Despite being contradictory to the World Trade Organisation's (WTO) core objective of freer trade, its rules permits execution of preferential trade agreements (PTAs) provided certain conditions are complied with. WTO mechanism to oversee compliance of these conditions on PTAs is continuously evolving from somewhat tentative approach of earlier General Agreement on Tariffs and Trade (GATT) Panels to more willingness of active judicial interpretation by WTO Dispute Settlement Body (DSB). This article critically analyses the WTO provisions on PTAs taking into account the reports of GATT panels and WTO. It also sheds light on WTO member states views on controversial and hazy issues of the GATT/WTO jurisprudence on PTAs. The article in its concluding part suggests several recommendations designed to ensure greater compliance of the PTAs with rules of the WTO.