ADANI POWER LTD. & ANRversusUNION OF INDIA & ORS

                     [2026] 2 S.C.R. 1 : 2026 INSC 1

                         Adani Power Ltd. & Anr
                                    v.
                          Union of India & Ors.
                         (Civil Appeal No. 22 of 2026)
                                05 January 2026
               [Aravind Kumar* and N.V. Anjaria, JJ.]


                            Issue for Consideration
       By the impugned judgment dated 28 June 2019, the High Court
       declined to grant the reliefs sought by the appellant, Adani
       Power Limited, which had inter alia prayed for a declaration that
       no customs duty was leviable on electrical energy generated in
       its power plant located in a Special Economic Zone (SEZ) and
       supplied to the Domestic Tariff Area (DTA), and for consequential
       refund of amounts deposited towards such duty. The High Court
       took the view that its earlier judgment delivered in 2015 in favour
       of the appellant was confined to a particular notification and period,
       and could not be extended to the later period or to subsequent
       notifications issued by the Union.

                                   Headnotes†
       Customs Act, 1962 – ss.12, 25 – Special Economic Zones Act,
       2005 – s.30 – SEZ Rules, 2006 – r.47(3) – Finance Act, 2010 –
       Firstly, what, in law, did the Gujarat High Court decide in its
       judgment dated 15 July 2015, and what is the true scope of
       that decision – Secondly, whether, in the period subsequent
       to 15 September 2010 and prior to 16 February 2016, there
       was any material changes in the statutory position or factual
       footing that would justify a different result from that arrived
       at in 2015 judgment – Thirdly, whether the High Court, in its
       impugned judgment of 28 June 2019, was justified in holding
       that no relief could be granted to the appellant in the absence
       of a specific and fresh challenge to Notification Nos. 91/2010-
       Cus. and 26/2012-Cus. – Fourthly, whether, in view of the 2015
       declaration of law and its affirmation, the High Court in 2019
       was at liberty, being a coordinate Bench, to deny relief by
       narrowing the effect of the earlier pronouncement:


* Author
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     Held: The Gujarat High Court’s judgment dated 15 July 2015, as
     a matter of law, declared that customs duty could not be levied on
     electrical energy cleared from the appellant’s SEZ unit to the DTA,
     having regard to the absence of a lawful charging event u/s.12 of
     the Customs Act, the limited scope of s.25 of that Act, the parity
     requirement of s.30 of the SEZ Act and the constitutional constraints
     of Arts.14 and 265 is squarely applicable to the judgment and order
     dated 28.06.2019 – That declaration was not confined in principle to
     Notification No.25/2010-Cus. or to the period ending 15 September
     2010 – It went to the authority to levy customs duty on SEZ-to-DTA
     electricity clearances in the statutory setting then obtaining – The
     subsequent notifications namely, Notification No.91/2010-Cus.
     prescribing ten paise per unit and Notification No.26/2012-Cus.
     prescribing three paise per unit, did not create a new levy on a new
     footing – They merely continued the same levy in altered form – The
     change in arithmetical rate by prospective character does not cure
     the lack of authority in principle – There was no material change
     in law or fact between 15 September 2010 and 15 February 2016
     that would justify a departure from the 2015 ruling – Section 30
     of the SEZ Act remained unaltered – Imported electrical energy
     bore no customs duty under the Customs Tariff Act, 1975 – The
     same parity logic applied to S.C.A. No.2233 of 2016 disposed of
     on 28.06.2019 – The Division Bench of the High Court in 2019,
     being a co-ordinate Bench, was bound either to follow the 2015
     decision or, if it doubted its correctness or applicability, ought to
     have referred the question to a larger Bench – It could not have
     circumvented that discipline by artificially narrowing down the earlier
     ruling – Its refusal to extend the 2015 declaration to the later period
     was therefore contrary to law – Once it is held that the levy itself
     was without authority of law, the State cannot retain the amount
     collected under such levy – Restitution is a necessary incident of
     the finding of illegality – Accordingly, the impugned judgment of
     the High Court dated 28 June 2019 cannot be sustained. [Para 86]

     Customs Act, 1962 – ss.12, 25 – Special Economic Zones
     Act, 2005 – s.30 – SEZ Rules, 2006 – r.47(3) – Finance Act,
     2010 – Whether the levy of customs duty on electrical
     energy cleared by the appellant from its SEZ unit to the DTA
     during the relevant period, as sought to be enforced through
     Notification No. 25/2010-Cus., Notification No. 91/2010-Cus.,
     Notification No. 26/2012-Cus., and similar instruments, was
     without authority of law:
[2026] 2 S.C.R.                                                              3

             Adani Power Ltd. & Anr v. Union of India & Ors.


     Held: The levy of customs duty on electrical energy cleared by the
     appellant from its SEZ unit to the DTA during the relevant period,
     as sought to be enforced through Notification No.25/2010-Cus.,
     Notification No.91/2010-Cus., Notification No.26/2012-Cus., and
     similar instruments, was without authority of law. [Para 87]

     Judicial Discipline – Decision by Co-ordinate Bench of the
     High Court:
     Held: When a coordinate Bench of a High Court has already
     determined a question of law, a subsequent Bench of equal strength
     is bound to follow that view; if it doubts its correctness, the only
     permissible course is to refer the matter to a larger Bench. [Para 80]

     Administrative Law – Where a court of competent jurisdiction
     has struck down the foundation of a levy as ultra vires:
     Held: In administrative law, where a court of competent jurisdiction
     has struck down the foundation of a levy as ultra vires, that
     declaration renders all successive and derivative attempts to
     enforce the same levy equally unenforceable, unless the statutory
     or factual basis has materially changed – The State cannot defend
     the continuation of the same vice by saying, this is a different
     notification number – The Court is bound to look past the label
     and examine the substance. [Para 69]

     Customs Act, 1962 – ss.12, 25 – Special Economic Zones Act,
     2005 – s.30 – SEZ Rules, 2006 – r.47(3) – Finance Act, 2010 –
     Where a levy has been declared to be without authority of law:
     Held: Where a levy has been declared to be without authority of law,
     a subsequent petition seeking enforcement of that declaration and
     consequential relief cannot be treated as a fresh challenge merely
     because the levy is sought to be continued under later or similar
     notifications – In the absence of any new statutory basis, such
     notifications do not create a new cause of action – A constitutional
     court is entitled to grant effective relief without insisting upon
     separate challenges to each such notification. [Para 74]

                              Case Law Cited
     State of Uttar Pradesh v. Ajay Kumar Sharma [2015] 12 SCR 627 :
     (2016) 15 SCC 289 – referred to.
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                                  List of Acts
     Constitution of India; Special Economic Zones Act, 2005; Special
     Economic Zones Rules, 2006; Customs Act, 1962; Finance Act, 2010.

                               List of Keywords
     Special Economic Zone (SEZ); Customs duty; Electrical energy;
     Absence of charging event; Section 25 of Customs Act, 1962;
     Delegated legislation; Exemption notification; Retrospective levy;
     Judicial discipline; Binding precedent; Domestic tariff area (DTA);
     Judicial precedent; Colourable exercise of delegated authority;
     Restitution; Discipline of precedent; Institutional necessity; Stability;
     Predictability; Doctrine of judicial discipline; Sequel proceeding;
     Fiscal jurisprudence; Subordinate legislation; Public interest; Stare
     decisis et non quieta movere; Interest reipublicae ut sit finis litium.

