2001 (8) TMI 135 - HC - Customs

Customs agent licence renewal after expiry wrongly treated as revocation/suspension; tribunal order set aside for fresh decision.

The dominant issue was whether the customs authorities and the Appellate Tribunal correctly applied the Customs House Agent licensing regulations in ... Non-renewal of the licence - Appellate Tribunal's Order - Customs House Agent Licence (CHA) - exercise of powers u/s 146(2) of the Customs Act, 1962 - non compliance of any obligation specified under Regulation No. 14 - failed to comply with the mandatory Regulation 20(7) - due diligence to ascertain the correctness of information - non-application of mind by the authorities and CEGAT - HELD THAT:- Renewal of a licence means a new licence granted by such act. Its effect is to prevent discontinuance or forfeiture. It means a change of something old for something new. Revocation or suspension essentially relate to a stage when a licence is in force. On the other hand, renewal comes at a stage when the period of currency of the licence is over and its validity is extended. By order dated 15-7-2000, licence was revoked. It is not clear how there could be revocation when the licence itself was not functional after 13-1-2000. Licence can be suspended or revoked on any of the grounds as mentioned in Regulation 21. It is, therefore, clear that if any of the grounds enumerated existed, two courses are open to the Commissioner. The difference in approach for consideration of cases warranting revocation or suspension or non-renewal has to be borne in mind while dealing with individual cases. In a given case the authorities may be of the view that non-renewal of licence for a period of time would be sufficient. That would be in a somewhat similar position to that of suspension of licence though it may not be so in all cases. On the other hand, there may be cases where the authorities may be of the view that licencee does not deserve a renewal either. Position would be different there. Though we have not dealt with the question of proportionality, it is to be noted that the authorities while dealing with the consequences of any action which may give rise to action for suspension, revocation or non-renewal have to keep several aspects in mind. Primarily, the effect of the action vis-a-vis right to carry on trade or profession in the background of Article 19(l)(g) of the Constitution has to be noted. It has also to be borne in mind that the proportionality question is of great significance as action is under a fiscal statute and may ultimately lead to a civil death. We direct the Tribunal to re-hear the matter and decide the issues involved in accordance with law. We make it clear that we have not expressed any opinion on the merits. Issues Involved:1. Validity of the revocation of the petitioner's Customs House Agent (CHA) licence.2. Proper analysis and reasoning by the Central Excise and Gold (Control) Appellate Tribunal (CEGAT).Summary:1. Validity of the Revocation of the Petitioner's CHA Licence:The petitioner held a CHA licence issued u/s 146(2) of the Customs Act, 1962, valid until 13-1-2000. Renewal was denied due to pending enquiries for alleged misconduct, supported by two show cause notices dated 8-11-1995 and 23-8-1999. Regulation 12(2) was cited, which allows renewal only in the absence of misconduct complaints. The first notice alleged that the petitioner's employee, Kanshi Ram Rana, used a falsified identity card to appear in an examination, with the petitioner's knowledge. The second notice accused the petitioner of serious irregularities, including unauthorized business transactions with M/s. Pinks Cargo Agency, failure to advise clients properly, and certifying false documents.The Inquiry Officer found the allegations in the first notice unproven and partially exonerated the petitioner in the second notice. However, the Commissioner of Customs concluded that the petitioner violated Regulation 20 and Regulation 14(e), and sublet their licence in violation of Regulation 13. Consequently, the petitioner's licence was revoked on 15-7-2000.2. Proper Analysis and Reasoning by the CEGAT:The petitioner appealed to the CEGAT, which upheld the Commissioner's order without detailed analysis. The Tribunal's judgment lacked specific findings and merely stated that the Commissioner had correctly analyzed the evidence. The High Court noted that the Tribunal failed to provide reasons, which is essential for transparency and fairness in decision-making. The duty to give reasons ensures rational decision-making and allows affected parties to understand the basis of the decision.The High Court emphasized that non-renewal and revocation are distinct concepts. Revocation implies annulling an active licence, while non-renewal pertains to extending the validity of an expired licence. The Court found it unclear how the licence could be revoked after its expiry on 13-1-2000. The Court directed the Tribunal to re-hear the matter, considering the gravity of the infractions and the proportionality of the punishment.Conclusion:The High Court allowed the writ petition to the extent of directing the Tribunal to re-hear the matter and decide the issues in accordance with the law, without expressing any opinion on the merits.