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SCA/6151/2010 64/ 64 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 6151 of 2010
with
CIVIL
APPLICATION NO.5891 OF 2010
AND
SPECIAL
CIVIL APPLICATION NO.6152 of 2010
with
CIVIL
APPLICATION NO.5892 OF 2010
AND
SPECIAL
CIVIL APPLICATION NOS.6916 TO 6922 OF 2010
with
SPECIAL
CIVIL APPLICATION NOS.7770 to 7772 of 2010
For
Approval and Signature:
HONOURABLE
MR.JUSTICE D.A.MEHTA
HONOURABLE
MS.JUSTICE H.N.DEVANI
=========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
YES
2
To
be referred to the Reporter or not ? YES
3
Whether
their Lordships wish to see the fair copy of the judgment ?
NO
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ? NO
5
Whether
it is to be circulated to the civil judge ? NO
=========================================
RAVINDRA
K JOSHI - Petitioner(s)
Versus
UNION
OF INDIA THROUGH UNDER SECRETARY & 2 - Respondent(s)
=========================================
Appearance :
MR
KS NANAVATI, Sr. Advocate for NANAVATI ASSOCIATES
for Petitioner
MR RM
CHHAYA for Respondent(s) : 1 -
3.
=========================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 01/10/2010
CAV
JUDGMENT
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
All
these petitions have been filed with the following identically
worded prayers:
“[A] Your
Lordships may be pleased to issue a writ of certiorari or a writ in
the name of certiorari or any other writ, order or direction quashing
and setting aside Notification dated 8.4.2010 in so far as it
purports to require the petitioner to mandatorily appear in the
specific examination for the purpose of grant of licence;
[B] Your
Lordships may be pleased to direct the respondent No.3 to exercise
his power under CHALR 1984 and dispose of the pending applications of
the petitioner for grant of licence;
[C] That
pending the hearing and disposal of the present petition, Your
Lordships may be pleased to stay the operation and implementation of
Notification dated 8.4.2010 and public notice fixing date for
examination dated 22.4.2010;
[D] An
ex-parte ad-interim relief in terms of [C] may kindly be granted;
[E] Such
other and further reliefs as may be deemed just and proper may kindly
be granted.”
Since
facts involved in all these petitions are more or less similar and
the same involve common questions of law, all the petitions were
heard together and are disposed of by this common judgement. For the
sake of convenience, Special Civil Application No.6152 of 2010 is
treated as the lead petition and reference is made to the facts as
appearing in the said petition.
Before
adverting to the facts of the present case, it may be necessary to
refer to certain statutory provisions so as to understand the facts
in proper perspective.
Section
146 of the Customs Act, 1962 reads thus:
146.
Customs house agents to be licensed.–(1) No person
shall carry on business as an agent relating to the entry or
departure of a conveyance or the import or export of goods at any
customs station unless such person holds a licence granted in this
behalf in accordance with the regulations.
(2)
The Board may make regulations for the purpose of carrying out the
provisions of this section and, in particular, such regulations may
provide for–
(a)
the authority by which a licence may be granted under this section
and the period of validity of any such licence;
(b)
the form of the licence and the fees payable therefor;
(c)
the qualifications of persons who may apply for a licence and the
qualifications of persons to be employed by a licensee to assist him
in his work as an agent;
(d)
the restrictions and conditions (including the furnishing of security
by the licensee) subject to which a licence may be granted;
(e)
the circumstances in which a licence may be suspended or revoked; and
(f)
the appeals, if any, against an order of suspension or revocation of
a licence and the period within which such appeals shall be filed.
In
the exercise of powers under clause (c) of sub-section (2) of
section 146, the Central Board of Excise and Customs (Board)
originally framed Regulations being Customs House Agent Licensing
Regulations, 1984 (the CHALR, 1984).
The
Regulations, which are relevant for purpose of the present petition,
are reproduced hereunder:
“[2(c)] “Customs
House Agent” means a person licensed under these regulations to
act as agent for the transaction of any business relating to the
entry or departure of conveyances or the import or export of goods at
any customs station.
[4] Invitation
of application: The Commissioner may 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 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 specifying therein in the
last date of receipt of application. Such application shall be for
clearance work within the jurisdiction of the said Commissioner.
[6]
Conditions to be fulfilled by the
applicant. – The applicant
or the person referred to in clause (b) of sub-regulations (2) and
(3) of Regulation 5 as the case may be, shall prove to the
satisfaction of the Commissioner that:
(a)
the applicant is a graduate from a recognised University and is an
employee of a licensee and that the possessed a permanent pass in
Form G prescribed under regulation 20 and has the experience of work
relating to clearance of goods through the Customs, for a period of
not less than three years in the capacity of such a pass-holder:
Provided
that the Commissioner may relax the possession of permanent pass in
Form G to one year for reasons to be recorded in writing.
(b)
the applicant has financial viability supported by a certificate
issued by a Scheduled Bank or such other proof acceptable to the
Commissioner evidencing possession of assets of the value of not less
than Rs.1 lakh in the case of applicants for the grant of licence in
respect of any one of the Customs Stations at Bombay, Calcutta,
Madras, Cochin, Kandla, Goa, Mangalore, Tuticorin or Visakhapatnam
and not less than Rs.50,000/- in the case of each of the other
Customs Station, situated at places other than those specified above
:
Provided
that in cases where a Commissioner’s jurisdiction extends to
more than one Customs Station, the Commissioner may issue one licence
for all the Stations or more that
one such Station to be specified in the licence, waiving the need for
separate compliance of the provisions of clauses (a) and (b) above
for such additional Customs Stations. The Commissioner may also
waive the need for separate compliance of the requirement of
Regulation 11 in such cases:
Provided
further that in places where there is more than one Commissioner
exercising jurisdiction over different Customs Stations and Custom
House Agents licensed under the Custom House Agents Licensing
Regulation 8 from the Commissioner, other that the one who has issued
them the existing licence, without being required to comply with the
requirements of Regulation 6 in regard to financial viability or the
requirements as to fresh deposit in terms of Regulation 11.
7. Scrutiny
of applications for licence.- On
receipt of application under Regulation 5, the Commissioner may make
enquiries for verification of the particulars set out in the
application and also such other enquiries as he may deem necessary
including enquiries about the reliability of financial status of the
applicant.
8.
Grant of temporary licence.-(1)
Any applicant whose application is received within the last date
specified in Regulation 4 and who satisfies the requirements of
Regulation 5 and 6 , shall be permitted to operate as Custom House
Agent at the Customs Station for which the applications made
initially for the period of one year against temporary licence
granted by the Commissioner in this regard in Form B.