                              Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 22 of 2026
     From the Judgment and Order dated 28.06.2019 of the High Court
     of Gujarat at Ahmedabad in SCA No. 2233 of 2016

                          Appearances for Parties
     Advs. for the Appellant(s):
     P. Chidambaram, Sr. Adv., Mahesh Agarwal, Anshuman Srivastava,
     Rohan Talwar, Naman Agarwal, E. C. Agrawala.
     Advs. for the Respondent(s):
     Raghvendra P. Shankar, A.S.G., Gurmeet Singh Makker, Sharath
     Nambaiar, Diwakar Sharma, Ms. Satvika Thakur, Ms. B.sunita
     Rao, Ishaan Sharma.

                 Judgment / Order of the Supreme Court

                                   Judgment

     Aravind Kumar, J.

1.   Leave granted.
2.   This appeal is directed against the judgment and order dated 28
     June 2019 passed by the High Court of Gujarat in Special Civil
[2026] 2 S.C.R.                                                            5

             Adani Power Ltd. & Anr v. Union of India & Ors.


     Application No. 2233 of 2016. By the impugned judgment, the High
     Court declined to grant the reliefs sought by the appellant, Adani
     Power Limited, which had inter alia prayed for a declaration that
     no customs duty was leviable on electrical energy generated in its
     power plant located in a Special Economic Zone (SEZ) and supplied
     to the Domestic Tariff Area (DTA), and for consequential refund of
     amounts deposited towards such duty. The High Court took the view
     that its earlier judgment delivered in 2015 in favour of the appellant
     was confined to a particular notification and period, and could not
     be extended to the later period or to subsequent notifications issued
     by the Union. Aggrieved, the appellant has approached this Court.
3.   The controversy is not merely fiscal. It raises, in our view, questions
     that bear upon three foundational aspects of our legal order: first,
     the limits of delegated legislation in matters of taxation; secondly,
     the discipline of judicial precedent and the obligation of co-ordinate
     Benches to adhere to settled law; and thirdly, the obligation of the
     State to give effect to judicial declarations instead of reasserting, in
     altered form, a levy already declared to be without authority of law.
4.   We have heard Mr. Chidambaram, learned senior counsel appearing
     on behalf of the appellant and the learned Raghav Shankar Additional
     Solicitor General appearing on behalf of the Respondents and before
     proceeding to consider their arguments it would be of relevance to
     note the factual background and it reads:

     I.    FACTUAL BACKGROUND
5.   The appellant operates a coal-based thermal power plant of about
     5,200 MW capacity within the Mundra Special Economic Zone (SEZ)
     in the State of Gujarat. The appellant is a co-developer in that notified
     SEZ. The electricity generated at this plant is partly consumed within
     the SEZ and substantially supplied to buyers in the DTA, including
     State utilities.
6.   Under the architecture of the Special Economic Zones Act, 2005
     (“the SEZ Act”), an SEZ is afforded a special fiscal treatment to
     encourage manufacturing and infrastructure creation. Section 30 of
     the SEZ Act provides that any goods removed from an SEZ into the
     DTA shall be chargeable to duties of customs “as if such goods had
     been imported into India”. The intent is to maintain parity between
     goods physically imported into India from abroad and goods cleared
     from an SEZ into the domestic economy.
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7.   Prior to 2009, electrical energy per se did not attract customs duty
     on import. The relevant tariff entry treated imported electricity at a
     nil rate. In consequence, though Section 30 of the SEZ Act deems
     removals from the SEZ into the DTA to be subject to customs duty
     “as if imported”, electrical energy moving from an SEZ to the DTA
     bore, in practical terms, no customs duty. The fiscal neutrality in
     relation to electricity was maintained in a different way.
8.   Rule 47(3) of the SEZ Rules, 2006 recognises that power generated
     in an SEZ may also be supplied to the DTA. To prevent misuse of
     duty-free inputs, Rule 47(3) provides that where electricity produced
     using duty-free inputs in the SEZ is cleared to the DTA, the SEZ unit
     would have to make good the customs duty benefit on that proportion
     of inputs relatable to the electricity so supplied out of the zone. In
     effect, the law captured the customs component in the inputs (for
     example, imported coal) to the extent the resulting electricity left the
     SEZ. The law did not, however, impose an independent customs
     duty on the electricity itself.
9.   Matters changed in 2010. In the Union Budget of that year, the
     Central Government introduced a fiscal measure designed to impose
     customs duty on electrical energy cleared from an SEZ to the DTA.
     Clause 60 of the Finance Bill, 2010 (later enacted in the Finance
     Act, 2010) introduced changes to the general customs exemption
     notification regime such that electrical energy removed from an SEZ
     to the DTA would become liable to duty. What is of significance is
     that this was stated to operate retrospectively from 26 June 2009.
10. In anticipation of this change, on 27 February 2010, the Central
    Government issued Notification No. 25/2010-Cus. What this
    notification purported to do was, in form, to “grant an exemption”; in
    substance, it introduced a liability. It stipulated that electrical energy
    cleared from an SEZ to the DTA would suffer customs duty at 16%
    ad valorem, with retrospective effect from 26 June 2009. On the very
    footing of this notification, the authorities raised demands upon the
    appellant for payment of duty at 16%, not merely prospectively but
    going back to June 2009.
11. The appellant challenged this levy by filing a writ petition before the
    High Court of Gujarat in 2010. The challenge was to the legality and
    constitutional validity of the impost on electrical energy so cleared.
    During the pendency of the writ petition, the High Court granted
[2026] 2 S.C.R.                                                         7

             Adani Power Ltd. & Anr v. Union of India & Ors.


     interim relief on 6 May 2010. The appellant was permitted to continue
     to clear electricity from the SEZ into the DTA without payment of
     the disputed duty, subject to furnishing a bank guarantee to secure
     the amount in dispute. The appellant furnished the bank guarantee
     accordingly. Thus, though immediate cash outflow was avoided, the
     alleged liability stood secured.
12. While the writ petition remained pending, the Union altered the duty
    structure. With effect from 16 September 2010, by Notification No.
    91/2010-Cus., the earlier 16% ad valorem duty was replaced by a
    specific-rate duty of ₹0.10 (ten paise) per unit of electrical energy
    cleared from the SEZ to the DTA. Later, with effect from 18 April
    2012, by Notification No. 26/2012-Cus., this was further reduced to
    ₹0.03 (three paise) per unit. These subsequent notifications functioned
    prospectively. They did not, however, undo the retrospective
    component of Notification No. 25/2010-Cus. for the period 26 June
    2009 to 15 September 2010.
13. The effect of this shift was twofold. First, for the period 26 June
    2009 to 15 September 2010, the authorities asserted a retrospective
    customs duty at 16% ad valorem under Notification No. 25/2010-
    Cus. Secondly, for the period thereafter, the appellant was required
    to pay, and did pay, a per-unit customs duty on electrical energy
    cleared from the SEZ to the DTA, initially at ten paise per unit and
    later at three paise per unit, pursuant to Notification Nos. 91/2010-
    Cus. and 26/2012-Cus.
14. The appellant persisted with its challenge, maintaining that no customs
    duty at all could be lawfully imposed on the clearance of electrical
    energy from an SEZ into the DTA, having regard to the statutory
    scheme and constitutional limitations. The writ petition came to be
    finally heard by a Division Bench of the Gujarat High Court, which,
    by a judgment dated 15 July 2015, allowed the Writ petition.
15. The High Court’s 2015 judgment is central or pivotal to the case on
    hand. The High Court held, first, that the statutory charge for customs
    duty lies in Section 12 of the Customs Act, 1962, read with Entry 83
    of List I of the Seventh Schedule. Section 12 contemplates a levy
    on goods “imported into India”. The High Court found that electrical
    energy generated within India in an SEZ and wheeled to buyers in
    the DTA is not, in substance, a case of “import into India”. An SEZ,
    while fiscally distinct in treatment, is not a foreign territory. The
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     legal fiction in Section 30 of the SEZ Act (“as if imported”) allows
     ascertainment of the rate of duty applicable to comparable imports;
     it does not convert intra-national supply of electricity into an act of
     import. There was, therefore, no identifiable charging event to attract
     customs duty under Section 12 in respect of such electricity.
16. The High Court held, secondly, that Notification No. 25/2010-Cus.,
    though couched as an “exemption” notification, in truth operated as an
    instrument to impose duty. Section 25 of the Customs Act empowers
    the Central Government to exempt, in whole or in part, goods from
    duty that is otherwise leviable. That provision is beneficent in nature. It
    is a power to relax, not a power to create or levy tax. The High Court
    concluded that the Union could not, under the colour of exercising
    an exemption power, introduce a new levy at 16% ad valorem and
    then apply it retrospectively. The notification was, therefore, beyond
    the source of power: a colourable exercise of delegated authority.
17. The High Court held, thirdly, that the retrospective fastening of a 16%
    levy from 26 June 2009 violated the discipline of Article 265 of the
    Constitution which declares that no tax shall be levied or collected
    except by authority of law. The Court found that the executive could
    not, by subordinate legislation, retrospectively cast a tax liability for
    a past period absent of a clear charging sanction from Parliament.
    Once the basic levy was itself ultra vires, its retrospective application
    necessarily fails.
18. The High Court held, fourthly, that the structure of the levy created an
    arbitrary and unfair double burden. The SEZ Rules already ensured
    that, to the extent electricity left the zone for the DTA, the benefit of
    duty-free inputs was clawed back. If, in addition, customs duty were
    again recovered on the electricity so supplied, the same economic
    stream i.e., generation and sale of power would be subjected twice to
    customs incidence: once through neutralisation of duty on inputs, and
    again on clearance of the output. That, the Court held, was arbitrary.
19. For these reasons, the High Court in 2015 struck down the levy of
    customs duty on electrical energy cleared by the appellant from its
    SEZ unit into the DTA for the period 26 June 2009 to 15 September
    2010. The offending notification and the enabling clause in the
    Finance Act were quashed to that extent as being ultra vires both the
    Customs Act and the Constitution. The appellant’s bank guarantee
    was directed to be released. The High Court thus, in substance,
[2026] 2 S.C.R.                                                            9

