The Bombay High Court has directed the Directorate General of Foreign Trade (DGFT) to pay ₹50,000 in costs to Larsen & Toubro Limited (L&T) for systemic lapses that caused undue delays in the processing of Merchandise Exports from India Scheme ( MEIS ) benefits.
The judgement by the Division Bench of Justices M.S. Sonak and Jitendra Jain, underscores the court’s disapproval of bureaucratic inefficiencies and technological inadequacies impacting legitimate claims under government schemes.
L&T made an inadvertent error in marking “N” (No) instead of “Y” (Yes) in the reward field of its shipping bills while applying for MEIS benefits between 2017 and 2018. This mistake disqualified them from claiming the export incentive.
Despite correcting the error manually with customs’ approval in 2019, L&T faced a non-responsive DGFT portal that failed to process these corrections electronically, leaving the company unable to claim MEIS benefits amounting to ₹1.61 crore.
Repeated attempts by L&T to rectify the issue with DGFT were unsuccessful. The DGFT cited systemic limitations as the reason for its inability to recognize manually corrected shipping bills. Frustrated with the prolonged delay, L&T approached the Bombay High Court seeking relief.
The court criticised DGFT and related authorities for their failure to address systemic gaps. The judges observed that the petitioner had fulfilled all legal requirements to amend the shipping bills but was still denied the rightful benefits due to a lack of coordination between customs and DGFT.
In reference to its earlier ruling in Technocraft Industries (India) Limited vs Union of India, the court emphasised the need for inter-departmental coordination and technological upgrades to prevent similar grievances in the future. It stated that reliance on technology should not result in legitimate claims being denied due to bureaucratic inertia.
DGFT was ordered to process L&T’s application within 15 days and release the MEIS scrips if eligibility criteria were met. The DGFT and CBIC were instructed to update their systems to handle manual amendments electronically, ensuring smooth processing of claims under Section 149 of the Customs Act.
The Bombay High Court imposed a ₹50,000 cost on DGFT, payable to Tata Memorial Cancer Hospital as per request of counsel for L&T.
This decision not only provides relief to L&T but also sets a precedent for other exporters facing similar challenges with government portals.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
