TaxTMI 
TaxTMI 
2009 (4) TMI 39
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....the Customs and Central Excise Department. 3. In exercise of the powers conferred by sub section (2) of Section 146 of the Customs Act, 1962, the Central Board of Excise and Customs, issued a set of Regulations called "Customs House Agents Licensing Regulations 1984". The scheme of these Regulations, was as follows:- (a) Under Regulation-4, the Commissioner was empowered to invite applications for the grant of such number of licences, as assessed by him to act as Customs House Agents in the month of January every year. This invitation should be by means of a notice affixed on the Notice Board of each Customs Station as well as through publication in at least two newspapers having circulation in the area of his jurisdiction. The application should be for clearance work within the jurisdiction of the Commissioner. (b) Under Regulation-5, an application for licence should be made in Form-A and should contain the details prescribed therein. (c) Regulation-6 prescribed the conditions to be fulfilled by the applicants. As per this Regulation, an applicant should - (i) be a graduate from a recognised University; (ii) be an employee of a licensee; (iii) possess a....
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.... in the work of clearance of goods through Customs on behalf of a licensee. (l) Regulation-19 imposed an obligation upon the licensee to maintain accounts and Regulation-20 enabled a licensee to employ persons to assist him. (m) Regulation-21 dealt with suspension or revocation of licence and Regulation-22 empowered the Commissioner to prohibit an agent from working in one or more sections of the Customs Stations. Regulation-23 provided the procedure for suspending or revoking a licence. (n) Regulations-24 and 25 dealt with accommodation and clearance charges. (o) Regulation-26 repealed the 1965 Regulations, but at the same time, saved the acts done in pursuance of the 1965 Regulations. 4. The petitioners in all these writ petitions are engaged in the work of clearance of goods through Customs. All the petitioners have also cleared the qualifying examination prescribed under Regulation-9 long ago. But unfortunately, the Commissionerates in Tamil Nadu did not invite applications for the grant of licences under Regulation-4, nor did they issue temporary licences under Regulation-8, in the past nearly two decades. Therefore, despite getting qualified several years ago i....
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....nsion and revocation of licence and Regulation-21 deals with the power of the Commissioner to prohibit an agent from working in any section. (m) Regulation-22 deals with the procedure for suspending or revoking the licence. (n) Regulation-23 speaks about accommodation. 6. After the issue of the new set of Regulations in 2004, clarifications were sought from the Central Board of Excise and Customs, by the Commissionerates, regarding various issues. By a Circular No.42/2004, dated 10.6.2004, the Central Board issued clarifications on all the issues, one of which is relevant for our present purpose. It is as follows:- Question:-Can persons who have qualified in the exam under Regulation-9 of CHALR 1984 be exempted from appearing in the exam referred to in Regulation-8 of CHALR 2004 and be granted licence under Regulation-9(1) of CHALR 2004 directly? Answer:- No. Those who have not been granted licence under CHALR 1984 till 23.2.2004 lose their right. They have to meet the qualifications and pass the examinations under Regulation-8 of CHALR 2004. 7. Following the issue of the Regulations of 2004 and the issue of the aforesaid clarifications, the Commissioner of Custom....
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.... In support of this contention, the learned Senior Counsel relied upon the decision of the Supreme Court in Glaxo Smith Kline vs. Controller of Patents and Designs {2008 (4) R.A.J. 284}. The learned Senior Counsel also produced the text of the judgment of the Court of Appeal in Chief Adjudication Officer vs. Maguire {1999 (2) All E.R. 859}, which was quoted with approval by the Apex Court in the above decision. 11. Mr.K.Ravi Anantha Padmanaban, learned Standing Counsel for the Department, submitted that the decision of the Delhi High Court which was followed by the High Court of Punjab and Haryana, arose out of a challenge to the new set of Regulations, by persons who applied in response to notices issued under Regulation-4 of the old Regulations, but on whose applications no decision was taken by the respective Commissionerates. Therefore, the learned Standing Counsel submitted that the petitioners in the present batch of cases, cannot claim similar benefits, since the respondents never issued any notice inviting applications under the old Regulations. Hence no right was created in favour of the petitioners. The learned Standing Counsel relied upon the decision of the Supreme C....
