The Supreme Court has held that a notification issued by the Central Government under the Foreign Trade (Development and Regulation) Act, 1992, acquires the force of law only upon its publication in the Official Gazette, and not merely upon being uploaded on the official website.
The Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe set aside a Delhi High Court judgment which had held that the uploading of a notification constituted sufficient notice to bind importers. The Apex Court ruled that the “date of notification” mentioned in the impugned notification must necessarily be construed as the date of its publication in the Official Gazette.
Background of the Case
The appeals arose from a common order dated December 21, 2018, passed by the High Court of Delhi dismissing writ petitions filed by Viraj Impex Pvt. Ltd. and other importers. The appellants are engaged in the import and trading of mild steel items. These items were freely importable prior to February 2016.
Between January 29, 2016, and February 4, 2016, the appellants entered into sale contracts with exporters from China and South Korea. On February 5, 2016, the appellants opened irrevocable Letters of Credit in favor of the foreign suppliers.
On the same day, i.e., February 5, 2016, the Directorate General of Foreign Trade (DGFT) uploaded Notification No. 38/2015-2020 on its website, introducing a Minimum Import Price (MIP) for specified steel products. The document contained an endorsement stating, “To be published in the Official Gazette of India.” The Notification was subsequently published in the Official Gazette on February 11, 2016.
The appellants approached the High Court contending that the Notification, having been published in the Official Gazette on February 11, 2016, could not apply to imports covered by Letters of Credit opened earlier. The High Court, however, dismissed the challenge, holding that while the Notification operated from the date of publication, the uploading on February 5, 2016, constituted sufficient notice to bind importers whose Letters of Credit were not opened before that date.
Arguments of the Parties
The appellants argued that the Notification was non-est (non-existent) prior to its publication in the Official Gazette on February 11, 2016. It was contended that under Paragraph 2 of the Notification read with Paragraph 1.05(b) of the Foreign Trade Policy (FTP), the importer should have opened the irrevocable Letters of Credit before the date of imposition of the restriction. Since the restriction came into force on February 11, 2016, and the Letters of Credit were opened on February 5, 2016, they claimed entitlement to the exemption.
The respondents (Union of India) argued that while the Notification came into effect from February 11, 2016, the benefit under Paragraph 2 was restricted to Letters of Credit entered into before February 5, 2016. They submitted that the “date of notification” should remain static as February 5, 2016, citing examples of legislations where the enactment date differs from the enforcement date.
Court’s Analysis
The Supreme Court rejected the reasoning of the High Court and the arguments of the respondents. The Bench emphasized the mandatory nature of publication requirements for delegated legislation.
Referring to Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, the Court noted that the Central Government is empowered to regulate imports and exports by an “Order published in the Official Gazette.”
Justice Aradhe, writing the judgment, observed:
“Law, to bind, must first exist. And to exist, it must be made known in the manner ordained by the legislature… The requirement of publication in the Gazette, therefore, serves a dual constitutional purpose i.e. (a) it ensures accessibility and notice to those governed by the law, and (b) it ensures accountability and solemnity in the exercise of delegated legislative power. The requirement of publication in the Gazette, is therefore not an empty formality. It is an act by which an executive decision is transformed into law.”
The Court further held:
“It is manifest that the Notification could not have acquired the force of law prior to its publication in the Official Gazette on 11.02.2016. Indeed, the Notification itself acknowledges its incompleteness by declaring that it is ‘to be published in the Gazette of India’. The acknowledgement is a confession that, until such publication, the Notification had not crossed the threshold from intention to obligation.”
The Bench stated that holding otherwise would “permit unpublished delegated legislation to burden citizens,” a proposition expressly rejected by the Court in previous decisions.
Regarding the interpretation of the “date of notification,” the Court ruled that once it is held that the Notification became operative only on February 11, 2016, the expression in Paragraph 2 must be construed to mean the date of publication in the Official Gazette.
The Court also noted that denying the benefit of the transitional provision to the appellants would “defeat the plain language of the FTP and would undermine the object of the parent Act, and would introduce uncertainty to a field where certainty is indispensable.”
Decision
The Supreme Court allowed the appeals and quashed the High Court’s judgment dated December 21, 2018.
The Court held:
“We accordingly hold that the Notification issued under Section 3 of the Act acquires the force of law only upon its publication in the Official Gazette. The expression ‘date of this Notification’ must necessarily mean the date of such publication.”
Consequently, the appellants, having opened irrevocable Letters of Credit prior to February 11, 2016, and having complied with the procedural requirements under Paragraph 1.05(b) of the FTP, were held entitled to the benefit of the transitional provision. The Minimum Import Price introduced by the Notification could not be applied to their imports.
Case Details:
- Case Title: Viraj Impex Pvt. Ltd. vs. Union of India & Anr.
- Case No.: Civil Appeal No. of 2026 (@ S.L.P. (C) No. 1979 of 2019)
- Coram: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
