API Schema Design: Throw exception versus return error status?

Consider API is implemented in REST.

I would like to avoid using http_status_code 2xx,3xx,4xx,5xx; simply to understand which is better between exception and status values.

Approach-1] Throw Exception

• IllegalArgumentException
• DependentServiceTimeoutException
• UnauthorizedOperationException

Approach-2] Return Status

• OK
• INVALID_PARAMETER
• DEPENDENCY_FAILURE

Which is better approach in terms of design principles and best practices?