Customs house agent licensing cannot be restricted by an assessed quota; eligible applicants must be considered annually.

Section 146(2) of the Customs Act, 1962 permits regulations for licensing customs house agents, but it does not authorise a quota-based restriction that prevents consideration of otherwise eligible applicants. Regulation 4 of the Customs House Agents Licensing Regulations, 1984, as amended, was analysed with Regulations 5 to 8 and the scheme of annual scrutiny, examination and temporary licensing, together with the Study Committee Report, to support the view that eligibility and bona fides were to be tested each year. Delegated legislation could not narrow the parent statute by treating an assessed sufficiency of existing licence holders as a bar to inviting applications. On that basis, refusal to consider the applications was unsustainable and was quashed.

---

---

Issues: Whether Regulation 4 of the Customs House Agents Licensing Regulations, 1984, as amended, was ultra vires Section 146(2) of the Customs Act, 1962 in so far as it enabled the authority to decide whether applications for temporary customs house agents licences would be invited only on the basis of the number of licences assessed by it, and whether the authority was bound to invite applications every year and consider eligible candidates on merits.

Analysis: Section 146(2) of the Customs Act, 1962 empowers the making of regulations for licensing customs house agents, but does not itself prescribe any restriction based on an assessed quota of licences. Regulation 4, as amended by Notification No. 44/97-Cus. (N.T.) dated 15th September, 1997, substituted the earlier reference to "a licence" with "such number of licences as assessed by him", while Regulations 5, 6, 7 and 8 together provided the process for receiving applications, scrutiny, examination and temporary licensing. Read with the Study Committee Report and the scheme of the regulations, the licensing framework was intended to test eligibility and bona fides annually, not to create a bar against consideration of eligible applicants merely because the existing number of licence holders was considered sufficient. Delegated legislation could not override or narrow the parent statute by introducing a restriction not warranted by Section 146(2).

Conclusion: Regulation 4, to the extent it was used to refuse consideration of applications on the basis of an assessed sufficiency of existing licence holders, was not sustainable. The authority was required to invite applications every year and to adjudge eligible applicants within the regulatory framework. The refusal to consider the petitioners' applications was quashed and the petitioners succeeded.

---