Minimum Import Price On Steel Notification Enforceable Only From Gazette Publication, Not Website Upload: Supreme Court

The Supreme Court has ruled that a notification imposing a Minimum Import Price (MIP) on steel products becomes legally enforceable only from the date of its publication in the Official Gazette and not from the date it is uploaded on a government website.

Allowing a batch of appeals filed by Viraj Impex Pvt. Ltd. and other steel importers, a Division Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe set aside the Delhi High Court judgment, which had upheld the application of the MIP notification from the date of its online upload.

Disagreeing with the High Court, the Top Court held that a notification imposing restrictions acquires force only upon its publication in the Official Gazette and cannot be enforced from the date of its mere upload on a government website.

Holding that the notification became effective only on February 11, 2016, the Apex Court ruled that the expression "date of this Notification" must necessarily mean the date of its publication in the Official Gazette. Since the appellants had opened irrevocable letters of credit prior to that date and had complied with the procedural requirements under the Foreign Trade Policy, the Minimum Import Price could not be applied to their imports.

"A Notification cannot operate in a fragmented manner. In law, it is born only upon publication in the Official Gazette, and it is from that date alone that rights may be curtailed or obligations imposed. To hold otherwise would permit unpublished delegated legislation to burden citizens", explained the bench.

The appellants are companies engaged in the import and trading of steel products. Prior to February 2016, these products were freely importable under Chapter 72 of the Indian Trade Classification under the Foreign Trade Policy (FTP) 2015-2020.

Between January 29 and February 4, 2016, the importers entered into firm contracts with foreign suppliers in China and South Korea and opened irrevocable letters of credit on February 5, 2016.

On the same day, the Directorate General of Foreign Trade (DGFT) uploaded Notification No. 38/2015-2020 on its website, introducing the Minimum Import Price on 173 steel products. The uploaded notification itself stated that it was "to be published in the Official Gazette." Eventually, the notification was published in the Official Gazette on February 11, 2016.

Anticipating restrictions, the appellants applied for registration of their letters of credit under the transitional protection provided in Para 1.05(b) of the Foreign Trade Policy.

Subsequently, the appellants approached the Delhi High Court, contending that the MIP Notification, having been published in the Official Gazette on February 11, 2016, could not be applied to imports covered by Letters of Credit opened earlier.

While the High Court agreed that the notification became operative from February 11, 2016, it held that uploading the notification on February 5, 2016, constituted sufficient notice and restricted the benefit of exemption only to letters of credit opened prior to that date.

The Court held that para 2 of the MIP notification expressly incorporates Para 1.05(b) of the Foreign Trade Policy, which grants transitional protection to imports made under irrevocable letters of credit opened before the imposition of restrictions.

Denying such protection, the apex court observed, would undermine commercial certainty and offend the rule of law.

The bench emphasised that 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 top court stated that "the Notification issued under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 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."

The bench accordingly set aside the Delhi High Court judgment, allowed the appeals, and held the importers entitled to the benefit of transitional protection.