             Adani Power Ltd. & Anr v. Union of India & Ors.


     declared that, on the statutory scheme as it then stood, customs
     duty could not be demanded on the appellant’s SEZ-to-DTA power
     clearances.
20. The Union of India carried the matter to this Court. On 20 November
    2015, this Court declined to interfere with the judgment of the High
    Court. A subsequent review petition filed by the Union of India was
    dismissed in April 2016. The declaration of law made by the High
    Court, therefore, attained finality at least as between the parties, and
    in practical terms within the territorial jurisdiction of that High Court.
21. Thereafter, with effect from 16 February 2016, the Union issued
    Notification No. 9/2016-Cus. Under this measure, clearances of
    electrical energy from certain large SEZ-based generating stations
    (including the appellant’s, which has capacity in excess of 1000 MW
    and was approved prior to 27 February 2009) into the DTA were
    placed at a nil rate of customs duty. Thus, prospectively from 16
    February 2016, the levy itself was withdrawn insofar as the appellant
    was concerned.
22. What remained live, however, was the period between 16 September
    2010 and 15 February 2016. For that period, the appellant had
    paid per-unit customs duty at ten paise and three paise pursuant to
    Notification Nos. 91/2010-Cus. and 26/2012-Cus. respectively. After
    the 2015 judgment, the appellant sought refund of those amounts,
    contending that once the High Court had declared that no customs
    duty could be imposed on SEZ–to–DTA electricity clearances, any
    amount collected under the same head, though at a different rate
    and prospectively, were liable to be refunded.
23. The appellant thereafter instituted Special Civil Application No. 2233
    of 2016 before the High Court of Gujarat. In the said writ petition,
    the appellant prayed for (i) a declaration that no customs duty was
    leviable on clearances of electricity from its SEZ unit to the DTA for
    the subsequent period as well; (ii) directions restraining the authorities
    from seeking to recover such duty; and (iii) consequential refund of
    the amounts already deposited under protest towards such levy for
    the period after 15 September 2010 and prior to 16 February 2016.
24. The writ petition of 2016 came to be adjudicated by a Division Bench
    of the High Court and by judgment dated 28 June 2019, which is
    the subject of this appeal, the High Court dismissed the writ petition.
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25. The reasoning of the High Court in 2019 was as follows:
      The Court held that the 2015 judgment dealt with Notification No.
      25/2010-Cus., which had imposed the 16% retrospective levy up
      to 15 September 2010, and that the relief granted was explicitly
      limited to said period only. The High Court observed that subsequent
      notifications, namely, Notification No. 91/2010-Cus. prescribing ten
      paise per unit, and Notification No. 26/2012-Cus. prescribing three
      paise per unit were not expressly struck down in the 2015 proceedings.
      The Court stated that unless the validity of those later notifications
      was specifically challenged, no refund could be ordered in respect
      of amounts paid thereunder. On that basis, the High Court refused
      to direct refund, and it declined to extend the protective declaration
      of 2015 into the later period.
26. It is this approach which is under challenge before us.

      II.   SUBMISSIONS OF THE PARTIES
27. Shri. Chidambaram, Learned senior counsel appearing for the
    appellant submitted that the High Court, under the impugned
    judgment, failed to give effect to its own prior declaration of law. It
    was urged that the judgment of 15 July 2015 did not merely grant
    a one-time relief confined to a single notification; rather, it declared,
    as a matter of principle, that on the statutory framework as it then
    existed, customs duty could not be levied on the clearance of
    electrical energy from an SEZ to the DTA. That declaration, affirmed
    by this Court, was binding on the subsequent co-ordinate Bench of
    the High Court. It was submitted that there was no change in the
    law or in the underlying facts between 15 September 2010 and 15
    February 2016. Consequently, the same legal consequence ought
    to have followed for that entire period.
28. Learned senior counsel further submitted that Section 30 of the
    SEZ Act requires parity of treatment. Goods removed from an SEZ
    into the DTA are to bear the same customs duty “as if imported into
    India”. Imported electrical energy has consistently stood at a nil rate
    of customs duty. Therefore, electrical energy cleared from an SEZ
    to the DTA must equally attract nil customs duty. Imposing duty on
    SEZ-generated electricity while imported electricity carries no duty
    produces an artificial and constitutionally suspect classification. It was
    urged that such a differential treatment directly defeats the object of
    the SEZ Act and violates Article 14 of the Constitution.
[2026] 2 S.C.R.                                                         11

             Adani Power Ltd. & Anr v. Union of India & Ors.


