The Delhi High Court has directed the Central Board of Indirect Taxes and Customs (CBIC) and the Commissioner of Customs to examine whether startups and small businesses should be granted special relief in customs procedures.
A division bench of Justice Prathiba M. Singh and Justice Shail Jain observed that under Section 110 of the Customs Act, 1962, the prescribed timelines allow seizure of goods for six months, with the possibility of an additional six-month extension. The judges noted that such long timelines may place undue burdens on startups and micro, small, and medium enterprises (MSMEs), especially when no prohibited goods are involved.
The court suggested that preferential treatment could be extended in areas such as timelines, warehousing, and provisional release of seized consignments—particularly for low-value, non-prohibited goods.
The bench stressed that CBIC and customs authorities should reassess existing rules to determine if expedited processes can be introduced for small businesses to prevent unnecessary hardship. They have been asked to file affidavits on the matter by October 28.
The case came before the court following a petition by Mitraj Business, a recognised startup under the MSME sector engaged in the baby care products market under the brand name Fabie Baby. The company had imported certain packaging materials from Dubai, which reached Mundra Port in Gujarat before being transported to the Inland Container Depot (ICD) in Tughlakabad, Delhi. Customs officials later issued an alert, citing undeclared extra cartons in the consignment, leading to its seizure.
The court pointed out that India’s broader policy framework aims to promote startups and MSMEs, enabling them to adapt to challenges arising from technological shifts, changing consumer demand, and the need for access to new markets. Within this framework, the court said, small businesses deserve fair consideration, provided the goods are not prohibited.
The bench also remarked that giving some leeway to such enterprises would align with the government’s startup and MSME promotion schemes, including the International Cooperation Scheme.
Case Details
Case Title: Mitraj Business Private Limited Versus UOI
Case No.: W.P.(C) 12907/2025 & CM APPL. 52724/2025
Date: 1st September, 2025
Counsel For Petitioner: Riya Soni and Mr. Sunil Kumar Tripathi
Counsel For Respondent: Anushree Narain
