A Single Bench of Delhi High Court has held that the advance authorization could not be denied to the importer merely based on notification under Section 5 of the Foreign Trade Development and Regulation Act, 1992.
The Petitioner Jindal Exports and Imports Private Limited is a company engaged in manufacturing and export of gold jewellery, articles, medallions, bars, plates and rods and trading of gold, silver, platinum and palladium. It has been a recognized export house since 2017.
The case of the Petitioner was that in terms of Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, the Respondent – DGFT was about to issue Advance Authorizations for import of gold bars in order to enable manufacturing of gold jewellery and medallions. It was the case of the Petitioner that between 2015 to 2019, the Petitioner had been granted such authorizations regularly for importing gold bars and export of gold medallions.
On 26th June, 2019, the Petitioner applied for issuance of an Advance Authorization. However, the same was rejected. The Respondent issued Public Notice to the effect 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 mechanised process. ‘
Kishore Kunal, on behalf of the petitioner submitted that the Petitioner’s case could only be processed on the basis of the legal position that existed on the day when the Advance Authorization was sought and was rejected.
He further submitted that, as the public notice was a notice which would apply to the entire industry, and once the same had been quashed, a rejection of the Petitioner’s Advance Authorization on the basis of the said public notice would also not stand.
Ripu Daman Bhardwaj, on behalf of the respondent submitted that, the notification dated 10th August, 2020, the same public notice had been reiterated and therefore the same would be applicable to the Petitioner.
A Single Bench of Justice Prathiba M. Singh quashed the impugned order in view of the legal position in Kanak Exports. The Bench further observed that,
“The Advance Authorization of the Petitioner was applied for on 26th June, 2019 and the same would have to therefore, be considered in terms of the legal position prevalent on the said date. The subsequent notification cannot be applied retrospectively to reject the said Advance Authorization. Under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, it is the settled legal position as held in Kanak Exports (supra), that a retrospective application of a later notification, cannot be made by the Central Government”
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