Customs Rejects IOCL’s 104 Shipping Bill Conversion Relying on Circular Declared Ultra Vires by HC: Madras HC directs Reconsideration

The Madras High Court has directed the customs authorities to reconsider their rejection of 104 shipping bills filed by Indian Oil Corporation Ltd (IOCL). The department had rejected the company's request for the conversion of these bills from one export scheme to another, relying on a departmental circular. However, the High Court noted that the circular on which the department had based its decision had already been declared 'ultra vires' (beyond legal power) by another High Court. Since the very basis of the rejection was a legally invalid circular, the court quashed the customs order. It remanded the matter back to the department with a clear instruction to reconsider IOCL's application on its merits, without reference to the invalid circular. This ruling ensures that administrative decisions are based on valid legal provisions and not on outdated or legally unsound circulars.