29. It was next contended for the appellant that the Union could not, by
    issuing successive notifications at progressively lower rates (16%
    ad valorem; thereafter ten paise per unit; thereafter three paise
    per unit), achieve indirectly that which the High Court had already
    pronounced to be ultra vires. The appellant referred to the doctrine
    that a levy which is fundamentally unauthorised does not become
    lawful merely because the rate is altered, or because it is framed
    as prospective rather than retrospective. If the source is bad, every
    derivative iteration is equally bad.
30. Learned senior counsel also drew attention to the manner in which
    the levy was originally structured. Notification No. 25/2010-Cus.
    purported, on its face, to be an “exemption” notification. In reality,
    it operated as a charging instrument, introducing for the first time a
    16% duty on electricity routed from the SEZ to the DTA, and doing
    so with retrospective effect. It was submitted that the power conferred
    by Section 25 of the Customs Act is a power to exempt goods from
    duty otherwise leviable; it is not a power to create a fresh levy in
    the first place. The use of an exemption notification to impose duty
    was, therefore, a colourable exercise of delegated legislation and
    fell foul of administrative law principles. According to the appellant,
    the High Court in 2015 correctly interdicted that exercise, and the
    same vice afflicts the subsequent notifications.
31. Learned senior counsel for the appellant submitted that the High
    Court in 2019 erred in accepting the plea of the respondents that
    no relief could be granted unless the subsequent notifications (Nos.
    91/2010-Cus. and 26/2012-Cus.) were specifically impugned. It
    was urged that the appellant’s 2016 writ petition was not a fresh
    challenge launched in isolation; it was a sequel proceeding seeking
    enforcement of the 2015 declaration of law and refund of amounts
    deposited under protest pursuant to a levy that had already been
    held to be without authority of law. Once the foundational illegality
    of the levy was judicially determined, the State could not insist that
    each successive notification, though resting on the same ultra vires
    premise, must be struck down afresh before relief could follow.
    Such a view, it was submitted, would elevate procedural form over
    substantive illegality and would compel endless cycles of litigation
    on the same point.
32. It was lastly urged on behalf of the appellant that the doctrine of
    finality in adjudication, and the principle that litigation must at some
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      stage come to an end, require that constitutional courts give effect
      to their own pronouncements in substance and not permit executive
      re-litigation of what has already been decided. The appellant, having
      succeeded in 2015 and having seen that decision withstand challenge
      before this Court, ought not to have been denied consequential relief
      merely because the levy later reappeared at a different numerical rate.
33. Per contra, Shri. Raghav Shankar , the learned Additional Solicitor
    General, appearing for the Union of India and the customs authorities,
    supported the impugned judgment. The thrust of the Union’s
    submission was that the 2015 judgment of the High Court was
    concerned with Notification No. 25/2010-Cus., which imposed a levy
    of 16% ad valorem duty with retrospective effect up to 15 September
    2010. It is further submitted that the relief granted in that case was
    expressly circumscribed to that period.
34. The learned Additional Solicitor General contended that the
    subsequent notifications, namely Notification No. 91/2010-Cus. (ten
    paise per unit) and Notification No. 26/2012-Cus. (three paise per
    unit), operated prospectively for later periods and at nominal specific
    rates. According to the Union, those notifications represented a
    different fiscal measure with a distinct objective: namely, to recoup,
    in part, the customs duty benefit on duty-free inputs where power
    so generated was supplied into the DTA. It was urged that these
    later notifications were not placed under specific challenge in the
    first writ petition decided in 2015.
35. The Union further submitted that even in the appellant’s 2016 writ
    petition, the later notifications were not, in form, separately impugned.
    On that basis, it was contended that the High Court in 2019 was
    correct in refusing to quash those notifications or to direct refund
    of the amounts paid pursuant thereto, as no court can strike down
    a statutory instrument or direct restitution on its basis unless that
    instrument is first subjected to judicial review.
36. It was also submitted on behalf of Union of India that the appellant had,
    for years, paid the reduced per-unit duty without protest in respect of
    the post-September 2010 period, and that a belated attempt to seek
    refund, after success in respect of an earlier, different notification,
    ought to be viewed with circumspection.
37. It was lastly submitted that, with effect from 16 February 2016, the
    policy had already been calibrated by Notification No. 9/2016-Cus.,
[2026] 2 S.C.R.                                                          13

             Adani Power Ltd. & Anr v. Union of India & Ors.


     which exempted power from large SEZ units such as the appellant’s.
     Thus, according to the Union, the grievance substantially stood
     redressed prospectively. What remained, in its submission, was
     a monetary claim for an intervening period, which the High Court
     correctly declined to entertain in the absence of a specific and direct
     challenge to the notifications governing that period on these grounds
     he sought for rejection of the appeal.

     III.   ISSUES FOR DETERMINATION
38. From the rival submissions and the record before us, the following
    questions arise for consideration:
     I.     Firstly, what, in law, did the Gujarat High Court decide in its
            judgment dated 15 July 2015, and what is the true scope of
            that decision?
     II.    Secondly, whether, in the period subsequent to 15 September
            2010 and prior to 16 February 2016, there was any material
            changes in the statutory position or factual footing that would
            justify a different result from that arrived at in 2015 judgment?
     III.   Thirdly, whether the High Court, in its impugned judgment of
            28 June 2019, was justified in holding that no relief could be
            granted to the appellant in the absence of a specific and fresh
            challenge to Notification Nos. 91/2010-Cus. and 26/2012-Cus?
     IV.    Fourthly, whether, in view of the 2015 declaration of law and
            its affirmation, the High Court in 2019 was at liberty, being a
            co-ordinate Bench, to deny relief by narrowing the effect of the
            earlier pronouncement?
     V.     Fifthly, what order/direction?

     IV.    ANALYSIS
39. Before proceeding with the analysis of the issues framed above, it
    would be necessary to reproduce certain relevant statutory provisions
    which would be necessary for the adjudication of these issues.
    Accordingly we have reproduced all the relevant statutory provisions.
40. Section 12 of the Customs Act, 1962 for reference:
            12. Dutiable goods.—(1) Except as otherwise provided
            in this Act, or any other law for the time being in force,
14                                                         [2026] 2 S.C.R.

                       Supreme Court Reports


         duties of customs shall be levied at such rates as may
         be specified under the Customs Tariff Act, 1975 (51 of
         1975), or any other law for the time being in force, on
         goods imported into, or exported from, India. (2) The
         provisions of sub-section (1) shall apply in respect of all
         goods belonging to Government as they apply in respect
         of goods not belonging to Government.
41. Section 30 of The Special Economic Zones Act, 2005 for reference:
         30. Domestic clearance by Units.—Subject to the conditions
         specified in the rules made by the Central Government
         in this behalf,— (a) any goods removed from a Special
         Economic Zone to the Domestic Tariff Area shall be
         chargeable to duties of customs including anti-dumping,
         countervailing and safeguard duties under the Customs
         Tariff Act, 1975 (51 of 1975), where applicable, as leviable
         on such goods when imported; and (b) the rate of duty
         and tariff valuation, if any, applicable to goods removed
         from a Special Economic Zone shall be at the rate and
         tariff valuation in force as on the date of such removal,
         and where such date is not ascertainable, on the date of
         payment of duty.
42. Rule 47 of The Special Economic Zones Rules, 2006 for reference:
         47. Sales in Domestic Tariff Area—
         (1) A Unit may sell goods and services including rejects
         or wastes or scraps or remnants or broken diamonds or
         by products arising during the manufacturing process or
         in connection therewith, in the Domestic Tariff Area on
         payment of Customs duties under section 30, subject to
         the following conditions, namely-
              (a) Domestic Tariff Area sale under sub-rule (1), of
              goods manufactured by a Unit shall be on submission
              of import licence, as applicable to the import of similar
              goods into India, under the provisions of the Foreign
              Trade Policy:
              Provided that goods imported or procured from the
              Domestic Tariff Area and sold as such without being
[2026] 2 S.C.R.                                                            15

             Adani Power Ltd. & Anr v. Union of India & Ors.


                subjected to any manufacturing process shall be
                subject to the provisions of the Foreign Trade Policy
                as applicable to import of similar goods into India.
                (b) Domestic Tariff Area sale under sub-rule (1) of
                rejects or scrap or waste or remnants arising during
                the manufacturing process or in connection there-with
                by the Unit shall not be subject to the provisions of
                the Import Trade Control (Harmonized System) of
                Classification of Export and Import Items:
                Provided that the Central Government may notify
                restrictions, as it deems fit on all or any class of such
                goods mentioned under this clause.
           (2) Scrap or dust or sweeping of gold or silver or platinum
           may be sent to Government of India Mint or Private Mint
           from a Unit and returned in standard bars in accordance
           with the procedure specified by Customs authorities or may
           be sold in the Domestic Tariff Area on payment of duty on
           the gold or silver or platinum content in the said scrap:
                Provided that the value of samples of gold or silver
                or platinum sweepings or scrap or dust taken at the
                time of clearance and sent to the Government Mint
                or Private Mint for assaying and assessment shall
                be finalized on the basis of reports received from the
                Government Mint or Private Mint, as the case may be.
           (3) Surplus power generated in a Special Economic Zone’s
           Developer’s Power Plant in the SEZ or Unit’s captive
           power plant or diesel generating set may be transferred to
           Domestic Tariff Area on payment of duty on consumables
           and raw materials used for generation of power subject
           to the following conditions, namely:
                (a) proposal for sale of surplus power received by
                the Development Commissioner shall be examined in
                consultation with the State Electricity Board, wherever
                considered necessary: Provided that consultation with
                State Electricity Board shall not be required for sale
                of power within the same Special Economic Zone;
16                                                         [2026] 2 S.C.R.

