The Supreme Court ruled that a government notification becomes legally binding only after it is published in the Official Gazette, not when it is uploaded on a website. Setting aside the Delhi High Court ruling, the Court held that unpublished notifications cannot impose obligations on citizens.
The Supreme Court of India has clearly held that a notification issued by the Central Government under the Foreign Trade (Development and Regulation) Act, 1992 becomes legally binding only after it is published in the Official Gazette, and not merely when it is uploaded on a government website.
The Court ruled that an online upload cannot replace the mandatory requirement of Gazette publication for a notification to have the force of law.
A Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe set aside a judgment of the Delhi High Court which had earlier held that uploading a notification on the Directorate General of Foreign Trade (DGFT) website was sufficient to bind importers.
The Supreme Court disagreed with this view and held that the “date of notification” mentioned in such notifications must be understood as the date on which it is actually published in the Official Gazette.
The appeals before the Supreme Court arose from a common order passed by the Delhi High Court on December 21, 2018.
The High Court had dismissed writ petitions filed by Viraj Impex Pvt. Ltd. and other importers who were engaged in importing and trading mild steel products. These steel items were freely importable under the existing policy before February 2016.
Between January 29, 2016 and February 4, 2016, the importers had entered into sale contracts with suppliers based in China and South Korea. On February 5, 2016, they opened irrevocable Letters of Credit in favour of the foreign exporters.
On the same day, February 5, 2016, the DGFT uploaded Notification No. 38/2015-2020 on its official website. This notification introduced a Minimum Import Price (MIP) for certain steel products.
Importantly, the notification itself carried a note stating, “To be published in the Official Gazette of India.” The notification was later published in the Official Gazette only on February 11, 2016.
The importers approached the Delhi High Court arguing that since the notification was officially published on February 11, 2016, it could not be applied to imports backed by Letters of Credit that had already been opened before that date.
However, the High Court rejected this argument and held that although the notification came into operation from the date of Gazette publication, the act of uploading it on February 5, 2016 gave sufficient notice to importers and therefore bound those who had not opened Letters of Credit before that date.
Before the Supreme Court, the appellants strongly argued that the notification had no legal existence before its publication in the Official Gazette on February 11, 2016. They submitted that under Paragraph 2 of the notification read with Paragraph 1.05(b) of the Foreign Trade Policy, an importer is entitled to protection if the irrevocable Letter of Credit was opened before the date on which the restriction was imposed.
Since the restriction legally came into force only on February 11, 2016 and their Letters of Credit were opened on February 5, 2016, they claimed that they were entitled to the exemption.
On the other hand, the Union of India argued that while the notification became effective from February 11, 2016, the benefit under the transitional provision was limited only to those importers who had opened Letters of Credit before February 5, 2016.
The government contended that the “date of notification” should remain fixed as February 5, 2016, even if the enforcement date was later, relying on examples where laws have different dates of enactment and enforcement.
The Supreme Court rejected both the reasoning of the High Court and the arguments of the Union of India. The Bench emphasised that publication in the Official Gazette is a mandatory legal requirement for delegated legislation.
Referring to Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, the Court pointed out that the Central Government can regulate imports and exports only through an order that is “published in the Official Gazette.”
Justice Alok Aradhe, who authored 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 stated:
“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 warned that accepting the government’s argument would “permit unpublished delegated legislation to burden citizens,” which the Supreme Court has consistently rejected in earlier judgments.
While interpreting the phrase “date of notification,” the Court made it clear that once it is held that the notification became legally effective only on February 11, 2016, the same date must apply for interpreting the transitional provision under Paragraph 2. Any other interpretation would create confusion and uncertainty for importers.
The Court also observed that denying the benefit of the transitional protection 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.”
In its final decision, the Supreme Court allowed the appeals and quashed the Delhi High Court’s judgment dated December 21, 2018.
The Court conclusively 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.”
As a result, the importers who had opened irrevocable Letters of Credit before February 11, 2016 and had complied with the procedural requirements under the Foreign Trade Policy 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.
The case was titled Viraj Impex Pvt. Ltd. vs. Union of India & Anr., arising out of SLP (C) No. 1979 of 2019, and was decided by the Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe.
Read More Reports On Official Gazette
FOLLOW US FOR MORE LEGAL UPDATES ON YOUTUBE