Provided
that when evidence is produced to the Commissioner that the applicant
has already availed of two chances for qualifying in the written or
oral examination prescribed in these regulations and would like to
avail of the third chance as soon as the next examination is held in
terms of Regulation 9 and that the applicant has been able to account
for the minimum volume of work prescribed for such agents in the
course of one year’s working, the Commissioner may extend the
aforesaid period of one year for which the temporary licence has been
granted by another six months or such further
period not exceeding one year to enable the applicant to avail of the
third chance for qualifying in the examination in terms of Regulation
9. While granting such extension, the Commissioner of Customs shall
satisfy himself that the requirements of Regulations 10(1) (a) and
10(1)(b) had been fully met by the applicant.
(2)
Any person, whose application for grant of temporary licence under
sub-regulation (1) of regulation 8 is rejected by the Commissioner of
Customs may represent to the Chief Commissioner of Customs or Chief
Commissioner of Customs and Central Excise, as the case may be
against such order rejecting the grant of a temporary licence, within
30 days of the communication of the impugned order.
(3)
In case the number of applicants fulfilling the conditions prescribed
under regulation 6 is more than the number of licences to be issued
as assessed under regulation 4, the Commissioner may adopt seniority
in experience as ‘G’ pass holder of such applicants as
the criterion to give precedence to the applicants:
Provided
that if more than one applicant has the same period of experience,
the applicant who is older in age shall get precedence.
Examination
of the applicant. – (1)
The holder of a temporary licence in the case of an individual and
the person or persons who will be actually engaged in the work of
clearance of goods through customs on behalf of the firm or company
holding a temporary licence, as the case may be, shall be required
to qualify in examination, at the earliest opportunity. Such
person or persons shall be eligible to appear in the examination as
soon as a temporary licence is granted and shall be permitted to
avail of three chances within a period of 2 years from the date of
issue of the temporary licence of payment of prescribed examination
fee of (Rs.500/-) for each examination.
(2)
The examination referred to in sub-regulation (1) shall include a
written and oral examination and will be conducted
twice every year. Each applicant would be permitted to avail of a
maximum of three chances to qualify in the said examination but all
such chances should be availed of within a maximum period of 2 years
from the date of grant of temporary licence.
(Explanation:
A person who qualifies in the written examination, but fails in the
oral test linked to it, shall be treated as having failed in that
chance; but he will not be required to appear in the written
examination in the subsequent chances.)
(3)
The examination may include questions on the following:-
(a)
preparation of various kinds of bills of entry and shipping bills;
(b) arrival
entry and clearance of vessels;
(c)
tariff classification and rates of duty;
(d)
determination of value of assessment;
(e)
conversion of currency;
(f)
nature and description of documents to be filed with various kinds of
bills of entry and shipping bills;
(g)
procedure for assessment and payment of duty;
(h)
examination of merchandise at the Customs Stations;
(i)
provisions of the Trade of Merchandise Marks Act, 1958 (43 of 1958);
(j)
prohibitions of import and export;
(k)
bonding procedure and clearance from band;
(l)
re-importation and conditions for free re-entry;
(m)
drawback;
(n)
offences under the Act,
(o)the
provisions of allied Acts including imports and Exports (control)
Act, 1947 (18 of 1947), Foreign Exchange Regulation Act, 1973 (46 of
1973), Indian Explosives Act, 1884 (4 of 1884), Arms Act, 1959 (54 of
1959), Opium Act, 1879 (1 of 1878), Drugs and Cosmetics Act, 1940 (23
of 1940), Destructive insects and Pests Act, 1914 (2 of 1914),
Dangerous Drugs Act, 1930 (2 of 1930) in so far as they are relevant
go the clearance of goods through customs;
(p)
procedure in the matter of refund of duty paid, appeals and revision
petitions under the Act.
4. The
Commissioner shall also satisfy himself whether the licensee in Form
B (See Form 48 in para 5) if he is an individual, possesses, or in
the case of a firm of company, the persons who will be actually
engaged in the work relating to clearance of goods through customs on
behalf of that firm or company, possess satisfactory knowledge of
English and the local language of the Customs Station:
Provided
that in the case of persons deputed to work exclusively in the docks,
knowledge of English will not be compulsory. Knowledge of Hindi will
be considered as a additional or desirable qualification.
5.
The holders of a regular licence under regulation 10 may authorise
one of their employees or partners or directors, to appear for the
examination referred to in sub-regulation (1), on behalf of such
holders of regular licence in addition to the person of their agency
who has passed the examination referred to in sub-regulation (1).
10.
Grant of regular licence.(1) The
Commissioner shall, on receipt of an application in Form C (See Form
No.49 in Part 5), grant a regular licence in Form D (See Form 50 in
Part 5) on payment of a fee of (Rs.5000/-) to such holder of a
temporary licence who qualifies in an examination referred to in
Regulation 9 and whose performance is found to be satisfactory with
reference, inter alia, to the following: –
quantity
or value of cargo cleared by such licensee conforming to norms as
may be prescribed by the Commissioner;
absence
of instances of delay either in the clearance of goods or in the
complaints of misconduct including non-compliance of any of the
obligations specified in Regulation 14.
(2) The
Customs House Agents who are granted regular licence under Regulation
10, shall be eligible to work in all Customs Stations subject to
fulfillment of the following requirements:
the
licensee shall make an application to the Commissioner of the
concerned Customs Station where he intends to transact business for
purposes of registering himself and his authorised staff;
he
fulfils the conditions stipulated in clause (b) of Regulation 6
relating to financial soundness and possesses the ability to provide
adequate warehousing and transport facilities at the place of
clearance of goods and production of evidence relating to
availability of sufficient clientele at his disposal;
he
shall also be required to enter into a separate bond in Form D (See
Form 50 in part 5) for due observation of these regulations and to
furnish a separate Bank Guarantee for each Customs Stations as
stipulated under Regulation 11; (he shall produce evidence of
knowledge for the local language of the Customs Station, at which he
wished to conduct business;).
On
fulfilment of the aforesaid conditions, the Commissioner of the
Customs Station at which the licensee intends to transact business
shall grant a licence in Form ‘D’ (See Form No.50 in
part 5) authorising him to transact business at that Customs
Station:
Provided
that no separate licence would be required in places where in
addition to a Custom House handling imports by sea, there is also an
international airport to handle imports by air even if under the
jurisdiction of a different Commissioner.
(3)
The Commissioner may reject an application for the grant of regular
licence to act as Custom House Agent if the holder of the temporary
licence fails to qualify in the examination in terms of Regulation 9,
or the holder of temporary licence on evaluation of his performance
in terms of Regulation 10 is not considered suitable due to any other
reason to be stated in the order passed by the Commissioner.”