                        Supreme Court Reports


              (b) norms for production of a unit of power shall be
              approved by the Approval Committee;
              (c) sale of surplus power to other Unit or Developer
              in the same or other Special Economic Zone or
              to Export Oriented Unit or to Electronic Hardware
              Technology Park Unit or to Software Technology Park
              Unit or Bio-technology Park Unit, shall be without
              payment of duty;
              (d) for sale of surplus power in Domestic Tariff
              Area, the Unit shall obtain permission from the
              Specified Officer and the State Government authority
              concerned;
              (e) duty on sale of surplus power to the Domestic
              Tariff Area shall be as provided for in this rule.
         (4) Valuation and assessment of the goods cleared into
         Domestic Tariff Area shall be made in accordance with
         Customs Act and rules made there under. 160
         (5) Refund, Demand, Adjudication, Review and Appeal
         with regard to matters relating to authorised operations
         under Special Economic Zones Act, 2005, transactions,
         and goods and services related thereto shall be made by
         the Jurisdictional Customs and Central Excise Authorities
         in accordance with the relevant provisions contained in
         the Customs Act, 1962, the Central Excise Act, 1944, and
         the Finance Act, 1994 and the rules made there under or
         the notifications issued there under.
43. Section 25 of The Customs Act, 1962 for reference:
         25. Power to grant exemption from duty.—(1) If the Central
         Government is satisfied that it is necessary in the public
         interest so to do, it may, by notification in the Official
         Gazette, exempt generally either absolutely or subject to
         such conditions (to be fulfilled before or after clearance) as
         may be specified in the notification goods of any specified
         description from the whole or any part of duty of customs
         leviable thereon.
[2026] 2 S.C.R.                                                              17

             Adani Power Ltd. & Anr v. Union of India & Ors.


           (2) If the Central Government is satisfied that it is necessary
           in the public interest so to do, it may, may, by special order
           in each case, exempt from the payment of duty, under
           circumstances of an exceptional nature to be stated in
           such order, any goods on which duty is leviable.
           (2A) The Central Government may, if it considers it
           necessary or expedient so to do for the purpose purpose of
           clarifying the scope or applicability of any notification issued
           under sub-section (1) or order issued under sub-section
           (2), insert an explanation in such notification or order, as
           the case may be, by notification in the Official Gazette, at
           any time within one year of issue of the notification under
           sub-section (1) or order under sub-section (2), and every
           such explanation shall have effect as if it had always
           been the part of the first such notification or order, as the
           case may be.
           (3) An exemption under sub-section (1) or sub-section
           (2) in respect of any goods from any part of the duty of
           customs leviable thereon (the duty of customs leviable
           thereon being hereinafter referred to as the statutory
           duty) may be granted by providing for the levy of a duty
           on such goods at a rate expressed in a form or method
           different from the form or method in which the statutory
           duty is leviable and any exemption granted in relation
           to any goods in the manner provided in this sub-section
           shall have effect subject to the condition that the duty
           of customs chargeable on such goods shall in no case
           exceed the statutory duty.
           Explanation.—”Form or method‖, in relation to a rate of
           duty of customs, means the basis, namely, valuation,
           weight, number, length, area, volume or other measure
           with reference to which the duty is leviable.
           (4) Every notification issued under sub-section (1) or sub-
           section (2A) shall, unless otherwise provided, come into
           force on the date of its issue by the Central Government
           for publication in the Official Gazette.
           *****
18                                                            [2026] 2 S.C.R.

                          Supreme Court Reports


           (6) Notwithstanding anything contained in this Act, no duty
           shall be collected if the amount of duty leviable is equal
           to, or less than, one hundred rupees.
           (7) The mineral oils (including petroleum and natural gas)
           extracted or produced in the continental continental shelf
           of India or exclusive economic zone of India as referred
           to in section 6 and section 7, respectively, of the Territorial
           Waters, Continental Shelf, Exclusive Economic Zone and
           Other Maritime Zones Act, 1976 (80 of 1976), and imported
           prior to the 7th day of February, 2002 shall be deemed to
           be and shall always be deemed to have been exempted
           from the whole of the duties of customs leviable on such
           mineral oils and accordingly, notwithstanding anything
           contained in any judgment, decree or order of any court,
           tribunal or other authority, no suit or other proceedings
           in respect of such mineral oils shall be maintained or
           continued in any court, tribunal or other authority.
           (8) Notwithstanding the exemption provided under sub-
           section (7), no refund of duties of customs paid in respect
           of the mineral oils specified therein shall be made.

      RE: QUESTION I – SCOPE AND EFFECT OF THE 2015 JUDGMENT
44. We turn first to the 2015 judgment. The High Court there did four things
    of significance. It examined (i) the constitutional and statutory basis
    of the levy; (ii) the character of the notification said to impose it; (iii)
    the retrospective enforcement of that levy; and (iv) the arbitrariness
    inherent in the structure of the levy.
45. On the constitutional and statutory basis, the High Court held that
    the levy was ultra vires because there was, in substance, no “import
    into India” that could trigger the charge under Section 12 of the
    Customs Act. This went to the very root of the matter. The Court
    was not deciding a mere technical irregularity. It held that the alleged
    taxable event did not exist in law. The absence of a taxable event
    is a jurisdictional defect.
46. On the character of the notification, the High Court found that the
    Union had attempted, by Notification No. 25/2010-Cus., to employ
    the language of an “exemption” notification to in fact impose and
[2026] 2 S.C.R.                                                         19

             Adani Power Ltd. & Anr v. Union of India & Ors.


     quantify a new levy of 16% on SEZ–to–DTA power clearances. The
     High Court held that Section 25 of the Customs Act is a power to
     relax duty, not a power to invent it. This was a finding on the limits
     of delegated legislation.
47. On retrospectivity, the High Court found that fastening a 16% ad
    valorem duty with effect from 26 June 2009 through delegated action
    offended Article 265 of the Constitution, which requires authority of
    law for every tax levy and collection.
48. On arbitrariness, the High Court found that the structure of the levy
    burdened the appellant twice over i.e., once by drawback of duty
    on inputs under Rule 47(3) of the SEZ Rules, and then again by
    demanding customs duty on the final electricity output itself.
49. These findings were not casual or incidental. They were the foundation
    upon which the High Court granted relief. The Court did not say
    merely that Notification No. 25/2010-Cus. Suffered from a drafting
    defect. It said, in substance: (i) there is no lawful charging event in
    respect of this commodity when cleared from an SEZ to the DTA;
    (ii) the Union cannot use an exemption notification to create a duty
    that Parliament has not imposed; (iii) retrospective demand without
    statutory sanction violates Article 265; and (iv) the structure produces
    arbitrary double burden.
50. We are of the clear view that these four propositions together
    constitute the ratio decidendi of the 2015 judgment. It follows that the
    2015 judgment was not confined, in principle, to a single notification
    or to a particular cut-off date. The declaration of law extended to the
    very authority to levy customs duty on electrical energy cleared from
    an SEZ to the DTA in the statutory setting then prevailing. Absence a
    change in that setting, that declaration governed all periods standing
    on the same footing.
51. Accordingly we hold that the judgment of the Gujarat High Court dated
    15 July 2015 was not a limited adjudication confined to the validity of
    one notification or to a closed span of time. It was a declaration of
    law founded on constitutional and statutory interpretation, determining
    that on the then-existing legal framework no customs duty could be
    levied on electrical energy transmitted from an SEZ to the DTA. The
    reasoning of said decision went to the very root of the taxing power
    i.e., it identified the absence of a charging event, the misuse of the
20                                                           [2026] 2 S.C.R.

