Notification Under S. 5 of FTDR Act Can’t Be Applied Retrospectively To Refuse Advance Authorization To Importer: Delhi High Court

The Delhi High Court has ruled that a notification issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act), which empowers the Central Government to formulate and announce the foreign trade policy, cannot be applied retrospectively by the Central Government.

The bench of Justice Prathiba M. Singh held that once a notification issued under Section 5 of the FTDR Act is quashed by the Court, the same cannot be relied upon by the Directorate General of Foreign Trade (DGFT) to refuse Advance Authorization to an importer seeking import of certain goods, on the ground that the importer was not a party to the said proceedings before the Court.

The petitioner, Jindal Exports and Imports Pvt Ltd, is engaged in the manufacturing and export of gold jewellery, medallions and bars, and in trading and in trading of gold, silver, platinum and palladium.

The petitioner, in June 2019, applied for issuance of an Advance Authorization from the DGFT for import of gold bars in order to enable manufacturing of gold jewellery and medallions.

Relying on the public notice dated 26th September 2019, issued by the DGFT, which provided that Advance Authorization would not be issued where the items for export were ‘Gold Medallions and Coins’ or ‘any other jewellery/articles manufactured by a fully mechanized process’, the DGFT rejected the petitioner’s application.

oting that the Division Bench of the Delhi High Court in M.D. Overseas Limited vs. Union of India (2020) had quashed and set aside the said public notice (No.35/2015-2020), dated 26th September 2019, the petitioner sought to review the order passed by the DGFT.

The DGFT, however, passed an order rejecting the review on the ground that the petitioner was not a party to the said writ petition. The DGFT thus concluded that the petitioner cannot be granted benefits of the High Court’s order.

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