Adverting
to the facts of the case, the petitioner joined a Company, viz., M/s
Mathurdas Narandas & Sons Forwarders Limited possessing a
permanent Customs House Agent Licence in 1988 in Mumbai and later
was transferred to Ahmedabad and power of attorney was granted in
his favour on 6.6.1995. The petitioner thereafter appeared for the
written examination prescribed under Regulation 9 of CHALR, 1984 and
got qualified as per Customs Notice No.1/99 dated 23.6.1999. He
later on appeared for the oral examination and got qualified as per
Customs Notice No.2/1999 dated 20.10.1999. Accordingly, the
petitioner received certificate of success in the examination held
under Regulation 9 of CHALR, 1984. Since the licence was granted in
the name of the Company, the petitioner, although being a person who
had appeared and successfully cleared the examination and the
criteria governing grant of licence (and otherwise possessed the
qualification), was not a licence holder in his individual capacity.
As the petitioner had already appeared for the examination and had
already satisfactorily performed the work as Customs House Agent
since 1991 under temporary licence, oral requests were made to the
respondent No.3 to grant licence to the petitioner however despite
repeated requests licence was not granted, and the petitioner was
told that the request would be considered as and when applications
are invited by the Commissioner under the Regulations. The
petitioner was, therefore, constrained to continue working as a
director as per Board Resolution with F Pass for M/s Mathurdas
Narandas & Sons Forwarders Limited as provided for under
Regulation 20(6) of CHALR, 1984 and could not independently act as a
Customs House Agent. Since then the petitioner has been working
under the same arrangement and is unable to take up the occupation
or business of Customs House Agent on his own as there have been no
invitations extended by the Commissioner under Regulation 4 of the
Regulations, 1984.
In
the meanwhile vide Notification No.21 of 2004 – Customs (N.T.)
the respondent No.2 Board framed fresh Customs House Agent Licensing
Regulations, 2004 (CHALR, 2004) thereby superseding 1984 Regulation,
except in respect of things done or omitted to be done before such
supersession. The relevant provisions of the Regulations, 2004 are
reproduced hereunder:
4.
Invitation of application. — The Commissioner of
Customs may 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 by means of a notice affixed on the
notice board of each Customs Station as well as through publication
in at least [two newspapers, one in English and the other in
vernacular language having wide circulation in the area of his
jurisdiction,] specifying therein the last date of receipt of
application. Such application shall be for clearance work within the
jurisdiction of the said Commissioner of Customs.
5.
Application for licence.- (1) An application for a licence
to act as a Customs House Agent in a Customs Station shall be made
[in the form of letter to the jurisdictional Commissioner of
Customs, containing details as specified in Form A] and shall,
inter alia, contain the name and the address of the
person applying; and
(2)
If the applicant is a firm –
(a)
the name and address of every partner of the firm, the firm’s
name, and
(b)
the name of the partner or the duly authorized employee, who will
actually be engaged in the clearance of goods or conveyances through
the customs.
If
the applicant is a (3) company –
(a)
the name of each director, managing director, manager, and
(b)
the names of director, managing director, manager or the duly
authorized employee, who will actually be engaged in the
clearance of goods or conveyances through the customs.
6.
Conditions to be fulfilled by the applicant. — The
applicant referred to in clause (b) of sub-regulations (2) and (3) of
regulation 5, as the case may be, or a person who has passed the
examination referred to in regulation 8, shall prove to the
satisfaction of the Commissioner of Customs, that –
(a)
the applicant, or his authorized employee, is a graduate from a
recognized University and possesses a professional degree viz.
C.A./M.B.A./L.L.B./Diploma in Customs Clearance work from any
Institute or University recognized by the Government with a working
knowledge of computers and customs procedures, or is a graduate
having at least three years experience in transacting Custom House
Agent work as a G-Card holder, or a person who has passed the
examination referred to in regulation 8, or is a retired Group ‘A’
officer from the Indian Customs and Central Excise Service (IC&CES)
having a minimum of ten years experience in Group ‘A’.
(b)
the applicant has financial viability supported by a certificate
issued by a Scheduled Bank or such other proof acceptable to the
Commissioner of Customs evidencing possession of assets of value of
not less than Rs. 2 lakhs;
(c)
the applicant is a citizen of India.
7.
Scrutiny of application for licence.
— On receipt of application under regulation 5, the
Commissioners of Customs may make inquiries for verification
of the particulars set out in the application and also such other
inquiry as he may deem necessary, including inquiries about the
reliability and financial status of the applicant.
8.
Examination of the applicant. —
(1) Any applicant whose application is received within the last date
specified in the notice or publication, as the case may be, referred
to in regulation 4 and who satisfies the requirements of regulations
5 and 6, shall be required to appear for the written as well as oral
examination conducted by the Director General of Inspection at
specified centers and specified dates, twice every year, for which
intimation shall be sent individually in advance before the date of
examination.
Provided
that an applicant who has already passed the examination referred
to in regulation 8 will not be required to appear for any further
examination.
(2)
The applicants declared successful in written examination shall be
called for oral examination.
(3)
It shall be necessary for the applicant to clear written as well as
oral examinations separately. An applicant who clears the written
examination but fails in the oral examination linked to it, shall
have to clear the oral examination within two years of the related
written examination irrespective of the number of chances, and
if he fails do so, he shall be treated as having failed in the
examination.
(4)
An applicant shall be allowed a maximum period of seven years within
which he shall pass both the written and oral examinations. No
further extension of time shall be granted.
(5)
Notwithstanding anything contained in sub-regulation (4), any person
who holds a temporary licence granted under regulation 8 of the
Customs House Agents Licencing Regulations, 1984, shall be allowed to
pass the examination within a period of two years from the date of
commencement of these regulations.
(6)
The examination may include questions on the following :-
(a) preparation
of various kinds of bills of entry and shipping bills;
(b)
arrival entry and clearance of vessels;
(c)
tariff classification and rates of duty;
(d)
determination of value for assessment;
(e)
conversion of currency;
(f)
nature and description of documents to be filed with various kinds of
bills of entry and shipping bills;
(g)
procedure for assessment and payment of duty;
(h)
examination of merchandise at the Customs Stations;
(i)
provisions of the Trade and Merchandise Marks Act, 1958 (43 of 1958),
the Patents Act, 1970 (39 of 1970) and the Copy Rights Act, 1957 (14
of 1957).
