Judge Cites Son's Employment with IndiGo, Recuses Herself from Airline's Rs. 900 Crore Customs Duty Petition

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IndiGo has filed a petition at the Delhi High Court (HC) seeking a refund of Rs. 900 crore for levying customs duty on re-imported aircraft parts. The case was presented before a bench of justices, including Prathiba M Singh and Shail Jain.

However, the justice Jain rescued herself from the hearing as her son is employed at IndiGo as a pilot. This is on account of the principle of natural justice that includes the maxim "no man can be a judge in his own cause" (nemo judex in causa sua).

Double Taxation on Re-imported Aircraft Parts

InterGlobe Aviation, operating IndiGo, filed a petition with the Delhi High Court for a refund. The company seeks nearly Rs. 900 crore from the Customs department. This amount is for the IGST and Compensation Cess paid on repair costs of re-imported aircraft parts. The airline argues that this levy constitutes illegal double taxation. Aircraft parts sent abroad for repairs remain the carrier's property. The airline paid GST on the repair service under the reverse charge mechanism.

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Despite this, Customs imposed IGST and Compensation Cess on the repair value again. IndiGo contends the re-imported parts are a service, not a fresh import of goods. In March, a High Court judgment declared the levy of IGST and Compensation Cess on re-imported repaired goods unconstitutional. That ruling found the relevant part of the 2021 Customs notification invalid.

Conflict of Interest Leads to Bench Change for Rs. 900 Crore Case

The petition for the Rs. 900 crore customs duty refund came before a Delhi High Court division bench. Justices Prathiba M. Singh and Shail Jain were listed to hear the matter. However, the hearing could not proceed before Justice Shail Jain as she rescued herself from the case owing to a conflict of interest. She informed the court that her son is employed as a pilot with IndiGo.

Consequently, the matter will be placed before a different bench. The Chief Justice's order will dictate the assignment of the new bench. IndiGo had paid the substantial duty "under protest" through over 4,000 bills of entry. They did this to secure the timely clearance of crucial aircraft components.

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