Administrative Technology Must Aid Law, Not Obstruct It: Supreme Court

Administrative Technology Must Aid Law, Not Obstruct It: Supreme Court

Introduction

The Supreme Court has ruled in favour of an exporter who was denied benefits under the Merchandise Exports from India Scheme (MEIS) due to a clerical error. The Court held that exporters cannot be deprived of legitimate entitlements under government incentive schemes merely because of inadvertent clerical mistakes, if those mistakes are later corrected through statutory processes.

Factual Background

The exporter mistakenly filed shipping bills with the column declaring “intent to claim MEIS” marked “No” instead of “Yes” due to the oversight of the customs broker. Though the Customs authorities amended the bills under Section 149 of the Customs Act, 1962, the Directorate General of Foreign Trade (DGFT) refused to process the claim, citing “system limitations.”

Procedural Background

The Policy Relaxation Committee (PRC) rejected the application through a cryptic email without granting a hearing. The Bombay High Court upheld this denial, holding the exporter bound by the broker’s mistake. The exporter then filed an appeal before the Supreme Court.

Contentions and Observations

• Beneficial Schemes Must Be Construed Liberally: The Court stressed that government incentive schemes should be interpreted liberally, and procedural lapses, once rectified, cannot be allowed to defeat substantive rights.
• Inadvertent Mistakes Not Fatal: The Court observed that inadvertent procedural errors, when corrected under statutory authority, cannot be treated as fatal.
• Rejection Without Hearing Violates Natural Justice: The Court held that the PRC’s rejection, issued without hearing and bereft of reasons, violated principles of natural justice.

Reasoning and Analysis

The Court emphasized that “administrative technology must aid, not obstruct, the implementation of the law.” The bench of Justices Aravind Kumar and NV Anjaria directed the DGFT and CBIC to introduce necessary technological advancements so that genuine exporters are not forced into needless litigation due to clerical errors later corrected under law.

Implications

This ruling provides strong protection for exporters, clarifying that clerical errors should not deprive them of entitlements under government schemes once such errors are duly rectified. It also directs the government to upgrade digital systems to ensure exporters are not penalized for mistakes arising from oversight.

In this case, the Petitioner was represented by Mr. Gagan Sanghi, Mrs. Farah Hashmi, and Mr. Rameshwar Prasad Goyal, Advocates.

The Respondents were represented by Mr. Raj Bahadur Yadav, Mr. S. Dwarakanath (ASG), Mr. Gurmeet Singh Makker, Mr. Rohit Khare, Mr. Digvijay Dam, Mr. Navanjay Mahapatra, Mr. Ishaan Sharma, Mr. Raghav Sharma, Mr. Rajat Vaishnaw, and Mr. Abhyudey Kabra, Advocates.