Statutory export restrictions need official notification; a press release is invalid, but the later cotton yarn ban was upheld.

A statutory ban on cotton yarn exports had to be imposed by notification in the Official Gazette; a press release alone could not satisfy the Foreign Trade (Development and Regulation) Act, 1992, so the press release was invalid. The later notification was upheld because it was treated as a Central Government measure, operated prospectively from the relevant trigger point, and was supported by policy considerations and industry notice. Challenges based on authority, retrospectivity, arbitrariness, promissory estoppel, legitimate expectation, and special treatment for a 100% export-oriented unit were rejected, as no vested right to export was shown and judicial restraint applied to the economic policy decision.

---

---

Issues: (i) Whether the Press Release dated 1st December 2010 imposing a ban on export of cotton yarn was ultra vires the Foreign Trade (Development & Regulation) Act, 1992. (ii) Whether the Notification dated 22nd December 2010, as amended, was invalid for want of authority, retrospective operation, arbitrariness, or for being inapplicable to exporters including a 100% export-oriented unit.

Issue (i): Whether the Press Release dated 1st December 2010 imposing a ban on export of cotton yarn was ultra vires the Foreign Trade (Development & Regulation) Act, 1992.

Analysis: A prohibition on export under the statutory scheme had to be brought into force by notification in the Official Gazette. A mere press release could not satisfy the mandatory requirement of Section 5 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992. The later reasoning in the Supreme Court decision on a similar export ban confirmed that a statutory prohibition becomes effective only upon due notification and cannot be treated as operative from the date of a public announcement.

Conclusion: The Press Release was held ultra vires and invalid.

Issue (ii): Whether the Notification dated 22nd December 2010, as amended, was invalid for want of authority, retrospective operation, arbitrariness, or for being inapplicable to exporters including a 100% export-oriented unit.

Analysis: The notification was treated as having been issued by the Central Government through the Department of Commerce, and not by the DGFT merely because it bore the DGFT's signature. The Court held that the notification could operate prospectively from the date the export cap was reached, and that the transitional arrangements in the foreign trade policy did not confer an absolute vested right to export after the restriction came into force. The challenge based on promissory estoppel and legitimate expectation failed because the industry had advance notice of the impending restriction, and the policy decision was supported by the Cotton Yarn Advisory Board's recommendations. The Court also declined to strike down the policy as arbitrary or unreasonable, applying judicial restraint in matters of economic regulation. As regards the 100% export-oriented unit, the Court held that although the impact on it might be greater, that did not justify interference with the policy decision.

Conclusion: The Notification, as amended, was upheld and the related challenges were rejected.

Final Conclusion: The petitions failed in their challenge to both the announcement and the formal restriction on cotton yarn exports, and the export restriction was sustained against all petitioners.

Ratio Decidendi: A statutory export restriction must be imposed by the competent government through official notification, and a policy-based foreign trade restriction will be upheld where it is supported by public interest, is not shown to be arbitrary or mala fide, and does not defeat any vested or accrued right protected by the governing policy.

---