Proportionality in customs licensing penalties: licence revocation set aside, while irregular G Card and H Card cancellation was sustained.

Revocation of a customs house agent licence and forfeiture of security were found disproportionate where the inquiry showed carelessness and negligence but no revenue loss, no mala fide intent, and an unrebutted commercial explanation for the irregularity; that action was set aside. Cancellation of the G Card and H Card was sustained because the record showed irregular procurement and use of the cards, including one card being unlawfully obtained by projecting employment with the concern. The restoration of the licence was therefore limited, while the adverse action concerning the cards remained in force. The controlling principle applied was proportionality in imposing severe fiscal penalties affecting the right to carry on trade or profession.

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Issues: (i) whether revocation of the customs house agent licence and forfeiture of security were justified; (ii) whether cancellation of the G Card and H Card was justified.

Issue (i): whether revocation of the customs house agent licence and forfeiture of security were justified.

Analysis: The inquiry recorded carelessness and negligence, but also found no allegation of loss of revenue and no material showing mala fide intent. The transaction was treated as commercial in nature, and the explanation offered for the irregularity was not effectively rebutted. Revocation of a licence under the customs house agent regime, being a serious fiscal consequence, must be proportionate to the gravity of the infraction and is not warranted for every lapse.

Conclusion: The revocation of the customs house agent licence and forfeiture of security were not justified and were set aside.

Issue (ii): whether cancellation of the G Card and H Card was justified.

Analysis: The record showed that the concerned persons had obtained and used the cards in an irregular manner, and one of them was himself a card holder and proprietor while the other had unlawfully obtained the H Card by projecting himself as an employee of the appellant concern. The lapse was treated as serious enough to sustain the action taken against the cards.

Conclusion: The cancellation of the G Card and H Card was upheld.

Final Conclusion: The challenge succeeded only to the extent of restoration of the customs house agent licence, while the adverse action relating to the G Card and H Card remained in force.

Ratio Decidendi: Revocation of a customs house agent licence, as a severe fiscal penalty affecting the right to carry on trade or profession, must be reserved for serious infractions and must satisfy the test of proportionality.

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