Delhi High Court Slams Directorate General Of Foreign Trade For Cancelling Trader's DEPB License 15 Yrs After SCN Was Issued

Justice Sachin Datta cited Vos Technologies India Pvt. Ltd. v. The Principal Additional Director General & Anr. (2024) where the Delhi High Court had emphasized that matters which have the potential of casting financial liabilities of penal consequences, cannot be kept pending for years and decades together.

The SCN in the case at hand was issued as far back as 2005 but the cancellation order came to be passed only in 2019. The single Judge observed,

“Despite the aforesaid facts, learned counsel for the respondent seeks to oppose the maintainability of the present petition on the premise that it is open for the petitioner to avail appellate remedy against the 38 “DEPB Scrip Cancellation letters”. The said contention is untenable. Even assuming that alternative remedy is available, this Court is not precluded from entertaining a writ petition in the event of gross violation of the principles of natural justice or in the context of abject arbitrariness/irrationality”

The SCN was issued against the petitioner under the Foreign Trade (Development & Regulation) Act, 1992. Eventually, cancellation orders in respect of 38 DEPB scrips/licenses issued in favour of the petitioner came to be passed.

DEPB (Duty Entitlement Pass Book) is an import/ export incentive scheme of the Indian Government.

The allegation was that Petitioner conspired with an entity and showed fictitious exports to obtain the license, which it later transferred to various importers/parties for valuable consideration on a principal-to-principal basis.

The High Court found that all the cancellation letters were identical in terms and showed no application of mind.

“Evidently, there has been no application of mind as to the factual aspects highlighted by the petitioner in reply dated 06.12.2005 to the impugned SCN, prior to issuing the said cancellation letter dated 07.08.2019,” Court observed.

It added that the non-adjudication of the show cause for decades was, by itself, a valid ground to set the same aside.

“It is also apparent that the cancellation order/letter dated 07.08.2019 was passed without any prior intimation/notice to the petitioner…which effectively condemned the petitioner unheard,” Court said.

As such, it set aside the impugned communications and allowed the petition.

Appearance: Mr. Indranil Banerjee and Mr. Shubhankar Jha, Advocates for Petitioner; Mr. Ruchir Mishra, Mr. Sanjiv Kumar Saxena, Ms. Poonam Shukla, Mr. Mukesh Kumar Tiwari and Ms. Reba Jena Mishra, Advocates for UoI

Case title: M/S Saha Traders Zonal Joint Director General Of Foreign Trade(Cla)

Citation: 2025 LiveLaw (Del) 338

Case no.: W.P.(C) 7295/2021

Click here to read order