In Brief
Adani Power operated a coal-fired power plant in a Special Economic Zone (SEZ), supplying electricity to the domestic economy. The Government imposed customs duty on such power, treating it as an import under SEZ rules. Adani Power challenged this in court. A 2015 High Court judgment held the duty illegal—no lawful charging provision existed, and the government had misused exemption powers. The Supreme Court upheld this ruling, holding customs duty cannot be imposed on SEZ-generated electricity absent a clear statutory charge. It ordered refund of amounts collected between 2010–2016, rejecting arguments that later notifications with different rates cured the fundamental illegality.
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