Subordinate Legislation Becomes Effective Only From Date Of Publication In Official Gazette : Supreme Court

The Supreme Court on Wednesday (January 21) ruled that subordinate legislation does not become binding unless it is published in the Official Gazette, and it is the date of such Gazette publication, not the mere date of issuance of the notification, which renders it binding

“Once the legislature has prescribed the specified mode of promulgation, the executive cannot introduce an alternative mode and attribute legal consequences to it. 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 To hold otherwise, would permit unpublished delegated legislation to burden citizens, a proposition expressly rejected by this Court in long line of decisions...”, observed a bench of Justices PS Narasimha and Alok Aradhe.

The Court explained the importance of publication in the Official Gazette as follows :

"Delegated legislation, unlike plenary legislation enacted by the Parliament, is framed in the executive chambers without open legislative debate. 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. It is precisely for this reason that courts have consistently insisted that strict compliance with the publication requirements is a condition precedent for the enforceability of delegated legislation."

The Court noted that it has been settled in a long line of precedents that "the true test of the effective commencement of a statutory order or subordinate legislation is whether it has been published in a manner reasonably calculated to bring it to the notice of all persons who may be affected by it, namely, through a mode which is ordinarily and generally accepted for that purpose."

The Case

The appellants-steel importers had entered into contracts with foreign suppliers between 29 January 2016 and 4 February 2016 and opened irrevocable Letters of Credit (LCs) on 5 February 2016. On the same day, the Directorate General of Foreign Trade (DGFT) uploaded an MIP notification on its website, bearing the endorsement “To be published in the Official Gazette.” The notification was eventually published in the Gazette of India on 11 February 2016.

Paragraph 2 of the notification provided exemption to imports under irrevocable LCs opened before “the date of this notification,” subject to Para 1.05(b) of the Foreign Trade Policy (FTP), which protects contracts concluded before the imposition of any new restriction.

The authorities, however, treated 5 February 2016 (the date of website upload) as the “date of notification” and denied exemption to the appellants, contending that their LCs were opened on the same day and therefore did not qualify for protection.

Aggrieved by the Delhi High Court's decision which upheld the Respondent authority's decision to deny them the exemption from the Minimum Import Price (“MIP”), the steel importers moved to the Supreme Court.

Decision

Setting aside the impugned decision, a judgment authored by Justice Aradhe, relying on Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 stated 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.”

Since the appellants had invoked the letter of credit before the date of publication i.e., 11 February 2016, the Court found there was no reason for the Respondent authorities to deny them the benefit of the exemption under the FTP.

“The appellants having opened irrevocable Letters of Credit prior to 11.02.2016 and having complied with procedural requirements under para 1.05(b) of the FTP are clearly entitled to the benefit of transitional provision contained therein.”, the court observed.

Accordingly, the appeal was allowed, entitling the appellants to the protection under the FTP.

Cause Title: VIRAJ IMPEX PVT. LTD. VERSUS UNION OF INDIA & ANR.

Citation : 2026 LiveLaw (SC) 76

Click here to download judgment

Appearance:

For Petitioner(s) :Mr. S. Ganesh, Sr. Adv.(arguing counsel) Mr. Rajesh Rawal, Adv. Mr. Ashwani Kumar, AOR

For Respondent(s) :Mr. N Venkatraman, A.S.G.(NP) Mr. Raj Bahadur Yadav, AOR Mr. Anmol Chandan, Adv. Mr. Priyanka Das, Adv. Mr. Shashank Bajpai, Adv. Mr. V C Bharathi, Adv. (arguing counsel) Mrs. Rajeshwari Shankar, Adv. Mr. G S Makkee Aor, Adv.