(j)
prohibitions on import and export;
(k)
bonding procedure and clearance from bond;
(l)
re-importation and conditions for free re-entry;
(m)
drawback and export promotion schemes;
(n)
offences under the Act;
(o)
the provisions of allied Acts including the Foreign Trade
(Development and Regulation) Act, 1992 (22 of 1992), the Central
Excise Act, 1944 (1 of 1944), Foreign Exchange Management Act, 2000
(42 of 1999), the Indian Explosives Act, 1884 (4 of 1884), the Arms
Act, 1959 (54 of 1959), the Narcotics Drugs and Psychotropic
Substances Act, the Drugs and Cosmetics Act, 1940 (23 of 1940),
Destructive Insects and Pests Act, 1914 (2 of 1914), the Dangerous
Drugs Act, 1930 (2 of 1930), in so far as they are relevant to the
clearance of goods through customs;
(p)
provisions of the Prevention of Corruption Act, 1988 (49 of 1988);
(p)
procedure in the matter of refund of duty paid, appeals and revision
petitions under the Act.
(q)
on-line filing of electronic shipping bills or bills of entry and
Indian Customs and Central Excise Electronic Commerce/Electronic Data
interchange Gateway (ICEGATE) and Indian Customs Electronic Data
Interchange Systems (ICES).
(7)
The Commissioner of Customs shall also satisfy
himself whether the applicant, if he is an individual, possesses, or
in the case of a firm or company, the persons who shall be actually
engaged in the work relating to clearance of goods through customs on
behalf of that firm or company, possess satisfactory knowledge of
English and the local language of the Customs Station :
Provided
that in the case of persons deputed to work exclusively in the docks,
knowledge of English shall not be compulsory. Knowledge of Hindi
shall be considered as desirable qualification.
(8)
The holders of a licence under regulation 9 may
authorize any one or more of their employees or partners or directors
to appear for the examination referred to in sub-regulation (1) on
behalf of such holders of licence, in addition to the person of their
agency who has passed the examination referred to in sub-regulation
(1).
9.
Grant of licence. —
(1) The Commissioner of Customs shall on payment of a fee of Rs.
5,000/- grant a licence in Form B to an applicant who has passed the
examination referred to in regulation 8.
(2)
The Customs House Agents who are granted licences under
sub-regulation (1) shall be eligible to work in all Customs Stations
within the country subject to intimation in Form C to the
Commissioner of Customs of the concerned Customs Station where he
intends to transact business. No separate licence shall be required
in places where in addition to a Customs House handling imports by
sea, there is also an International airport to handle imports by air,
even if under the jurisdiction of a different Commissioner of
Customs.
(3)
The Commissioner of Customs may reject an
application for the grant of licence to act as Customs House Agent if
the applicant is [convicted of] fraud or forgery, or any criminal
proceedings are pending before any court of law against him or he has
been convicted in any court of law.
(4)
Any applicant aggrieved by the order of the
Commissioner of Customs passed under sub-regulation (3) may
appeal to the Chief Commissioner of Customs or Chief Commissioner of
Customs and Central Excise, as the case may be, within a period of
thirty days from the communication of such order.
(5)
The Chief Commissioner of Customs or the Chief Commissioner of
Customs and Central Excise, as the case may be, may, on his own
motion or otherwise, call for and examine the records of any
proceedings in which the Commissioner of Customs has passed the order
under sub-regulation (3) for the purpose of satisfying himself as to
the legality, propriety or correctness of such order and may pass
such other orders as he may deem fit. No order under this
sub-regulation shall be made so as to prejudicially affect any person
unless such person is given reasonable opportunity for making a
representation and being heard in his defense, if he so desires.
(6)
No order shall be made under sub-regulation (5) in relation to an
order passed by Commissioner of Customs under sub-regulation (3) or
sub-regulation (1), as the case may be, after the expiry of one year
from the date on which such order was passed by the Commissioner of
Customs.
[(6A.)
An appeal filed by an applicant under sub-regulation (4) shall be
decided by the Chief Commissioner of Customs or the Chief
Commissioner of Customs and Central Excise, as the case may be, with
in a period of one year from the date on which such appeal is filed.]
In
the new Regulations, most of the regulations are more or less the
same; however, the regulation providing for the grant of temporary
licence has been removed. One principal similarity in both the
Regulations is that the process of applying for licence can only be
initiated by the Commissioner exercising his powers and discretion
under Regulation 4.
Subsequently,
the respondent No.1 issued clarification regarding CHALR 2004 vide
Notification dated 10.6.2004 being No.42/04. It may be pertinent to
reproduce question 1(b) and the answer thereto in relation to
Regulation 9:
Regulation
9
(b)
Can persons who have qualified the exam under regulation 9 of
CHALR 1984 be exempted from appearing the exam referred to in
regulation 8 of CHALR 2004 and be granted licence under
regulation 9(1) of CHALR 2004 directly?
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
On
31st October, 1997 the respondent No.1 issued a Circular
on the issue of Customs House Agent Licence. It may be pertinent to
refer to issue No.(ii) thereunder which reads thus:
“[ii]
Issue of CHA licenses to applicants who had passed the
examinations under CHALR, 2004:
4.
It has been represented to the Board that some of the
Commissionerates have not invited applications for grant of CHA
licenses, since the norms for issue of fresh license are required to
be reviewed by the Board. Further, in cases where the applicants
having passed the requisite examination under Regulation 8 of CHALR,
2004, have not been granted with a CHA license. Board had also
examined these issues and decided that irrespective of the norms
prescribed by the Board vide F.No.502/5/92-Cus-VI dated 18.5.1994
under CHALR, 1984, concerned Commissioners of Customs shall issue CHA
licenses to all those applicants who had passed the Regulation 8
examination conducted under CHALR, 2004, subject to their fulfillment
of the requisite conditions as mentioned in CHALR, 2004. Board
desires that the Commissioners of Customs shall clear up backlog of
pending requests by various applicants who had qualified as per
CHALR, 2004, for issue of licenses which have been held up by various
Customs Commissionerates within a month and send a compliance report
to the Board.”
Vide
application dated 26.12.2007, the petitioner applied for grant of
licence in the name of Devendra N. Thakker, which is still pending
and no action has been taken thereon.
Vide
notification No.30 of 2010-Customs (N.T.) dated 8.4.2010, the
respondent No.1 framed the Customs House Agents Licensing
(Amendment) Regulations, 2010, (hereinafter referred to as the
(Amendment) Regulations, 2010) retrospectively amending various
regulations in the CHALR, 2004. Clause No.2 of the amendment
notification which amends Regulation 8 of the CHALR, 2004, is
relevant for the present purpose and reads thus:
“[2] In
the Customs House Agents Licensing Regulations, 2004 (hereinafter
referred to as the said Regulation) –
[i]
in regulation 8,
[a]
in sub-regulation (1) for the words “twice every year”,
the words “once every year” shall be substituted.
