Case Note & Summary
The petitioners, exporters of agricultural products, were beneficiaries of the Transport and Marketing Assistance (TMA) Scheme introduced by the Ministry of Commerce and Industry on 27.02.2019. The scheme aimed to provide financial assistance for international freight and marketing of specified agricultural products to mitigate high transportation costs and promote brand recognition. On 09.09.2021, the government issued a notification extending the scheme. However, on 25.03.2022, the Ministry issued a notification retrospectively withdrawing the scheme by cancelling the 09.09.2021 notification, thereby denying benefits to exporters who had not yet applied but had acted upon the scheme. The petitioners challenged this retrospective withdrawal as arbitrary and violative of their fundamental rights under Articles 14 and 19(1)(g) of the Constitution. The court examined the principles of legitimate expectation and promissory estoppel, noting that the petitioners had relied on the scheme to plan and execute exports, incurring obligations. The court found that the retrospective cancellation created an unreasonable classification between exporters who had already availed benefits and those who had not, without any rational basis. The court held that the government could not resile from its promise after the petitioners had acted to their detriment. The court quashed the Notification dated 25.03.2022 to the extent it retrospectively withdrew the scheme, directing the respondents to consider the petitioners' claims in accordance with the scheme as it stood prior to the impugned notification. The court emphasized that the withdrawal could only be prospective and not retrospective, as it would otherwise defeat the legitimate expectations of the exporters.
Headnote
A) Constitutional Law - Legitimate Expectation - Retrospective Withdrawal of Scheme - The petitioners, beneficiaries of the Transport and Marketing Assistance (TMA) Scheme introduced on 27.02.2019, challenged the Notification dated 25.03.2022 which retrospectively withdrew the scheme by cancelling the Notification dated 09.09.2021. The court held that the retrospective withdrawal was arbitrary and violative of the principles of legitimate expectation and promissory estoppel, as the petitioners had acted upon the scheme and incurred obligations. (Paras 2-10) B) Constitutional Law - Article 14 - Unreasonable Classification - The court found that the classification between exporters who had already availed benefits and those who had not yet applied was unreasonable and not based on any intelligible differentia, thus violating Article 14. The retrospective cancellation created an arbitrary distinction without any rational nexus to the object sought to be achieved. (Paras 8-12) C) Constitutional Law - Article 19(1)(g) - Right to Carry on Business - The court held that the retrospective withdrawal of the TMA Scheme directly affected the petitioners' right to carry on export business, as they had relied on the scheme to plan their exports. The sudden and retrospective cancellation without any notice or opportunity of hearing was held to be an unreasonable restriction on the freedom of trade and commerce. (Paras 10-14) D) Administrative Law - Promissory Estoppel - The court applied the doctrine of promissory estoppel, holding that the government could not resile from its promise of providing transport and marketing assistance under the TMA Scheme after the petitioners had acted upon it to their detriment. The retrospective withdrawal was held to be inequitable and unsustainable. (Paras 6-10)
Issue of Consideration
Whether the retrospective withdrawal of the Transport and Marketing Assistance (TMA) Scheme by Notification dated 25.03.2022, which cancelled the earlier Notification dated 09.09.2021, is arbitrary, unreasonable, and violative of Articles 14 and 19(1)(g) of the Constitution of India.
Final Decision
The court allowed the writ petitions and quashed the Notification dated 25.03.2022 to the extent it retrospectively withdrew the TMA Scheme. The respondents were directed to consider the petitioners' claims for benefits under the scheme as it stood prior to the impugned notification, in accordance with law.
Law Points
- Legitimate expectation
- Promissory estoppel
- Retrospective withdrawal of scheme
- Unreasonable classification
- Article 14
- Article 19(1)(g)
- Transport and Marketing Assistance Scheme
