HC Quashes IEC Denied Entity Listing for Violation of Natural Justice

Centax Editorial Board

June 6, 2026

• 2 min. read

Case Details: Reckitt Benckiser India Pvt. Ltd. vs. Union of India (2026) 42 Centax 365 (Del.)

Judiciary and Counsel Details

- Devendra Kumar Upadhyaya, CJ. & Tejas Karia, J.
- S/Shri Arvind P. Datar, Sr. Adv. with R. Jawahar Lal & Sayyam Maheshwari, Advocates, for the Appellant.
- Ms Shiva Lakshmi & Shri Pravar Dennison, Advocates, for the Respondent.

Facts of the Case

The appellant was engaged in import and export activities and held a valid Importer Exporter Code (IEC). The DGFT cancelled certain SEIS scrips issued to the appellant and imposed a penalty, alleging misdeclaration. Subsequently, a communication was issued placing the appellant’s IEC in the “Denied Entity List”, effectively disabling it from undertaking import and export activities. The appellant challenged both actions before the High Court. The Single Judge relegated the appellant to the statutory appellate remedy and did not adjudicate the challenge to the communication that placed the IEC on the Denied Entity List. Aggrieved by the said order, the appellant preferred an intra-court appeal before the Delhi High Court.

High Court Held

The High Court held that placement of the appellant’s IEC in the Denied Entity List had serious civil consequences as it effectively prevented the appellant from carrying on import and export activities. It was observed that the impugned communication had been issued without prior notice, opportunity of hearing, or disclosure of reasons.

The Court therefore held that the action was contrary to the principles of natural justice and the statutory framework governing suspension or cancellation of IEC. Accordingly, the communication was quashed with liberty to the authorities to initiate fresh proceedings in accordance with law. The appeals were accordingly allowed.