Court emphasizes discretionary power in license renewal decisions; petitioners granted hearing if renewal refused.

The court dismissed the argument for automatic license renewal, emphasizing the authority's discretionary power to grant or refuse renewal based on relevant factors. As the licenses had expired, the cancellation challenge became moot. The court directed the respondents to process the renewal application with an open mind, allowing the petitioners a hearing if renewal is refused. The petitioners were permitted to continue business for goods removal during the renewal process. The court highlighted the need for a conscious and reasoned approach in license renewal decisions, emphasizing the discretionary nature of the process.

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Issues:
Challenge to show cause notice and circular for cancellation of licenses, renewal of license, discretionary power of licensing authority, application for renewal, automatic renewal process, disposal of renewal application, continuation of business during renewal process.

Analysis:
The writ petition challenged a show cause notice and circular seeking cancellation of licenses. The petitioners argued that the reasons for proposed cancellation were unclear, and the Customs Authority's affidavit was unsatisfactory. However, it was revealed that the licenses had expired, rendering the cancellation moot. The focus then shifted to the renewal of the license under Section 58 of the Customs Act, with the petitioners contending that renewal should be automatic upon application two months before expiry. The court disagreed, emphasizing the discretionary power of the authority to grant or refuse renewal based on a conscious consideration of relevant factors.

The judgment clarified that the renewal of a license is not a mechanical process but requires the licensing authority to apply its mind and make a reasoned decision. The court dismissed the argument for automatic renewal upon application, stating that the power to grant a license includes the power to refuse renewal. As the writ petition had become infructious due to license expiration, the court directed the respondents to process the renewal application with an open mind, providing the petitioners an opportunity for hearing. The licensing authority was instructed to issue a reasoned order if they decide against renewal within two months.

During the renewal process, the petitioners were permitted to continue business solely for the removal of goods from the Bonded Warehouse. The respondents were prohibited from refusing renewal based on the circular but retained the right to proceed independently. The writ petition was disposed of without costs, with the judgment dated 7th February 1986, emphasizing the importance of a conscious and reasoned approach in license renewal decisions.

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