SC allows Adani Power’s appeal, sets aside Gujarat HC order over customs duty

The Supreme Court on Monday set aside the Gujarat High Court’s 2019 verdict, which had declined to grant relief to Adani Power Limited over the levy of customs duty on electrical energy generated in its power plant located in an SEZ and supplied to the domestic tariff area (DTA).

A bench of Justices Aravind Kumar and NV Anjaria noted that the High Court in July 2015 had struck down the levy of customs duty on electrical energy cleared by the firm from its SEZ unit into the DTA from June 26, 2009, to September 15, 2010. It said the Supreme Court had, in November 2015, declined to interfere with the High Court’s 2015 verdict.

“Accordingly, we hold that once the 2015 judgment had declared the levy to be ultra vires and this court had declined interference, it was incumbent upon the administrative authorities to conform their conduct to that declaration,” the bench said. It further said, “Judicial pronouncements are not advisory opinions; they are binding commands of law.”

The bench said that when the executive continues to enforce, under a new guise, a levy that has been judicially struck down, it acts in defiance of constitutional discipline and erodes public confidence in the rule of law. “Finality of adjudication is an essential component of good governance. The repetition of an invalidated levy through successive notifications compels needless litigation, burdens the courts and subjects citizens to prolonged uncertainty,” it said.

The Supreme Court said the authorities were obliged to treat the matter as concluded and ought to have extended the benefit of the 2015 decision uniformly to all subsequent periods until the law was altered by legislative action. The Supreme Court delivered its verdict on an appeal by Adani Power Ltd and others challenging the June 28, 2019, verdict of the High Court.