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.... a licence and directing the respondents to consider the case of the petitioner in accordance with law. The Division Bench did not say that the application of the petitioner therein should be considered in accordance with 1984 Regulations. 14. The petitioners assail the new 2004 Regulations and the public notice dated 31.12.2008, mainly on the ground that by passing the qualifying examination under the 1984 Regulations and waiting in the wings for the past more than a decade for the grant of licences, they had acquired a right, which cannot be taken away without due process. The petitioners claim that they had the legitimate expectation of getting licences and that the same has been belied. Since the syllabus for the examination under both the Regulations is one and the same except an addition of two subjects and also since the preamble to the new Regulations, saves even actions omitted to be taken, the petitioners claim that they are entitled to be considered for the grant of licences even under the new Regulations without being forced to write the examinations all over again. 15. At the outset, I am unable to accept the contention that the petitioners had acquired either a ....
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....hoate or vested. 18. Similarly, it is also pretty difficult to accept the claim that the petitioners had a legitimate expectation that they would be issued with licences under the old Regulations. Even in a case where an amendment to the Service Rules was issued, half way through a process of selection to the post of Inspectors in the Department of Weights and Measures in the State of Madhya Pradesh, the Supreme Court held in State of M.P. vs. Raghuveer Singh Yadav {1994 (6) SCC 151} that the legitimate expectation of candidates who had applied and succeeded in the written examination, was confined only to a consideration under the unamended Rules and that the Government was entitled to make final recruitment in accordance with the amended Rules. Similarly, in P.T.R. Exports (Madras) Pvt. Ltd vs. Union of India {1996 (5) SCC 268}, the Apex Court was concerned with the abolition of a particular system of Export Policy known as "Non-quota Exporters Entitlement", and the introduction of the new Export Policy on Agreement on Textile and Clothing. The Exporters of garments challenged the new policy on the ground that they had made huge capital investments, on an expectation that they....
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.... inviting applications for the grant of licences. Admittedly, the last notification inviting applications, was issued only in 1998. Regulation-4 of the 1984 Regulations requires the Commissioner to issue notifications inviting applications, in the month of January every year. But the Commissioner did not issue any notification after 1998. Therefore the only consistent past practice adopted by the respondents, is not to invite applications and not to issue licences. With the respondents, consistently avoiding the issue of licences over the past more than a decade under the old Regulations, I fail to understand how any kind of expectation, much less legitimate expectation, would have arisen. 22. In Ram Pravesh Singh vs. State of Bihar {2006 (8) SCC 381}, the Supreme Court pointed out that "as a ground for relief, the efficacy of the doctrine (of legitimate expectation) is rather weak as its slot is just above fairness in action but far below promissory estoppel". It was further held therein as follows:- "Legitimate expectation is not a legal right. It is an expectation of a benefit, relief or remedy, that may ordinarily flow from a promise or established practice. T....
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....recent trend towards "doctrine of balancing". 25. In Official Liquidator vs. Dayanand {2008 (10) SCC 1}, a Three Member Bench of the Supreme Court pointed out that "at the root of the principle of legitimate expectation, is the constitutional principle of rule of law, which requires regularity, predictability and certainty in Government's dealings with the public". Applying these yardsticks, it is easy to realise that in the absence of any notification inviting applications for the grant of licences in the past more than 10 years, the petitioners could not have had any expectation, since the issues of regularity, predictability and certainty did not arise at all. 26. In Sunil Kohli vs. Union of India {2006 (195) ELT 15}, the learned Judge of the Delhi High Court granted relief to persons similarly situated like the petitioners herein, primarily on the basis of the doctrine of legitimate expectation. A Division Bench of the Punjab and Haryana High Court followed the judgment of the Delhi High Court, without going into detail as to how the doctrine would apply. Both these High Courts, with great respect to the learned Judges, have not taken into account the parameters such as (....
