ADANI POWER LTD. & ANR versus UNION OF INDIA & ORS

Citation: [2026] 2 S.C.R. 1 · Decided: 05-01-2026 · Supreme Court of India · Bench: ARAVIND KUMAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[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
2
[2026] 2 S.C.R.
Supreme Court Reports
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-

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