Court declares retrospective amendment to Target Plus Scheme ultravires, quashes notification.

The Court held that the notification dated 12.06.2006, which retrospectively amended the Target Plus Scheme under the Foreign Trade (Development and Regulation) Act, 1992, was ultravires the Act and the Constitution. The Court quashed the notification, allowing the petitioners to receive duty credit entitlement certificates without retrospective impact, in line with the principle of promissory estoppel and a precedent set by the Gujarat High Court.

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Issues involved: Challenge to notification dated 12.06.2006 u/s 5 of the Foreign Trade (Development and Regulation) Act, 1992 for retrospective effect in amending the Target Plus Scheme.

Details of the Judgment:

Challenge to Notification: The petitioner challenged the notification dated 12.06.2006, issued by the Directorate General of Foreign Trade, for giving retrospective effect to the amendment made in the Target Plus Scheme u/s 5 of the Act, 1992. The petitioner sought a writ declaring the notification ultravires the Act and the Constitution, citing violation of Articles 14 and 19(1)(g) of the Constitution due to withdrawal of benefits with retrospective effect.

Background of the Scheme: The petitioner, engaged in manufacturing and export of goods, had received a Certificate of Recognition as Trading House for its export activities. The Ministry of Commerce had launched the Target Plus Scheme in 2004 under the Foreign Trade Policy to incentivize export growth, rewarding Star Export Houses based on incremental export percentages.

Abolishment of Scheme: The Ministry, through a notification dated 31.03.2006, abolished the Target Plus Scheme from 1.4.2006 onwards, affecting entitlements for duty credit. The petitioner accepted this decision and adjusted its operations accordingly. However, a subsequent notification on 12.06.2006 amended the Scheme retrospectively for exports from 01.04.2005, leading to the present challenge.

Legal Argument: The petitioner contended that the Central Government, u/s 5 of the Act, can formulate and amend export policies prospectively, not retrospectively, invoking the principle of promissory estoppel. The petitioner had relied on a Gujarat High Court judgment setting aside a similar notification retrospectively, which the present Court found applicable to this case as well.

Court Decision: After considering arguments and the Gujarat High Court judgment, the Court held the notification dated 12.06.2006 ultravires the Act, 1992 for giving retrospective effect. The Court quashed the notification and declared the petitioners entitled to duty credit entitlement certificate, if eligible, without retrospective impact.

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