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..... vs. Hazarilal {2008 (3) SCC 273}, that today the legal parameters of judicial review have undergone a change and that the Wednesbury principle of reasonableness has been replaced by the doctrine of proportionality. 30. Neither the doctrine of proportionality nor even the "strict scrutiny test" to which there is a shift by the English Courts, can be invoked in the present case, to hold that the action of the respondents is illegal or arbitrary. The 1984 Regulations contemplated the grant of licences to persons who satisfied the conditions prescribed thereunder, to act as Customs House Agents. Though Regulation-4 required the Commissioner to invite applications year after year in the month of January, an element of discretion was conferred upon the Commissioner to determine the number of licences to be issued every year. This is clear from the first part of Regulation-4 which reads as follows:- "The Commissioner may invite applications for the grant of such number of licences as assessed by him ....." The words "may" and "such number of licences" used in Regulation-4 steers clear of any doubt that one may entertain about the discretion conferred upon the Commissioner....
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.... 2004 Regulations. Since the failure of the Commissioner to invite applications for the grant of licences, year after year, under the old Regulation-4, falls under the category of things "omitted to be done", the petitioners contend that their rights are saved by the preamble. 34. But the above contention of the petitioners cannot be countenanced. The Regulations of the year 1984 contemplated various things to be done by the Commissioners, including inviting applications for the grant of licences, grant of temporary licences, grant of regular licences, conduct of examinations, enforcement of obligations of the licensees, scrutiny and inspection of accounts of the licensees, suspension and revocation of licences and the fixing of clearance charges to which a Customs House Agent may be entitled. If, before the issue of the Regulations of the year 2004, the Commissioner had already issued a licence (under Regulation-10) or revoked or suspended the licence (under Regulation-21) or fixed clearance charges (under Regulation-25), such acts would fall under the category of "things done", in terms of the preamble to the 2004 Regulations. Similarly, if the Commissioner had issued a notice....
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....ed, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act of Regulation had not been passed." 37. One need not take recourse to Section 6 of the General Clauses Act, for solving the riddle on hand. By an amendment introduced under Section 113 of the Finance Act, 2001, Section 159-A was inserted into the Customs Act, 1962, which reads as follows:- "Section 159-A. Effect of amendments, etc., of rules, regulations, notifications or orders. - Where any rule, regulation, notification or order made or issued under this Act or any notification or order issued under such rule or regulation, is amended, repealed, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not - (a) revive anything not in force or existing at the time at which the amendment, repeal, supersession or rescinding takes effect; or (b) affect the previous operation of any rule, regulation, notification or order so amended, repealed, superseded or rescinded or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued....
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.... right, privilege, obligation, liability, penalty or forfeiture. 40. Applying the above principles to the cases on hand, it can be seen without any semblance of a doubt that the petitioners did not acquire any right or privilege under the Repealed Regulations of 1984. Therefore, there is no scope for invoking Section 6 of the General Clauses Act. In Glaxo Smith Kline case, relied upon by Mr.R.Yashod Vardhan, learned Senior Counsel, an application for the grant of Patent and an application for the grant of "Exclusive Marketing Right" were filed under the Patents Act, 1970. The applications were rejected by the Controller of Patents on 28.12.2004 and the Amendment Act, 2005, came into operation on 1.1.2005. When the rejection of the application by the Controller was challenged, a question of maintainability was raised on the basis of the Amendment Act, 2005. The objection was upheld by the High Court. It is in such circumstances that the Supreme Court applied the principles underlying Section 6 of the General Clauses Act. In other words, a series of actions had been taken under the Repealed Act and the question before the Court was about the fate of such actions, in the light of t....