SC stays Gujarat HC order reinstating anti-dumping duty on imported PTA

The Supreme Court on Monday stayed a Gujarat High Court order that reinstated anti-dumping duty on imported purified terephthalic acid (PTA) from Korea and Thailand.

PTA is used to make products containing polyester such as sportswear, swimsuits, jackets, sofas, curtains, and car seat covers.

The move to reinstate anti-dumping duty on imported PTA came as a relief for domestic manufacturers. This decision was a culmination of petitions filed by local producers to protect them from damage caused by cheap imports.

The Union Government had on July 24, 2019, imposed anti-dumping duty on PTA imports for five years. But in February 2020, Union finance minister Nirmala Sitharaman, in her budget for 2020-21, announced the removal of the duty citing public interest.

 

In the larger public interest, the Union Budget proposed to abolish anti-dumping duty on PTA. The Finance Minister said that PTA is a critical input for textile fibres and yarns. Its easy availability at competitive prices is desirable to unlock immense potential in the textile sector, which is a significant employment generator, the press release by the government had said.

Reliance Industries, Indian Oil Corp. Ltd, and other domestic producers of the material stood to see their profit margins shrink due to the removal of the anti-dumping duty, according to news reports.

Reliance Industries and others had then approached the Gujarat High Court arguing that removing the duty without following proper procedures was arbitrary and unjust.

Following this, the Gujarat High Court reinstated the notification from 2019 and instructed the Union government to initiate a sunset review process to determine whether to continue or withdraw the duty.

“The government shall immediately proceed in respect of the sunset review process in relation to the continuance or otherwise of the countervailing duty already commenced as per notification dated December 08, 2021,” the High Court order said.

The government, however, said the 2019 notification would have expired on July 23 this year and could not be revived retroactively.

The Supreme Court bench of Justices BV Nagarathna and N Kotiswar Singh stayed the Gujarat High Court’s order and sought responses from Reliance Industries and the other parties involved.

"Issue notice to the respondents....Consequently, proceedings in R/SCA No.10271/2024 (Gujarat High Court) shall also remain stayed," said the order.

“Can the High Court supervise the economy?" Justice Nagarathna had asked during the hearing.