Court’s decision
The Supreme Court of India allowed a batch of civil appeals and set aside the Delhi High Court’s judgment which had upheld partial enforcement of a Directorate General of Foreign Trade notification imposing Minimum Import Price on steel products from the date of website upload. The Court held that a notification issued under the Foreign Trade Act acquires the force of law only upon publication in the Official Gazette, and cannot operate from the date of online upload — “delegated legislation is born only upon gazette publication”; High Court judgment quashed, importers granted full transitional protection.
Court’s decision
A Bench comprising Justice Alok Aradhe and Justice Pamidighantam Sri Narasimha overturned the common judgment dated 21 December 2018 of the Delhi High Court, holding that the Minimum Import Price notification issued on 5 February 2016 became legally operative only on 11 February 2016, the date of its publication in the Official Gazette. The Court ruled that imports backed by irrevocable letters of credit opened prior to gazette publication were entitled to protection under the Foreign Trade Policy.
Facts
The appellants were importers and traders of mild steel products such as hot rolled coils, cold rolled coils and steel plates, which were freely importable under the Foreign Trade Policy 2015–2020. Between 29 January and 4 February 2016, the appellants entered into firm contracts with overseas suppliers in China and South Korea. On 5 February 2016, they opened irrevocable letters of credit in favour of the exporters.
On the same day, the Directorate General of Foreign Trade uploaded a notification on its website introducing a Minimum Import Price for 173 steel products under Chapter 72. The uploaded document itself stated that it was “to be published in the Gazette of India”. The notification was formally published in the Official Gazette only on 11 February 2016.
Anticipating restrictions, the appellants applied on 8 February 2016 for registration of their letters of credit under the transitional protection provided in paragraph 1.05(b) of the Foreign Trade Policy. The authorities denied the benefit, leading the appellants to challenge the notification before the Delhi High Court. While the High Court accepted that the notification was effective from 11 February 2016, it held that importers who had not opened letters of credit prior to 5 February 2016 were not entitled to transitional protection. Aggrieved, the importers approached the Supreme Court.
Issues
The central issue before the Supreme Court was whether the expression “date of this notification” in the Minimum Import Price notification could be interpreted to mean the date on which the notification was uploaded on the DGFT website, or whether it necessarily meant the date of its publication in the Official Gazette. A related issue was whether importers who had opened irrevocable letters of credit prior to gazette publication were entitled to protection under paragraph 1.05(b) of the Foreign Trade Policy.
Appellants’ arguments
The appellants contended that the notification had no legal existence prior to its publication in the Official Gazette on 11 February 2016. They argued that paragraph 2 of the notification, read with paragraph 1.05(b) of the Foreign Trade Policy, clearly entitled importers to protection if irrevocable letters of credit were opened before the imposition of restriction, which could only occur upon gazette publication.
It was submitted that online upload could not substitute the statutory requirement of publication, and that treating 5 February 2016 as the operative date would amount to enforcing unpublished delegated legislation. Reliance was placed on settled Supreme Court jurisprudence on publication and enforceability of subordinate legislation.
Respondents’ arguments
The Union of India argued that while the notification came into effect on 11 February 2016, the benefit of transitional protection was consciously restricted to letters of credit opened prior to 5 February 2016, which was the date mentioned on the notification. It was contended that legislative instruments can be enacted on one date and brought into force on another, and that the expression “date of notification” need not always coincide with the date of publication.
The respondents further argued that in case of any conflict between the Foreign Trade Policy and the statutory notification, the latter would prevail. They urged that the High Court’s reasoning did not warrant interference.
Analysis of the law
The Supreme Court undertook a detailed examination of the law governing enforceability of delegated legislation. It reiterated that delegated legislation, unlike parliamentary enactments, lacks the visibility of legislative debate and therefore must strictly comply with statutory publication requirements. Publication in the Official Gazette is not a procedural formality but a constitutional safeguard ensuring notice, certainty and accountability.
Relying on a consistent line of precedent, the Court held that a statutory order or notification becomes enforceable only when published through a mode prescribed by the parent statute. Where the statute mandates publication in the Official Gazette, no alternative mode — including website upload — can confer legal force.
Precedent analysis
The Court relied on landmark decisions holding that law must be made known before it can bind citizens, and that unpublished subordinate legislation cannot impose obligations or curtail rights. Earlier rulings emphasising strict compliance with gazette publication for delegated legislation were reaffirmed and applied to the foreign trade regime, which requires predictability and legal certainty for commercial actors.
Court’s reasoning
Applying these principles, the Court held that the Minimum Import Price notification acquired legal force only on 11 February 2016, when it was published in the Official Gazette. The phrase “date of this notification” could not be read in isolation or assigned a fictional meaning divorced from statutory requirements.
The Court noted that the notification itself acknowledged that it was “to be published” in the Gazette, thereby admitting that it was incomplete until such publication. Once it was held that the notification became operative only on 11 February 2016, the transitional protection under paragraph 1.05(b) of the Foreign Trade Policy necessarily extended to all importers who had opened irrevocable letters of credit before that date and complied with procedural requirements.
The Court rejected the High Court’s approach of treating the website upload as sufficient notice, holding that such a view would permit enforcement of unpublished delegated legislation and undermine the rule of law.
Conclusion
The Supreme Court allowed the appeals, quashed the Delhi High Court’s judgment dated 21 December 2018, and held that the appellants were entitled to full transitional protection under paragraph 1.05(b) of the Foreign Trade Policy. The Minimum Import Price notification was declared inapplicable to imports covered by irrevocable letters of credit opened prior to 11 February 2016. No order as to costs was passed.
Implications
This judgment is a significant reaffirmation of the rule that delegated legislation binds citizens only upon formal gazette publication. It provides crucial certainty to importers and exporters operating under the Foreign Trade Act and curtails attempts to enforce trade restrictions through informal or premature modes of communication. The ruling also strengthens transitional protection mechanisms under the Foreign Trade Policy and reinforces judicial insistence on strict compliance with statutory publication requirements in fiscal and trade regulation.
Case law references
- B.K. Srinivasan v. State of Karnataka: Publication is a condition precedent for enforceability of subordinate legislation; applied.
- Harla v. State of Rajasthan: Law must be promulgated before it can bind; relied upon.
- Gulf Goans Hotels v. Union of India: Strict compliance with gazette publication for delegated legislation; reaffirmed.
- Union of India v. G.S. Chatha Rice Mills: Enforceability begins only after statutory publication; applied.
FAQs
1. When does a DGFT notification become legally enforceable?
Only upon its publication in the Official Gazette, not from the date of website upload.
2. Can trade restrictions apply retrospectively to prior letters of credit?
No. Importers with irrevocable letters of credit opened before gazette publication are protected under the Foreign Trade Policy.
3. Does online publication have any legal effect?
No, where the statute mandates gazette publication as the exclusive mode of promulgation.
