Customs Act, 1962 and Conflict with Treaty / FTA : HC Resolves the Dilemma

 Customs Act, 1962 and Conflict with Treaty / FTA : HC Resolves the Dilemma

In a recent decision it was argued that a Free Trade Agreement dated August 30, 2009 (AIFTA) between the Republic of India and the Association of Southeast Asian Nations (ASEAN), governs the subject transaction. Accordingly, the Petitioners contended that the initiation of any adjudication proceedings under the Customs Act , 1962 without observing the due process of law and as prescribed in the treaty, which would include the specific dispute resolution mechanism provided under Article 24, is wholly without jurisdiction and unsustainable.

It was held in Purple Products Pvt Ltd v. Union of India [2025] GCtR 1279 (Bombay) that in the context of applying treaties into National Legal Systems, two aspects generally arise: (i) the applicability of the international treaty in domestic law; and (ii) the enforceability of the treaty in municipal law and before municipal courts.

It was held that the provisions of Article 24 of AIFTA cannot be said to have formed a part of the domestic or municipal laws or transformed into domestic or municipal laws to seek their enforcement before a domestic or municipal Court. Based on a treaty provision that is not transformed or incorporated into the national law or statute, the provisions of the existing Customs Act cannot be undermined, or the powers and jurisdiction of the customs authorities questioned.