[b]
after sub-regulation (8), the following shall be inserted, namely:-
“(9) Notwithstanding
anything contained in these regulations, any person who had passed
the examination conducted in regulation 9 of the Customs House Agents
Licensing Regulation, 1984, and has not yet been granted license
under these regulations, upon declaring successful in a written
examination conducted on the following subjects, shall be deemed to
have passed the examination referred to in regulation 8 for the
purpose of these regulations.
[a] The
Patents Act, 1970 and Indian Copyright Act, 1957;
[b] Central
Excise Act, 1944;
[c] Export
promotion schemes;
[d] Procedure
on appeal and revision petition;
[e] Prevention
of Corruption Act, 1988;
[f] Online
filing of electronic Customs declarations;
[g] Narcotic
Drugs and Psychotropic Substances Act, 1985;
[h] Foreign
Exchange Management Act, 1999″
Thus,
Regulation 2 of the (Amendment) Regulations, 2010 introduces a
mandatory requirement for all successful candidates who had already
passed the examination under CHALR, 1984, to again give examinations
in the subjects stated therein, which were already mentioned in
CHALR, 2004. The (Amendment) Regulations, therefore, contemplate a
situation whereby the candidates successful under Regulation 9 of
CHALR, 1984, are still required to appear in the examination of
specific subjects as specified therein, while candidates successful
in the exam conducted under CHALR, 2004 as well as the persons who
had been granted licences under CHALR, 1984 are not required to go
through the same. It is the categorical case of the petitioner that
in the examinations conducted during the period between the
introduction of CHALR, 2004 till the issuance of Notification
No.30/2010 dated 8.4.2010 amending CHALR, 2004 retrospectively, no
questions had been asked from the newly introduced subjects in
CHALR, 2004.
Subsequently
another Circular being Circular No.9 of 2010-Custom dated 8.4.2010
regarding issue of Customs House Agents Licence, came to be issued.
Clause (vi) of the same which is relevant for the present purpose
reads thus:
“(vi)
CHA licenses in respect of individuals who had passed the
examination under CHALR, 1984:
8.1.
The issue of granting CHA license in respect of persons who had
already passed the written and oral examinations held under
Regulation 9 examination of Customs House Agents Licensing
Regulations (CHALR), 1984 and are yet to be considered for issue of
CHA license, was examined by the Board. On this issue, the Board in
its earlier meeting had held that with the introduction of CHALR,
2004, there was no generalized case for grant of CHA licence to such
applicants having passed Regulation 9 examination under CHALR, 1984
as the requirements of educational qualification and also examination
curriculum were different in the two regulations. Considering the
hardships experienced by such persons and in order to remedy the
situation by providing one time opportunity to qualify them for grant
of CHA license, It has been decided by the Board to conduct written
examination for these persons on the following additional subjects:
(a) The Patents Act, 1970 and Indian Copy Right Act; 1957 (b) Central
Excise Act, 1944 (c) export promotion schemes (d) Procedure on appeal
and revision petition (e) Prevention of Corruption Act, 1988 and (f)
online filing of electronic Customs declarations, (g) Narcotic Drugs
and Psychotropic Substances Act, 1985 and (h) Foreign Exchange
Management Act, 1999. The aforesaid examination would be conducted by
the Directorate General of Inspection after giving due notice to
these candidates. Accordingly, persons who qualify in the aforesaid
examination shall be deemed to have passed under the
Regulation 8 of Customs House Agents Licensing Regulations, 2004, and
would be considered for grant of CHA license in terms of Regulations
9 of CHALR, 2004 by the concerned Commissionerate from where they had
earlier passed the CHA examination held under CHALR, 1984.
8.2.
Board also took note of the fact that these candidates had passed the
CHA examination held under CHALR, 1984 based on the qualification
prevailing at that relevant point of time, and that a precedent
existed wherein a dispensation was prescribed vide Boards Circular
No.48/2000-Customs dated 22.5.2000 for a specific period. Accordingly
it was also decided by the Board that in case of Regulation 9
examination passed candidates under the CHALR, 1984, the relaxation
provided in respect of educational qualifications vide Boards
Circular No. 48/2000-Customs shall be extended on similar basis.”
Thereafter
the Commissioner, Custom House, Ahmedabad issued a public notice
being Public Notice No.26/2010-CUSTOMS dated 4th May,
2010 declaring examination under the newly introduced mandatory
subjects for candidates qualified under regulation 9 of CHALR, 1984
which was to be held on 15th July, 2010. Being aggrieved,
the petitioners have moved the present petitions seeking the reliefs
noted hereinabove.
Mr.
K.S. Nanavati, Senior Advocate, learned counsel for the petitioners
invited attention to the provisions of section 146 of the Customs
Act, 1962 (the Act) to point out that sub-section (2) thereof
empowers the Board to make regulations for the purpose of carrying
out the provisions of the said section and that such regulations,
interalia, may provide the qualifications of persons who may apply
for a licence and the qualifications of persons to be employed by a
licensee to assist him in his work as an agent. It was submitted
that section 146 of the Act only empowers the Board to make
regulations to regulate grant of licence in relation to entry or
departure of a conveyance or import or export of goods. Thus, the
Board can exercise powers only as provided under clause (a) to (f)
provided under sub-section (2) of section 146. The said provision
does not authorise the Board to assume powers to prescribe passing
of an examination as a condition either for applying for licence or
arrogate to itself power to hold examinations and determine the
subjects. It was, accordingly, contended that to the extent the
Regulations travel beyond the scope of the power of delegated
legislation the same are ultra vires the provisions of section 146
of the Act. It was further submitted that Regulations 8 and 9 of
CHALR 2004 insofar as they prohibit a person from working as a
Customs House Agent unless he has passed an examination prescribed
by Regulations 8 and 9 are ultra vires the powers of the Board,
conferred by section 146 of the Act. Though section 146 of the Act,
empowers the Board to prescribe the qualifications, the same does
not empower the Board to prescribe for qualifying examinations and
syllabus for such examinations. In support of his submissions, the
learned counsel placed reliance on the decision of the Supreme Court
in the case of Global Energy Ltd. v. Central Electricity
Regulatory Commission, (2009) 15 SCC 570, for the
proposition that it is now a well-settled principle of law that the
rule-making power “for carrying out the purpose of the Act”
is a general delegation. Such a general delegation may not be held
to be laying down any guidelines. Thus, by reason of such a
provision alone, the regulation-making power cannot be exercised so
as to bring into existence substantive rights or obligations or
disabilities which are not contemplated in terms of the provisions
of the said Act. It was, accordingly, submitted that in the absence
of any provision in the parent legislation which provides for
passing of an examination for obtaining a licence, it cannot be
introduced by way of a regulation. Placing reliance on the contents
of paragraphs 27, 35, 39 and 46 of the above referred decision which
read thus:
“27.
