Imposition of fiscal burdens on basis of unpublished notification would erode commercial confidence: Supreme Court

New Delhi: The Supreme Court has said that the imposition of fiscal or trade burdens on the basis of an unpublished notification would erode commercial confidence and offend the rule of law, which the court must steadfastly guard against.

A bench of Justices P S Narasimha and Alok Aradhe said, natural justice requires that before a law can become operative, it must be promulgated or published.

It must be broadcast in some recognisable way so that all men may know what it is, or, at the very least, there must be some special rule or regulation or customary channel by or through which such knowledge can be acquired with exercise of due and reasonable diligence, the court added.

"Law, to bind, must first exist. And to exist, it must be made known in the manner ordained by the legislature,'' the bench said.

In a recent judgment, the court allowed an appeal filed by Viraj Impex Pvt Ltd against the Delhi High Court's judgment of December 21, 2018, which dismissed its writ petition, challenging a notification issued by the central government imposing a Minimum Import Price on certain steel products.

The court said, a notification issued under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 acquired the force of law only upon its publication in the official gazette and the expression ‘date of this notification’ must necessarily mean the date of such publication.

On February 05, 2016, the Directorate General of Foreign Trade uploaded the notification on its website, introducing minimum import price for specified steel products. The uploaded document contained an endorsement ‘To be published in the Official Gazette of India’. Admittedly, the notification was published in the official gazette on February 11, 2016.

The appellants, on February 08, 2016, applied for registration of their Letters of Credit under transitional protection contemplated by para 1.05(b) of the Foreign Trade Policy.

They contended the 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.

Allowing their plea, the bench said, 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 a long line of decisions,'' the bench said.

The court held that the notification could not have acquired the force of law prior to its publication in the official gazette on February 11, 2016.