                          Supreme Court Reports


      exemption power, and the inherent arbitrariness of the scheme. Once
      such a declaration of law was rendered and affirmed by this Court,
      it acquired binding normative force and governed all transactions
      resting on the same legal footing. The essence of that pronouncement
      was not temporal but structural; it struck at the authority to levy,
      not merely at the rate or the period. The 2015 judgment therefore
      stands as a general exposition of law, and its ratio decidendi covers
      the subsequent period unless a demonstrable change in the legal
      foundation is shown.

      RE: QUESTION 2 – WHETHER ANY CHANGE IN STATUTORY OR
      FACTUAL FOOTING JUSTIFIED A DIFFERENT RESULT
52. We next turn to an aspect which, in our view, requires emphasis: the
    use of an “exemption” notification to impose, in substance, a levy.
53. Section 25 of the Customs Act authorises the Central Government,
    if it is satisfied that it is necessary in the public interest so to do, to
    exempt generally either absolutely or subject to conditions goods of
    any specified description from the whole or any part of customs duty
    leviable thereon. The premise of Section 25 is that there is a duty
    “leviable thereon” in the first place. The function of an exemption
    notification is, therefore, to relax or remit a duty already otherwise
    attracted by law.
54. What Notification No. 25/2010-Cus. did, however, was precisely
    the reverse. It purported to declare, for the first time, that electrical
    energy cleared from an SEZ to the DTA would be subjected to
    customs duty at the rate of 16% ad valorem. The instrument was
    dressed in the garb of an exemption, but its true operation was to
    create a duty where none existed, and to quantify that duty, and to
    apply it retrospectively.
55. In administrative law terms, this is a classic instance of a colourable
    exercise of delegated power. A delegate cannot do indirectly what it
    has no authority to do directly. The power to exempt is not a power
    to tax. The two stand on opposite constitutional planes. The essential
    legislative function of imposing a tax or duty rests with Parliament
    and must be located in a charging provision. The executive cannot,
    by subordinate instrument, enlarge the field of taxation under the
    pretext of tailoring an exemption.
[2026] 2 S.C.R.                                                              21

             Adani Power Ltd. & Anr v. Union of India & Ors.


56. We consider it necessary to state this principle clearly. Delegated
    legislation is subject to judicial review not only for substantive
    unreasonableness, but also for purpose. Where the dominant purpose
    for which a delegated power is conferred is departed from, and the
    power is pressed into service to achieve an end for which it was
    never granted, the exercise is ultra vires. The immunity of a fiscal
    notification from scrutiny is no greater than that of any other form
    of subordinate legislation.
57. The High Court in 2015 correctly detected that inversion: a provision
    designed to grant relief (exemption) had been inverted to impose a
    burden (levy). Such inversion is not a mere irregularity; it is an illegality
    at source. The said finding of the High Court is in consonance with
    settled principles of law declared by this Court. Hence, we affirm
    said finding.
58. That conclusion has a direct bearing on the respondent’s present
    defence. If the very manner in which the levy was introduced was
    beyond the scope of delegated authority, then subsequent notifications
    which continue to demand duty on the same taxable fiction namely,
    that SEZ-to-DTA electricity is to be treated as exigible to customs duty
    cannot be insulated merely because they altered the rate from 16%
    to ten paise to three paise, or because they framed the imposition
    of customs duty prospectively. In other words, where the root is
    ultra vires, the branch cannot claim legitimacy by altering its foliage.
59. We must also underline a basic proposition of fiscal jurisprudence:
    a tax or duty can only be levied where there is (i) a clear charging
    provision enacted by competent legislature; (ii) an identifiable taxable
    event; and (iii) a statutory rate-making mechanism. The machinery
    provisions may regulate assessment and collection. Exemption
    notifications may relax or remit the levy. But neither machinery
    provisions nor exemption notifications can substitute for the absence
    of a charge.
60. Section 12 of the Customs Act is the charging provision. It contemplates
    a duty on goods imported into India. Section 30 of the SEZ Act says
    that goods cleared from an SEZ to the DTA “shall be chargeable to
    duties of customs as leviable on such goods when imported”. This is
    a parity clause. It says: treat SEZ-to-DTA clearances as if they bore
    the same duty as comparable imports. It does not say: regard every
22                                                            [2026] 2 S.C.R.

                          Supreme Court Reports


      SEZ-to-DTA clearance as an “import into India” for all purposes of
      Section 12, irrespective of physical reality, and irrespective of whether
      such imports actually bear any duty.
61. The High Court in 2015 correctly held that electrical energy generated
    within India and wheeled into the DTA is not, in truth, a case of
    import into India. The deeming fiction of Section 30 of the SEZ Act
    is intended to align duty treatment, not to expand the scope of the
    charging section beyond what Parliament has enacted. A deeming
    fiction cannot be pressed beyond the purpose for which it was enacted.
62. Put differently: Section 30 of the SEZ Act does not create a new
    customs levy. It only says that if (and to the extent that) such goods
    would have attracted customs duty had they physically crossed the
    border, then the same incidence will apply when those goods move
    from the SEZ to the DTA. If, on actual import, electrical energy attracts
    no customs duty, then, by force of Section 30, the same result i.e.,
    no customs duty must follow for SEZ clearances of electrical energy.
    Nothing in Section 30 either authorises or contemplates the imposition
    of a fresh or differential levy singling out SEZ-generated power.
63. This parity logic sits at the centre of the scheme. Imported electricity
    bore no customs duty. SEZ electricity a like commodity was
    nonetheless subjected to duty. That differential treatment violates
    both the statutory parity mandated by Section 30 of the SEZ Act
    and the equality guarantee under Article 14. The High Court in 2015
    captured this, and we reaffirm it.
64. The Union urged before us that the per-unit duties of ten paise
    and three paise were meant to recoup, in part, the benefit of duty-
    free inputs such as imported coal. That argument does not survive
    scrutiny. Rule 47(3) of the SEZ Rules already obliges the SEZ power
    generator, when electricity leaves the SEZ, to neutralise the customs
    duty foregone on inputs to that extent. The scheme already accounts
    for input duty benefit. Having so neutralised, to then impose an
    additional customs duty on the electricity output itself is to double
    count. That offends fairness and constitutional discipline.
65. On a plain application of the principles governing the power to tax,
    we are satisfied that the levy on electricity generated in the Special
    Economic Zone and supplied to the Domestic Tariff Area, as sought to
    be enforced against the appellant, has no sanction in law. The charge
[2026] 2 S.C.R.                                                         23

             Adani Power Ltd. & Anr v. Union of India & Ors.


     does not find support in the statutory scheme. We also find that,
     even after the decision rendered in 2015, there has been no change
     either in the law or in the relevant facts which could justify taking a
     view different from the one already taken. The legal position having
     remained the same, the conclusion reached earlier must continue to
     hold the field. Section 30 of the SEZ Act continued unchanged; the
     Customs Tariff continued to prescribe a nil rate on imported electrical
     energy; and the constitutional parameters of Articles 14 and 265
     remained constant. The subsequent notifications merely varied the
     form and rate of duty; they did not cure the fundamental absence of
     authority to tax. The attempt of the executive to reintroduce the very
     same levy through the route of an “exemption” notification cannot
     be sustained. What could not be done directly has been sought to
     be achieved indirectly, which is impermissible in law and contrary to
     the limits of delegated power. Section 25 of the Customs Act confers
     a power to exempt, not to impose. To use it as an instrument of
     levy transgresses the limits of delegated legislation and amounts
     to usurpation of the legislative function. The Court’s duty of judicial
     review extends to restraining such misuse of delegated authority.
     Hence, in substance and in law, the position after 2015 remained
     identical to what it was before; the same illegality persisted, and the
     same conclusion necessarily follows.

