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Union of India & Ors. v. M/S Raj Grow Impex LLP & Ors.

Civil Appeal · 2021 INSC 307Decided 17 Jun 2021
Civil Appeal Nos. 2217-2218 of 2021
Justice A.M. Khanwilkar · Justice Dinesh Maheshwari · Justice Krishna Murari

Background

Several importers brought in large consignments of peas and other pulses relying on interim court orders that had stayed government notifications restricting such imports. After the restrictions were ultimately upheld, customs authorities treated the goods as "prohibited" and ordered their absolute confiscation, enhancing penalties on appeal. The Bombay High Court, however, directed release of the goods on payment of a redemption fine, prompting the Union of India to appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that the imported goods fell within the "prohibited goods" category and were liable to absolute confiscation, set aside the Bombay High Court's orders directing release, and restored/approved the customs appellate authority's orders enhancing the penalty. It criticised the practice of importers relying on interim stay orders to bring in restricted goods, noting this had earlier been flagged in its own judgment in the Agricas case, and held such importers could not claim equitable relief once the restriction was confirmed. As a concession, the Court allowed importers the option to re-export the goods within two weeks on payment of the redemption fine and compliance with other conditions, failing which absolute confiscation would follow, and also imposed costs of Rs. 2 lakh on each importer.

Lesson Learnt

Businesses that import restricted or prohibited goods on the strength of an interim court stay take a calculated risk: if the restriction is later upheld, they cannot expect the courts to shield them from confiscation or penalty merely because they acted under cover of an interim order.

Official source (sci.gov.in)View Judgment (PDF)

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