In a significant win for Adani Power Limited, the Supreme Court on Monday, January 5, 2025, ruled that customs duty cannot be charged on electricity supplied from a Special Economic Zone (SEZ) to the Domestic Tariff Area (DTA). This decision overturned a 2019 judgment by the Gujarat High Court that had imposed the levy on power generated at Adani’s Mundra plant. The two-judge Bench, Justices Aravind Kumar and N.V. Anjaria, declared the duty had no statutory authority and that the State cannot keep amounts collected through an invalid tax. The Court directed the jurisdictional Commissioner of Customs to verify Adani Power’s claims and issue refunds within eight weeks. It also warned officials not to create “hyper-technical objections” to block the relief granted. The Bench stated, “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.” Adani Power’s coal-based thermal plant in Mundra SEZ has an installed capacity of 4,620 MW. It supplies electricity under long-term agreements to Gujarat and Haryana distribution companies and also meets its SEZ demands. The dispute started in 2010 when customs rules were amended to impose duty on electricity supplied from SEZs to DTAs, applied retrospectively from June 2009. In 2015, the Gujarat High Court allowed exemption from customs duty for Adani Power only from June 2009 to September 2010. A later 2019 Gujarat High Court ruling denied any further exemption, citing concerns that extending relief would give Adani unfair advantage by avoiding duty on both inputs and output electricity. The Supreme Court rejected this view, saying there was no real difference between the previous invalid levy and the later ones. The Court emphasized that repealing unlawful levies should be effective immediately and not blocked by technicalities. It also clarified that renewing the same unlawful tax through new notifications does not create a fresh reason for the tax. This judgment comes as a huge relief to Adani Power, allowing it to recover customs duty amounts paid on SEZ-to-DTA power supplies over many years.