Customs Authorities Barred from Applying BIS Certification Retroactively on Imports During BIS-Free Regime
In a landmark decision, the Gujarat High Court has ruled in favor of Hilotex International Pvt. Ltd., setting aside the customs authorities' insistence on retrospective Bureau of Indian Standards (BIS) certification for consignments whose Bills of Lading were issued during a BIS-Free regime. The court held that such retrospective application of the certification requirement was arbitrary and contrary to law.
The case arose from the rescission of the Polyester Continuous Filament Fully Drawn Yarn (Quality Control) Order, 2023, by a notification dated November 12, 2025, which created a BIS-Free regime. During this period, Hilotex International entered into contracts and placed purchase orders with overseas suppliers, resulting in the issuance of Bills of Lading for consignments prior to an interim order on May 4, 2026, which temporarily reinstated the requirement for BIS certification.
Despite the issuance of Bills of Lading before this interim order, customs authorities withheld clearance of the consignments, insisting on BIS certification. The court found this action to be without legal basis, noting that the transactions had been completed under a lawful BIS-Free regime. The judgment emphasized that applying the interim order retroactively was not justified and set aside similar orders in related cases.
The court also addressed a procedural aspect where an incorrect statement regarding the removal of office objections was made by an advocate. While stringent action was considered, it was ultimately not taken due to an apology tendered and the advocate's inadvertence.
This ruling reinforces the principle that changes in regulatory requirements cannot be applied retroactively, ensuring stability and predictability for businesses engaged in international trade. The decision is expected to have significant implications for similar cases across the country.
Bottom line:-
Customs authorities cannot insist upon BIS certification retrospectively for consignments where Bills of Lading were issued during the BIS-Free regime, as per the rescission notification dated 12.11.2025.
Statutory provision(s): Bureau of Indian Standards Act, 2016
Hilotex International Pvt. Ltd. v. Union of India, (Gujarat)(DB) : Law Finder Doc id # 2926595
