A single judge bench presided by Justice Suresh Kait sought a response from the Centre and posted the matter for hearing on August 23.
Senior advocate Maninder Singh, who appeared for Goyal, argued that the Look Out Circular was illegal as it was not issued under any law enacted by Parliament.
Additional Solicitor General Maninder Acharya told the court that serious frauds amounting to Rs 18,000 crore were being investigated against Goyal.
Citing the reasons for his visit abroad, Goyal's counsel told that court that he needed to explore financial options for the airlines which is facing a serious financial crunch.
Singh said that Goyal was an NRI and a resident of Dubai and hence he needed to go back to the UAE before July 10. Else, his residential rights would be revoked.
Singh said that till the time he filed the petition in the court, there was no case against Goyal. But on July 6, when the matter came up for hearing, he received summons from SFIO to appear before it on July 10 to join the investigation.
Earlier on July 5, Justice Vibhu Bakhru recused himself from hearing the case.
On May 25, Goyal and his wife Anita Goyal were stopped from leaving the country by immigration authorities at Mumbai airport.
( With inputs from IANS )