     RE: QUESTION III – RE: GRANT OF RELIEF IN THE ABSENCE OF
     A SEPARATE CHALLENGE TO THE EXEMPTION NOTIFICATIONS
66. We now turn to what was pressed by the respondents both before the
    High Court in 2019 and before us: namely, that the later notifications
    (Notification No. 91/2010-Cus. prescribing ten paise per unit and
    Notification No. 26/2012-Cus. prescribing three paise per unit) were
    not specifically impugned by the appellant, and therefore, absent a
    direct attack on their validity, no relief could be granted in respect
    of amounts paid thereunder.
67. We are unable to accept said contention. It proceeds on a
    misconception of what was before the High Court in 2016 and what
    was finally decided in 2015.
68. The appellant’s 2016 writ petition was not an abstract attempt to
    launch a fresh constitutional challenge to each successive notification
    in isolation. It was a sequel proceeding.
24                                                        [2026] 2 S.C.R.

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69. In administrative law, where a court of competent jurisdiction has
    struck down the foundation of a levy as ultra vires, that declaration
    renders all successive and derivative attempts to enforce the same
    levy equally unenforceable, unless the statutory or factual basis has
    materially changed. The State cannot defend the continuation of
    the same vice by saying, this is a different notification number. The
    Court is bound to look past the label and examine the substance.
70. To insist that the appellant ought to have challenged Notification No.
    91/2010-Cus. and Notification No. 26/2012-Cus. afresh, when those
    notifications do no more than perpetuate the same unauthorised
    levy in altered denomination, is to elevate form over substance.
    Constitutional adjudication does not proceed on technical formalism
    when illegality has already been declared in principle.
71. This Court, while exercising jurisdiction under Article 136, and the
    High Court, while exercising jurisdiction under Article 226, are vested
    with ample power to mould appropriate relief. Once a levy has been
    held to be beyond the authority of law, a constitutional court is not
    expected to remain a silent spectator while the very same levy is
    sought to be continued through successive or similar notifications.
    The jurisdiction of a constitutional court is remedial in nature and
    extends to ensuring that what has been declared unlawful is not
    brought back in another form. The contention that “no relief can
    be granted unless each successor notification is separately struck
    down” is inconsistent with that remedial character, and would reward
    repetition of illegality. We reject it.
72. We also find that there is no material factual distinction between
    the levy struck down in 2015 and the levy sought to be enforced
    thereafter against the appellant for the period between 16 September
    2010 and 15 February 2016. The commodity is the same (electrical
    energy). The movement is the same (SEZ to DTA). The asserted
    source of power is the same (customs levy under colour of Section
    25 of the Customs Act read with Section 30 of the SEZ Act). The
    only difference lies in the numerical rate and the period for which it
    applies. Those differences do not cure the fundamental absence of
    a lawful charging event and the misuse of an exemption mechanism
    to impose duty. The levy is the same in character, and it is that
    character which was condemned.
[2026] 2 S.C.R.                                                        25

             Adani Power Ltd. & Anr v. Union of India & Ors.


73. In our view, the High Court, in its judgment of 2019, fell into error
    in accepting the submission of the Union that the later notifications
    continued to operate merely because they were not specifically set
    aside in the decision of 2015. Once the levy itself had been held
    to be without authority of law, its continuance through subsequent
    notifications could not be sustained. The invalidity goes to the root
    and does not depend upon the form or sequence of the notifications.
    We reject the respondents’ contention that the appellant could not be
    granted relief because the later notifications were not independently
    impugned.
74. We accordingly hold that where a levy has been declared to be without
    authority of law, a subsequent petition seeking enforcement of that
    declaration and consequential relief cannot be treated as a fresh
    challenge merely because the levy is sought to be continued under
    later or similar notifications. In the absence of any new statutory
    basis, such notifications do not create a new cause of action.
    A constitutional court is entitled to grant effective relief without
    insisting upon separate challenges to each such notification.
    The High Court, in the impugned judgment of 2019, erred in
    taking a contrary view.

     RE: QUESTION IV – EFFECT OF A BINDING DECLARATION ON
     A LATER CO-ORDINATE BENCH
75. There remains one further aspect of principle. The High Court’s
    judgment of 15 July 2015 striking down the levy of customs duty on
    SEZ-to-DTA electrical energy was delivered by a Division Bench of
    that Court. The Union of India challenged that judgment before this
    Court. This Court declined interference. The High Court’s judgment
    thereby attained finality, both as between the parties and as a binding
    declaration of law within that jurisdiction.
76. The writ petition filed in 2016 by the appellant came to be heard
    in 2019 by another Division Bench of the same High Court. That
    Bench, while noting the existence of the 2015 judgment, proceeded
    on the basis that the earlier decision was confined to Notification No.
    25/2010-Cus. and to the period ending 15 September 2010. Having
    so read it down, the Bench in 2019 declined to extend relief to what
    it viewed as a “different” set of notifications.
26                                                         [2026] 2 S.C.R.

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77. The discipline expected of coordinate Benches does not permit such
    an approach. This Court, in State of Uttar Pradesh v. Ajay Kumar
    Sharma (2016) 15 SCC 289, has reiterated that once a coordinate
    Bench of a High Court has settled a question of law, a subsequent
    Bench of equal strength is bound to follow that view when confronted
    with the same issue. If the later Bench believes that the earlier view
    is so manifestly erroneous or inapplicable that it ought not to be
    followed, the later Bench must refer the matter to a larger Bench
    for reconsideration. What it cannot do is to sidestep or whittle down
    the earlier pronouncement by confining it artificially or by treating it
    as a fact-specific indulgence.
78. The discipline of precedent is not a matter of personal predilection;
    it is an institutional necessity. Stare decisis et non quieta movere
    which means to stand by what is decided and not to disturb what
    is settled, is a working rule which secures stability, predictability
    and respect for judicial outcomes. The law cannot change with the
    change of the Bench.
79. In the present case, if the Division Bench in 2019 was of the opinion
    that the 2015 decision could not, or ought not, apply to the later
    notifications or to the later period, the proper course was to request
    that the question be placed before a larger Bench of the High Court.
    The Bench in 2019 did not do so. Instead, it narrowed the effect
    of the 2015 judgment and declined relief for the subsequent years.
    That course was impermissible. The 2019 Bench was bound by the
    declaration of law in 2015, unless duly referred to a larger Bench.
80. We accordingly hold that the Division Bench of 2019 acted contrary to
    the settled doctrine of judicial discipline. When a coordinate Bench of
    a High Court has already determined a question of law, a subsequent
    Bench of equal strength is bound to follow that view; if it doubts its
    correctness, the only permissible course is to refer the matter to a
    larger Bench. This rule, has been reaffirmed by this Court in State of
    U.P. v. Ajay Kumar Sharma (2016) 15 SCC 289, is not procedural
    etiquette but a structural safeguard against judicial inconsistency.
    The discipline of stare decisis ensures coherence and predictability
    in law, which are indispensable to the legitimacy of adjudication. The
    2019 Bench, by confining the earlier decision to a narrow time frame
    without referring the matter to a larger Bench, effectively unsettled a
    settled proposition and undermined the authority of precedent. Such
[2026] 2 S.C.R.                                                           27

