Union of India & Ors.

Civil Appeal · 2020 INSC 186Decided 14 Feb 2020
Civil Appeal No. 10636 of 2010
Justice Deepak Gupta · Justice Hemant Gupta

Background

The appellant traded in Guar Gum products and claimed export incentives under the "Vishesh Krishi Upaj Yojna" (Special Agricultural Produce Scheme) for goods it exported after purchasing them from a 100% Export Oriented Unit (EOU). A 2009 government circular clarified that 100% EOUs were ineligible for this incentive scheme, and the appellant's writ petition challenging that circular (as allegedly contrary to the underlying 2006 policy) was dismissed by the Rajasthan High Court. Three connected appeals involving the same policy and similarly-placed exporters were heard together.

Decision Breakdown

The Supreme Court held that the 2009 circular did not amend or modify the notified scheme but merely clarified an existing ambiguity: that EOUs, already excluded from the incentive, could not indirectly obtain the benefit by routing exports through ordinary purchasers like the appellant. The Court found the government had validly reserved the right under the scheme's own terms to specify ineligible categories of exports from time to time, and that allowing the appellant's claim would defeat the scheme's purpose of denying incentives to EOUs. All four connected appeals were accordingly dismissed.

Lesson Learnt

A government cannot be made to pay incentives to a business that is merely a conduit for an entity already excluded from a scheme; clarificatory circulars that remove ambiguity in a policy (as opposed to amending it) do not need to go through the same formal gazette-notification process as the policy itself.

M/s. Nola Ram Dulichand Dal Mills & Anr. v. Union of India & Ors. – Legal Case Shots | LegalAware