Gujarat HC Lifts Stay on Polyester Yarn QCO

Ahmedabad | Gujarat — In a major relief to the Central Government, a Division Bench of the Gujarat High Court has set aside the stay imposed on the Centre’s decision to rescind the “Polyester Continuous Filament Fully Drawn Yarn (FDY) Quality Control Order-2023.” The High Court observed that the interim order passed by the single judge failed to record any cogent reasons that would justify staying the implementation of the Central Government’s policy notification.

The Division Bench, comprising Chief Justice Sunita Agarwal and Justice D.N. Ray, allowed the Letters Patent Appeal (LPA) No. 419/2026 filed by the Central Government and quashed the interim order dated April 6, 2026.

The matter pertains to the rescission order issued by the Central Government on November 12, 2025, which revoked the “Polyester Continuous Filament Fully Drawn Yarn (Quality Control Order-2023).” This decision had been challenged by various parties, including Orilon Textex Private Limited, through a Special Civil Application.

In its order, the Division Bench noted that the interim order passed by the single judge did not specify the reasons or legal grounds for staying the Central Government’s policy decision. The Court further remarked that the interim order was effectively tantamount to the final relief sought in the petition, thereby fulfilling the entire objective of the petition at the interim stage itself.

During the hearing, Additional Solicitor General S.D. Sanjay presented arguments on behalf of the Central Government, while senior advocates represented the respondents. The Court also noted that all parties had appeared before the Single Judge and affidavits had been exchanged, yet the order contained no mention of the arguments advanced by the Central Government or the original petitioners.

The Division Bench observed that the “blanket stay” imposed on the Central Government’s policy decision was not legally sustainable; therefore, the Single Judge’s order warranted being set aside on this ground alone.

However, the Court clarified that it had not expressed any opinion on the merits regarding the validity or legality of the policy decision. This issue would remain pending before the Single Judge for adjudication on its merits.

The High Court requested the Single Judge to endeavor to dispose of the matter expeditiously, given that the exchange of affidavits between the parties had already been completed.

The Division Bench further clarified in its order that the rights and contentions of all parties would remain preserved and could be raised during the final hearing. Consequently, the Central Government’s appeal was allowed, and no order was passed regarding costs.