HC Says No Retrospective Withdrawal of Export Benefits; TMA Incentives Restored for Chilli Exporters

The Chillies Exporters Association challenged a DGFT order dated 19 March 2024, which had rejected their request to grant incentives under the Revised Transport and Marketing Assistance (TMA) Scheme. The Association also sought to invalidate the Central Government’s notification dated 25 March 2022, which foreclosed the TMA Scheme and withdrew the earlier notification dated 09 September 2021. The Scheme, initially launched in 2019 and periodically extended, had lapsed on 31 March 2021. A fresh notification dated 09 September 2021 revived the Scheme and made it applicable to exports from 01 April 2021 to 31 March 2022. However, the 2022 notification abruptly withdrew it before the end of the period.

The Association challenged, saying the Government had no authority under Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992, to issue notifications with retrospective effect, and exporters acquired vested rights during the Scheme period. The matter reached the High Court after the DGFT rejected the Association’s representation based upon earlier court directions.

Issue Raised: Whether the Central Government could retrospectively withdraw or modify the TMA Scheme under Sections 3 and 5 of the FTDR Act, and whether chilli exporters had accrued a right to claim incentives for exports made between 01 April 2021 and 08 September 2021.

HC Held: The High Court held that neither Section 3 nor Section 5 of the FTDR Act empowers the Central Government to issue notifications or subordinate legislation with retrospective effect. Relying upon SC’s ruling in Kanak Exports, the Court reaffirmed that delegated legislation is inherently prospective unless the parent statute expressly authorises retrospective operation. The Court declared that the 09 September 2021 notification could not operate retrospectively, and therefore, no rights had accrued to exporters for the period 01 April 2021 to 08 September 2021.

However, the Court also held that for exports made on and after 09 September 2021 until 24 March 2022, the exporters were entitled to the benefits under the TMA Scheme, provided they met eligibility conditions. The writ petition was thus partly allowed, with exporters permitted to claim incentives for this limited period.

To Read Full Judgment, Download PDF Given Below