             Adani Power Ltd. & Anr v. Union of India & Ors.


     a course was impermissible. The coordinate Bench was duty-bound
     to apply the ratio of the 2015 judgment to the appellant’s case, and
     its failure to do so vitiates the impugned decision.
81. We now turn to an aspect which goes beyond the immediate
    dispute between the parties. The case also concerns the obligation
    of the administration to give full effect to judicial decisions once
    they have attained finality. The authority of the rule of law rests not
    only in the pronouncement of judgments but equally in their proper
    implementation. It is therefore necessary to briefly recall the principles
    that govern the conduct of the executive after a court has finally
    settled the legal position.
82. When a High Court of competent jurisdiction declares a levy to be
    ultra vires and unconstitutional, and this Court declines to interfere,
    that declaration cannot be treated as a one-time indulgence for
    a closed period. It is incumbent upon the authorities thereafter to
    conform their conduct to the law so declared. They cannot, consistent
    with constitutional discipline, continue to enforce the same levy for a
    later period on the strength of slightly altered subordinate instruments
    and then resist restitution on grounds of technical pleading.
83. It is well settled that in the public interest there must be an end to
    litigation. The appellant succeeded in 2015. The Union failed in its
    challenge before this Court. The appellant then approached the High
    Court in 2016 essentially seeking implementation of the declaration
    already made. To deny relief on the footing that it is a new notification
    or that period was not expressly mentioned is to frustrate finality and
    to compel the citizen to engage in repetitive litigation to secure, in
    practice, what has already been recognised in principle.
84. Accordingly we hold that once the 2015 judgment had declared the
    levy to be ultra vires and this Court had declined interference, it
    was incumbent upon the administrative authorities to conform their
    conduct to that declaration. Judicial pronouncements are not advisory
    opinions; they are binding commands of law. When the executive
    continues to enforce, under new guise, a levy that has been judicially
    struck down, it acts in defiance of constitutional discipline and
    erodes public confidence in the rule of law. Finality of adjudication
    is an essential component of good governance. The repetition of an
    invalidated levy through successive notifications compels needless
    litigation, burdens the courts, and subjects citizens to prolonged
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      uncertainty. The authorities in this case were obliged to treat the
      matter as concluded and ought to have extended the benefit of the
      2015 decision uniformly to all subsequent periods until the law was
      altered by legislative action. Their failure to do so justified judicial
      intervention. The doctrine interest reipublicae ut sit finis litium which
      essentially means, that it is in the public interest that there be an
      end to litigation would squarely apply; the State must exemplify
      obedience to judgments, not resistance to them.
85. This litigation has spanned more than a decade. The substantive
    question at its core was only this: whether, in the absence of a
    clear charging section, customs duty could be imposed on electrical
    energy cleared from an SEZ into the DTA? And, according to our
    observations above it stood answered in 2015 and that answer
    withstood scrutiny by this Court also. What ought to have followed
    thereafter was faithful implementation, not renewed resistance.
86. Accordingly, we summarise our conclusions as follows:
      (i)    The Gujarat High Court’s judgment dated 15 July 2015, as a
             matter of law, declared that customs duty could not be levied
             on electrical energy cleared from the appellant’s SEZ unit to
             the DTA, having regard to the absence of a lawful charging
             event under Section 12 of the Customs Act, the limited scope
             of Section 25 of that Act, the parity requirement of Section 30
             of the SEZ Act and the constitutional constraints of Articles
             14 and 265 is squarely applicable to the judgment and order
             dated 28.06.2019.
      (ii)   That declaration was not confined in principle to Notification
             No. 25/2010-Cus. or to the period ending 15 September 2010.
             It went to the authority to levy customs duty on SEZ-to-DTA
             electricity clearances in the statutory setting then obtaining.
      (iii) The subsequent notifications namely, Notification No. 91/2010-
            Cus. prescribing ten paise per unit and Notification No. 26/2012-
            Cus. prescribing three paise per unit, did not create a new levy
            on a new footing. They merely continued the same levy in altered
            form. The change in arithmetical rate by prospective character
            does not cure the lack of authority in principle.
      (iv) The argument that no relief could be granted in the absence of a
           fresh and specific challenge to each later notification is untenable.
[2026] 2 S.C.R.                                                          29

             Adani Power Ltd. & Anr v. Union of India & Ors.


           The appellant’s 2016 writ petition was a sequel, seeking
           enforcement of the prior declaration and refund of amounts
           deposited under protest. Constitutional courts are empowered
           to secure compliance with their own pronouncements and are
           not bound to insist on repetitive challenges to substantially
           identical measures.
     (v)   There was no material change in law or fact between 15
           September 2010 and 15 February 2016 that would justify a
           departure from the 2015 ruling. Section 30 of the SEZ Act
           remained unaltered. Imported electrical energy bore no customs
           duty under the Customs Tariff Act, 1975. The same parity logic
           applied to S.C.A. No. 2233 of 2016 disposed of on 28.06.2019
     (vi) The Division Bench of the High Court in 2019, being a co-ordinate
          Bench, was bound either to follow the 2015 decision or, if it
          doubted its correctness or applicability, ought to have referred
          the question to a larger Bench. It could not have circumvented
          that discipline by artificially narrowing down the earlier ruling.
          Its refusal to extend the 2015 declaration to the later period
          was therefore contrary to law.
     (vii) Once it is held that the levy itself was without authority of law,
           the State cannot retain the amount collected under such levy.
           Restitution is a necessary incident of the finding of illegality.

     CONCLUSION:
87. We declare that the levy of customs duty on electrical energy cleared
    by the appellant from its SEZ unit to the DTA during the relevant
    period, as sought to be enforced through Notification No. 25/2010-
    Cus., Notification No. 91/2010-Cus., Notification No. 26/2012-Cus.,
    and similar instruments, was without authority of law.
88. We accordingly hold that the impugned judgment of the High Court
    dated 28 June 2019 cannot be sustained. In view of the foregoing
    discussion, the appeal is allowed. The judgment and order dated 28
    June 2019 of the High Court of Gujarat in Special Civil Application
    No. 2233 of 2016 is set aside.

     RE: QUESTION V – WHAT DIRECTIONS ?
89. The respondents, namely the Union of India through the concerned
    Ministry and the jurisdictional customs authorities, shall, after due
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                             Supreme Court Reports


      verification, refund to the appellant such amount that has been
      deposited in cash or through encashment of security or otherwise
      under protest by the appellant, towards customs duty on the clearance
      of electrical energy from SEZ unit into the DTA for the period in
      question, namely, 16 September 2010 to 15 February 2016. It is
      made clear that the said refund shall not carry any interest.
90. The verification and refund exercise shall be undertaken and be
    completed by the jurisdictional Commissioner of Customs within a
    period of eight (8) weeks from the date of this judgment. The appellant
    shall cooperate by furnishing the particulars of such deposits made if
    sought for by the authorities for the aforesaid period. The authorities
    shall not raise any hyper-technical objections so as to defeat the
    substance of this direction.
91. It is further directed that no further demand shall be enforced against
    the appellant in respect of customs duty on electrical energy cleared
    from its SEZ unit to the DTA for the period covered in this appeal,
    as the levy having been held unsustainable. For the avoidance of
    doubt, we clarify that we express no opinion as to any future legislative
    regime that Parliament may enact. Our findings are confined to the
    aforesaid period and statutory framework arising in the present appeal.
92. In view of the directions issued above, we do not consider it necessary
    to make any order as to costs and it is made easy. All pending
    applications, stands disposed of.

      Result of the case: Appeal allowed.




      †
          Headnotes prepared by: Ankit Gyan