The power of the regulation-making authority, thus, must
be interpreted keeping in view the provisions of the Act. The Act is
silent as regards conditions for grant of licence. It does not lay
down any pre-qualifications therefor. Provisions for imposition of
general conditions of licence or conditions laying down the
pre-qualifications therefor and/or the conditions/qualifications for
grant or revocation of licence, in absence of such a clear provision
may be held to be laying down guidelines by necessary implication
providing for conditions/qualifications for grant of licence also.
35.
In the event a statute provides for licensing, in a case
of this nature, the same must thus be found to satisfy the test of
reasonableness. The standard for determining reasonableness of a
statute so as to satisfy the constitutional scheme as adumbrated in
Article 14 of the Constitution of India must receive a higher level
of scrutiny than an ordinary statute. Such a higher level of scrutiny
is necessary not for the purpose of determining the
constitutionality of the statute alone vis-à-vis the field of
legislative power as envisaged under Article 245 of the Constitution
of India but also having regard to the object and purpose, the
statute seeks to achieve.
39.
The superior courts would ensure that the subordinate
legislation has been framed within the four corners of the Act and is
otherwise valid. The issue therefore which arises for our
consideration is as to whether the delegation having been made for
the purpose of carrying out the object, could the limitation be
imposed for ascertaining as to whether the applicant is fit and
proper person and disregarding his creditworthiness. There cannot be
any doubt whatsoever that a statute cannot be vague and unreasonable.
46.
It is now a well-settled principle of law that essential
legislative functions cannot be delegated. The delegatee must be
furnished with adequate guidelines so that arbitrariness is eschewed.
On what basis and in particular, keeping in view the possible loss of
reputation and consequently the business of an applicant for grant of
licence would suffer, it was obligatory on the part of Parliament to
lay down requisite guidelines therefor”.
it
was submitted that the Customs Act is a fiscal statute which provides
for levy of customs duty on import or export of goods and that the
object and purpose of the Act has nothing to do with the
qualification of Customs House Agents. It was accordingly, contended
that the qualification, if any, should find place in the Customs Act
itself and that essential legislative function cannot be delegated.
If passing of an examination was a condition precedent for granting a
Customs House Agent licence, the Legislature would have provided for
such a qualification/condition for passing an examination and would
not have left the same to the delegate.
Next,
it was contended that section 146 of the Act does not confer any
power on the Board to frame regulations which empower the authority
to decide the maximum number of Customs House Agents who can be
granted licences to work as such, nor give any guidelines as to how
such numbers shall be fixed. The Act also does not authorize the
Board to empower the authority to make it a condition that a person,
who otherwise holds the qualifications or works as Customs House
Agent, cannot even apply or offer himself for an examination unless
the authority (in the present case, the Commissioner of Customs)
invites applications. It was, accordingly, submitted that Regulation
4 is ultra vires section 146 of the Act. It was contended that there
cannot be any arbitrary ceiling on the number of persons who may be
allowed to engage in the business of Customs House Agent and that
such a restriction creates a monopoly in favour of a few and keeps
really meritorious persons from engaging themselves in a profession,
business or occupation of their choice. The right to enter such
business also cannot be made dependent on the whims and caprice of
an officer by leaving to his arbitrary decision whether or not to
invite applications from persons interested in working as Customs
House Agents or arbitrarily fixing the ceiling on the maximum number
of Customs House Agents that may be issued licenses. It was
submitted that arbitrariness of the regulations is amply clear from
the fact that, in the Ahmedabad region, after 1996, the concerned
Commissioner has not invited any applications and persons like the
petitioners, having passed the examination in the year 1999 etc. and
having requested the Jurisdictional Commissioner of Customs to grant
a licence, have still not been able to obtain licences and with a
change in the regulations are now being compelled to appear in the
examinations for the newly added subjects. It was submitted that it
is only on account of the failure on the part of the respondents to
invite applications that despite having passed the examination under
Regulation 9 of CHALR 1984 and having been working with regular
licence holding companies/firms, etc., the petitioners are now being
compelled to appear in a fresh examination for newly added subjects.
That the action of the respondents is clearly arbitrary and
unreasonable and therefore, violative of Article 14 of the
Constitution of India. It was urged that the petitioners belong to a
class of persons who had appeared in the examination and have been
working as Customs House Agents in various capacities. To require
such persons to again appear in the examination after several years
of experience when a Customs House Agent holding a regular licence
is not required to do so, is clearly discriminatory as the same
treats equals as unequals. The learned counsel further submitted
that the (Amendment) Regulations, 2010 seek to create inequality
between the successful candidates under CHALR, 1984 and candidates
appearing under CHALR, 2004 by making it mandatory for the
successful candidates under CHALR, 1984 to appear for the
examination on subjects as mentioned in the (Amendment) Regulations,
2010 while those candidates who have appeared for the examination
under CHALR, 2004 have never been asked questions pertaining to such
subjects as is evident from the examination papers annexed to the
petition.
Next,
it was contended that vide its preamble, CHALR, 2004, while
superseding CHALR, 1984, clearly saves things done or omitted to be
done under CHALR, 1984. That despite the clear declaration in its
preamble, the CHALR, 2004 read with the (Amendment) Regulations
2010, clearly imply that the successful candidates under Regulation
9 examination of CHALR, 1984 would lose their right to apply for a
licence unless they pass the specific examination as contemplated
under the (Amendment) Regulations, 2010. It was submitted that it
is only after the success in the examination that the Commissioner
scrutinizes the result as well as the candidate to decide whether
the candidate deserves the licence or not. As per the saving clause,
all acts which have been done or are left to be done are saved
despite the supersession. This clearly implies that once the
candidates are successful in the examination under Regulation 9 of
CHALR, 1984, the process of scrutiny of the candidate for the
issuance of a licence has already begun and can only culminate into
the Commissioner either granting a licence or refusing to grant a
licence. The candidate, as contemplated under the preamble, is not
required to reappear in a separate specific examination to reinstate
the right at the stage at which it was already pending and had
crystallized under CHALR, 1984, as by virtue of the preamble the
crystallized right was already saved.
