Section 5 does not authorise retrospective withdrawal of accrued SEIS benefits.

The petitioners provide support services for maritime transport at various ports, including towing services.

Their services were covered under Entries 9(e) and 9(f) of Appendix 3D and Appendix 3E of the Foreign Trade Policy (FTP) 2015–20, and they had claimed benefits under the Service Exports from India Scheme (SEIS) pursuant to Public Notice No. 3/2015-20 dated 1 April 2015.

Notification No. 57/2015-20 dated 31 March 2020 extended the FTP 2015–20 until 31 March 2021 and provided that the eligible service categories and reward rates for services rendered between 1 April 2019 and 31 March 2020 would be separately notified in Appendix 3X.

Subsequently, Notification No. 29/2015-20 dated 23 September 2021 inserted provisions restricting SEIS benefits for FY 2019–20, including a cap of ₹5 crore per Importer Exporter Code and the exclusion of specified services under Appendix 3E.

The petitioners challenged both notifications insofar as they retrospectively withdrew or restricted accrued SEIS benefits for services already rendered and foreign exchange already earned.

1. Whether the Central Government, acting under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, could retrospectively amend the FTP and withdraw or restrict SEIS benefits in respect of services already rendered during FY 2019–20.

2. Whether Notifications No. 57/2015-20 dated 31 March 2020 and No. 29/2015-20 dated 23 September 2021 could operate retrospectively so as to deprive the petitioners of accrued SEIS entitlements.

3. Whether the petitioners were entitled to consequential processing of their SEIS claims and payment of the benefits withheld on account of the retrospective application of the notifications.

The Court applied Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, which authorises the Central Government to formulate, amend and notify the foreign trade policy but does not confer an express power to make amendments retrospectively so as to take away accrued rights.

The Court relied on the Supreme Court’s principles in Asian Food Industries v. Union of India, that a statutory prohibition or amendment under Section 5 generally operates prospectively and cannot divest vested or accrued rights; Viraj Impex v. Union of India, concerning the prospective operation of policy notifications; and Kanak Exports v. Union of India, holding that Section 5 does not empower retrospective amendments that take away accrued duty-credit entitlements, particularly where the beneficiary has already fulfilled the applicable conditions.

The Court further followed its earlier judgment dated 5 February 2026 in Special Civil Application No. 17285 of 2025 and allied matters, which held that a statutory export-benefit scheme could not be retrospectively foreclosed to the prejudice of accrued claims.

The Court found that the petitioners had rendered the relevant services, exported those services and earned foreign exchange during FY 2019–20 under the then-existing SEIS framework.

Although the Government possessed the power to amend or discontinue the scheme prospectively, the notifications could not retrospectively alter the eligibility conditions after the petitioners had completed the relevant transactions and accrued their claims.

Applying Asian Food Industries and Kanak Exports, the Court held that Section 5 did not authorise retrospective delegated legislation that divested accrued SEIS rights.

The insertion of restrictions through Notification No. 29/2015-20, including the exclusion of services under Appendix 3E and the ₹5 crore cap, therefore could not validly operate against services already rendered during FY 2019–20.

The Court accordingly adopted the reasoning of its earlier decision on the analogous issue.

The notifications were held operative only from their respective dates of issuance.

The respondents were directed to give consequential effect to the judgment, process the petitioners’ SEIS applications, permit claims for the period during which the petitioners were prevented from filing them, and pay the admissible benefits within 12 weeks from receipt of a copy of the order.