Adani Port Limited Gets Relief in Telangana HC
Justice Nagesh Bheemapaka held that once a policy circular was declared ultra vires by a constitutional court, its invalidity extended nationwide.
Hyderabad: The Telangana High Court has ruled in favour of Adani Gangavaram Port Limited (AGPL), striking down a 2018 policy circular that had curtailed export-linked incentives for certain port operators.
AGPL, which manages port and maritime logistics operations at the port, had earlier received incentives under the Service Exports from India Scheme (SEIS) for the financial years 2015-16 and 2016-17. The Directorate General of Foreign Trade (DGFT) issued the policy circular in 2018, restricting SEIS benefits to entities categorised as “actual service providers”, such as tug operators, effectively excluding port operators that had outsourced segments of marine services.
Challenging the move, AGPL contended that the DGFT had altered the scope of eligibility through an executive circular rather than through a statutory amendment to the Foreign Trade Policy. During the dispute, AGPL deposited approximately `2.95 crore, along with applicable interest, under protest to prevent coercive recovery measures.
Authorities maintained that the circular was merely interpretative, intended to ensure that SEIS incentives were granted only to those directly generating foreign exchange rather than intermediaries. They asserted that the cancellation order had been duly issued, even though postal delivery was unsuccessful.
Justice Nagesh Bheemapaka held that once a policy circular was declared ultra vires by a constitutional court, its invalidity extended nationwide. The court observed that the DGFT did not possess the authority to introduce new substantive restrictions beyond the framework of the Foreign Trade Policy. The court clarified that port operators delivering integrated services remained principal service providers, even if they subcontracted specific ancillary operations such as tug services.
Terming the government’s position legally unsustainable, the court annulled the cancellation of benefits and directed the refund of `2.95 crore with interest within four weeks.