It
was further submitted that despite having the ability to satisfy
each and every criteria and condition as required of them under the
Regulations, that of financial status, experience, proficiency,
reliability and success in examination, the petitioners, by virtue
of the provisions of CHALR 2004 as amended vide the (Amendment)
Regulations, 2010, become ineligible for a licence till clearance of
the examination as contemplated in the (Amendment) Regulations, 2010
which illegally seeks to take away the pre-existing right bestowed
under CHALR, 1984, which the petitioners had acquired. It was
pointed out that although the petitioners are required to appear in
a separate examination under the (Amendment) Regulations, 2010, the
petitioners have been granted an identity card under Form “F”
as per CHALR, 2004, whereas during the regime of the CHALR, 1984,
the equivalent corresponding identity card would be issued in Form
“I”. Procedurally, the I.D. Cards are issued after
grant of licence, while in the present case, the petitioners have
been treated at par with the successful candidates of examination
conducted under CHALR, 2004
Reliance
was placed upon the decision of the Supreme Court in the case of B.
P. Sharma v. Union of India, AIR 2003 SC 3863, and more
particularly to paragraph 15 thereof to submit that there must be a
direct and proximate nexus or a reasonable connection between the
restriction imposed by the Regulations and the object sought to be
achieved. It was submitted that the (Amendment) Regulations, 2010
read with Regulation 8 of the CHALR, 2004 insofar as the same
require the petitioners and other similarly situated persons who
have passed Regulation 9 examination and have been doing the work of
Customs House Agents in different capacities, to pass the
examination in the additional subjects introduced for the first time
by the 2004 Regulations as a condition of being considered for grant
of regular licence under Regulation 9 is violative of Article 14 of
the Constitution. It was submitted that a large number of persons
similarly situated to the petitioners have been granted regular
licences in other Collectorates.
Referring
to the decision of the Supreme Court in the case of Chandrakant
Krishnarao Pradhan and another v. Jasjit Singh, the Collector of
Customs, Bombay, AIR 1962 SC 204, and more particularly to
paragraph 3 thereof it was pointed out that when section 202 of the
Sea Customs Act, 1878 came to be amended by the Sea Customs
(Amendment) Act, 1955, the original licences, whether permanent or
temporary, became ineffective after the date specified by the
Central Government. It became necessary for all persons to apply for
licences granted in accordance with the Rules framed under
sub-section (2) of the amended section 202. It was submitted that
similarly all persons qualified under CHALR, 1984 ought to have been
given equal treatment whereas in the facts of the present case the
persons who have passed the examination held under regulation 9 of
CHALR, 1984 and have been granted licence are not required to pass
the examination held under Regulation 8 of CHALR 2004 read with the
impugned (Amendment) Regulations, 2010 to continue to work as
Customs House Agents or for renewal of their licences. The
petitioners who have also passed the Regulation 9 examination and
are working as Customs House Agents as authorised representatives of
licensed Customs House Agents and licensed Customs House Agents fall
in the same class. Thus the classification made and differential
treatment meted out to the petitioners is therefore, violative of
Article 14 and impose an unreasonable restriction on the fundamental
rights of the petitioners under article 19(1)(g) of the
Constitution.
It
was, accordingly, submitted that despite the fact that the
petitioners are similarly situated to those persons who had acquired
licenses under CHALR 1984, merely because of failure on the part of
the concerned Commissioner to invite applications before the coming
into force of CHALR, 2004, the petitioners are now sought to be
discriminated against and are required to appear in an examination
for additional subjects after having already cleared the qualifying
examination several years ago. It was urged that considering the
fact that even for the examination held under CHALR 2004, no
question had been asked from the newly added subjects, it is
apparent that the petitioners are sought to be discriminated against
even in relation to the candidates who have so far appeared and
cleared the examination under regulation 9 of CHALR 2004. It was
submitted that, in the circumstances, the action of the respondents
in requiring the petitioners to appear in the examination for
additional subjects after such a length of time is irrational,
discriminatory and arbitrary, and as such, requires to be quashed
and set aside as being violative of the petitioners’ fundamental
rights under Article 14 of the Constitution of India.
Learned
counsel for the petitioners further submitted that the petitioners
having passed the Regulation 9 examination under CHALR, 1984 have an
accrued right to consideration of their application for grant of
licence in the light of the eligibility criteria laid down in CHALR,
1984 both on the principle of legitimate expectation and also on the
ground that the said right which has already accrued in their favour
is not affected by coming into force of CHALR, 2004. It was,
accordingly, urged that the (Amendment) Regulations, 2010 to the
extent the same purport to affect the accrued right of the
petitioners is violative of Articles 14 and 19(1)(g) of the
Constitution of India being discriminatory and being an unreasonable
restriction on the fundamental rights of the petitioners.
The
petitions were vehemently opposed by Mr. R. M. Chhaya, learned
Senior Standing Counsel for the respondents. Referring to the
affidavit in reply filed on behalf of the respondents, it was
submitted that CHALR 2004 came to be framed pursuant to the
recommendations made by the Kelkar Committee which was considered by
the Board in the public interest. It was pointed out that the
Committee had recommended that there should be review of the
technical qualifications of the Customs House Agents to include
knowledge of computer, Prevention of Corruption Act, etc. It is in
these set of circumstances that in the new regulations, various new
subjects have been introduced in the light of the recommendation
made by the Kelkar Committee. Reliance was placed upon a decision of
the Madras High Court in Writ Appeal No.498 and 1125 of 2009 and
other writ petitions, wherein it had been held that candidates
having passed examinations under Regulation 9 of the CHALR 1984,
presently seeking Customs House Agents licences cannot be treated to
have passed the examinations under CHALR, 2004 unless they have
actually passed the examination prescribed under CHALR, 2004. It was
pointed out that based upon the decision of the Madras High Court,
the Board decided to conduct written examination for those persons
who had passed the Regulation 9 Examination under the earlier
Regulations, that is, CHALR 1984 in respect of the following
additional subjects:
(a)
The Patent Act, 1970 and Indian Copyright Act, 1957;
(b)
Central Excise Act, 1944;
(c)
Export promotion schemes;
(d)Procedure
on appeal and revision petition;
(e)
Prevention of Corruption Act, 1988;
(f)
Online filing of electronic Customs declarations;
(g)
Narcotic Drugs and Psychotropic Substances Act, 1985;
(h)
Foreign Exchange Management Act, 1999″
It
was pointed out that the said subjects are covered under the
syllabus prescribed for examination under regulation 8 of CHALR,
2004 and were not covered in the syllabus prescribed for examination
under regulation 9 of CHALR, 1984. Thus, the decision of the Board
to conduct written examination for persons, who had passed the Rule
9 examination under earlier regulations, that is, CHALR 1984, on the
said additional subjects, is based upon the need to ensure the same
competence and knowledge levels amongst successful applicants under
both CHALRs. The examination would be conducted by the Directorate
General of Inspection after giving due notice to these candidates.
