Summary
The Court upheld notifications restricting imports of peas and pulses and the related DGFT trade notices. Section 9A’s safeguard mechanism did not displace the Central Government’s power under Section 3(2) of the FTDR Act to impose import quotas. Article XI of GATT-1994 had not been incorporated into domestic law through those provisions. The actual-user requirement followed the Foreign Trade Policy, and the quota meant aggregate imports rather than an allowance for each licensee. Imports made under interim orders remained subject to Customs Act consequences; statutory appeals concerning import-export codes were left open.
Issues
- Whether Section 9A exclusively governed quantitative import restrictions and curtailed Section 3(2).
- Whether the notifications and DGFT’s actual-user licensing procedure exceeded statutory authority or imposed an ambiguous quota.
- Whether importers relying on interim orders were entitled to protection from legal consequences.
Provisions considered
- Sections 3 and 9A, Foreign Trade (Development and Regulation) Act, 1992Held that the safeguard mechanism in Section 9A did not displace Section 3(2)’s power to restrict imports; the impugned notifications were valid under Section 3(2). (¶¶ 49, 54, 55, 56, 58, 59, 60, 61, 62, 64)
- Sections 5 and 18A, Foreign Trade (Development and Regulation) Act, 1992Considered the power to formulate foreign-trade policy and harmonised Section 3(4) with the continued application of other laws. (¶¶ 55, 56)
- Rule 4, Foreign Trade (Regulation) Rules, 1993Applied the licensing requirement to goods moved into the restricted category. (¶¶ 18, 19)
- Paragraphs 2.04, 2.08, 2.10 and 9.03, Foreign Trade Policy, 2015–2020Held that DGFT implemented the policy’s existing actual-user requirement rather than introducing an unauthorised new restriction. (¶¶ 18, 19, 20)
- Rules 2(f), 5, 8 and 9, Safeguard Measures (Quantitative Restrictions) Rules, 2012Examined the distinct safeguard regime requiring increased imports, serious injury or its threat and a causal link, without treating it as exhaustive of Section 3(2). (¶¶ 50, 58, 59, 60)
Held
- The notifications represented the Central Government’s decisions; DGFT performed the ministerial act of publication. The prescribed “total quantity” was an aggregate commodity quota, not a separate allowance for every licensee. (¶¶ 15, 17)
- For restricted goods requiring authorisation, the policy’s actual-user condition applied by default unless DGFT dispensed with or diluted it. Inviting applications from millers or refiners implemented that condition; the trader-petitioners neither claimed actual-user status nor applied for licences. (¶¶ 18, 19, 20)
- Treaty obligations do not acquire domestic statutory force merely through ratification. Treaty-consistent interpretation remains relevant within legitimate limits, especially for implementing legislation, but Article XI of GATT-1994 had not been transformed into domestic law by the FTDR Act. (¶¶ 34, 35, 36, 37, 38, 39, 40, 44, 45, 46, 56, 63)
- Section 9A incorporated a safeguard mechanism associated with Article XIX, but neither incorporated Article XI’s general restriction nor exhausted the Central Government’s power under Section 3(2). Its enactment therefore did not invalidate these import restrictions. The ruling did not determine India’s international obligations under GATT-1994. (¶¶ 54, 56, 57, 58, 59, 60, 61, 62, 64)
- Importers who obtained interim orders despite earlier High Court decisions upholding restrictions could not claim the bona fide protection sought. Imports made in reliance on those interim orders were contrary to the notifications and trade notices and were to be dealt with under the Customs Act. Statutory appeals over suspension or termination of import-export codes remained undecided and were to proceed according to law. (¶¶ 65, 66, 67)
Result
Notifications and trade notices upheld. The transferred writ petitions and intervenors’ writ petitions were dismissed, subject to the express reservation regarding statutory appeals over import-export codes. Pending applications disposed of; no order as to costs.