Delhi HC Judge Recuses from IndiGo Customs Duty Refund Case; Matter to Be Heard by Another Bench

Delhi High Court judge Shail Jain on Friday recused herself from hearing IndiGo Airlines’ petition seeking a refund of over ₹900 crore in customs duty paid on aircraft engines and parts re-imported into India after overseas repairs. The case was originally listed before a bench comprising Justices Prathiba M Singh and Shail Jain. Justice Jain stepped aside citing a conflict of interest, as her son is employed as a pilot with IndiGo.

The court noted in its order: “List before a bench of which one of us (Justice Shail Jain) is not a member, subject to orders of the Chief Justice.” The matter is expected to be taken up by another bench, likely on December 19.

IndiGo’s counsel, V. Lakshmikumaran, stated that the airline had already paid the basic customs duty on aircraft engines and parts without dispute after re-import for repairs. Additionally, the airline had discharged GST under the reverse charge mechanism, as the repair activity qualified as a service. However, the customs authorities allegedly treated the same transaction as a fresh import of goods and demanded duty payment again.

He further explained that despite a prior ruling by the customs tribunal declaring the levy unconstitutional, IndiGo was allegedly compelled to pay the duty to secure clearance of critical components. Subsequent refund claims were reportedly denied, as customs authorities directed the airline to seek reassessment of each bill of entry—a process that has not yet been completed.

The petition comes amid a major operational disruption at IndiGo, which has led to thousands of flight cancellations across India. The airline has cited multiple challenges, including pilot shortages, cascading delays from Airbus A320 software advisories, new Flight Duty Time Limitations (FDTL) fatigue rules, and the aggressive winter schedule implemented since October 26.

The government has temporarily suspended the new pilot rest norms, imposed airfare caps, and deployed additional trains to assist stranded passengers. On Tuesday, the civil aviation ministry directed IndiGo to reduce operations by 10% across all sectors to stabilize the airline and reduce flight cancellations.

Aviation Minister Ram Mohan Naidu emphasized that the reduction in operations was necessary to bring the airline’s functioning back to normal and protect passenger interests.

The Delhi High Court had earlier criticised the Centre and the Directorate General of Civil Aviation (DGCA) for not taking prompt action against IndiGo regarding manpower shortages, which resulted in mass cancellations affecting lakhs of passengers nationwide.