Accordingly, persons who qualify in the aforesaid examination shall
be deemed to have passed under the Regulation 8 of the Customs House
Agents Licensing Regulations, 2004, and would be considered for
grant of Customs House Agent licence in terms of Regulation 9 of
CHALR, 2004 by the concerned Commissionerate from where they had
earlier passed the CHA examination held under CHALR, 1984.
Next
it was submitted that the task of inviting applications has been
left to the wisdom of the individual Commissioner of Customs, who in
turn decides the interval or duration of the period in the matter of
inviting applications based on the necessity and nature of work in
each Customs House. It was further submitted that a candidate
taking the Customs House Agent examination is expected to have a
certain minimum knowledge of laws and issues which he might
encounter in the course of his work and can be reasonably expected
to have awareness of the same. Therefore, it is essential for the
candidates successful in the regulation 9 examinations under the
CHALR, 1984 to undertake separate written examination specifically
on the subjects mentioned therein for the purpose of granting
licence. It was contended that the Director of a Company holding a
regular CHA licence as an authorized person of a company and an
individual who had cleared the Regulation 9 examination but is yet
to get a licence, are two different classes of persons, altogether.
They cannot be equated with each other and are unequal to begin
with.
As
regards the contention raised on behalf of the petitioners that the
scope of the regulations gets limited to those mentioned in
sub-paragraphs (a) to (f) of section 146(2) of the Act, it was
submitted that the word used in sub-section (2) is “may”
which makes it amply clear that the scope of such regulations do not
get limited to those mentioned in clauses (a) to (f) enumerated
thereunder. That section 146(2)(d) of the Act clearly lays down that
the Board may make regulations which may provide for the
restrictions and conditions subject to which a licence may be
granted. That the Board, in exercise of the said power, has
prescribed the restriction on the number of licences for which
Commissioner of Customs may invite applications as per his
assessment of the requirement under Regulation 4. Further, the
passing of examination under CHALR 1984 and satisfying the
requirements of Regulations 5 and 6 of the CHALR, 2004, would not
ipso facto entitle a person to grant of a licence and the
regulations provide for a condition that such persons can apply for
a licence only when applications for licences have been invited by
the Commissioner of Customs vide regulation 4. It was submitted
that, thus, the above restrictions and conditions are not ultra
vires section 146 of the Act.
Next
it was submitted that the provisions contained in Regulation 4 of
CHALR, 1984 as well as Regulation 4 of CHALR, 2004, vest discretion
in the Commissioner of Customs to invite applications for grant of
such number of Customs House Agent licences as assessed by him, to
act as Customs House Agent. The petitioners are not being denied the
right to engage themselves in a profession, occupation, vocation,
trade or business of their choice. However, a reasonable
restriction in the form of qualification in certain additional
subjects that are extremely relevant to customs clearance work and
which does have a rational nexus with the nature of business or
occupation, has been prescribed. Lack of knowledge of basics of the
additional prescribed subjects in the changed global economic
scenario, viz., The Patents Act, 1970, Indian Copyright Act, 1957,
Narcotic Drugs and Psychotropic Substances Act, could lead to
export/import of certain goods that are against the public interest.
That all applicants who have undertaken examination under CHALR,
2004 are required to possess knowledge of the said additional
subjects, as the said subjects were already covered by the
prescribed syllabus. Thus, the requirement laid down for the
petitioners to appear in the additional subjects examination cannot
in any manner be said to be an unreasonable restriction so as to
violate the rights of the petitioners under Article 14 of the
Constitution of India. It was submitted that Article 14 of the
Constitution can be invoked qua equals and that a number of
candidates had appeared in the Regulation 9 examination under CHALR,
1984 conducted by the Customs Commissionerate, Ahmedabad during the
period from 1999 to 2003 and were declared successful. However, none
of them have been granted licences to act as Customs House Agents.
Thus, the petitioners have been given equal treatment with all the
candidates, who are on the same pedestal, as none of the candidates
have been granted a licence.
It
was contended that if an applicant is appearing in the examination
as a proprietor, then he is intending to possess a licence in his
own name and not in the name of partnership firm or a company. The
Director of a Company, holding a regular CHA license as an
authorized person of the company and an individual, who had cleared
the regulation 9 examination but is yet to get a licence, are
altogether two different classes of persons. They cannot be equated
with each other and are unequal to begin with. Thus, the contention
of the petitioners that equals have been treated as unequal, is
incorrect and without any basis whatsoever. It was submitted that
CHALR, 2004 do not provide for any restrictions on the number of the
Customs House Agents. That the Board is of the view that, ideally,
no restriction should be placed on the number of Customs House
Agents operating in the Customs Houses and the market forces should
govern the number of proficient and qualified persons required to
carry out the job of Customs House Agents commensurate with the
volume of import / export cargo. The Board also has not found any
justification in prescribing a turnover based criteria for
ascertainment of the number of Customs House Agent licences required
to be issued at a particular Custom House/Station, inasmuch as the
practice of undertaking Customs House Agent services on the basis of
Form “C” intimation is already in vogue and would render
such exercise meaningless. The Board, therefore, has decided against
fixing a numeric criterion governing the number of Customs House
Agent licenses being issued. Hence, there is no ceiling on the
maximum number of Customs House Agents that can be licensed in terms
of the Regulations or the instructions issued by the Board, which
has been clarified vide paragraph 3 of Circular No.09/2010 dated
8.4.2010.
It
was further submitted that once the Board has vide CHALR, 2004,
changed the eligibility criteria, by including additional subjects
in the syllabus, and the same is given effect to taking note of the
present day intricacies of law, which the Customs House Agents are
bound to have knowledge; the natural corollary of this would be to
ask the Regulation 9 passed candidates (of CHALR 1984) to get
acquainted with the additional laws and qualify for the same. That
the Notification No.30/2010-Customs (NT) seeks to do the same and
the rationale behind issuance of the said notification is to seek
equality in the competence and knowledge level of candidates who
have passed the Regulation 8 examination under CHALR 2004 with that
of those who passed regulation 9 examination under CHALR 1984. It
was further contended that regulation 8 lays down that, “The
Examination may include questions on the following”.
Thus, it is not mandatory that in all question papers, questions
from all topics covered in the syllabus must be asked. It was
contended that there was no pre-existing right which has been taken
away by CHALR, 2004 from the petitioners, because, no such
pre-existing right existed in the first place. It was submitted that
the said issue is directly covered by the judgement dated 15.4.2009
rendered by the Madras High Court in the case of Isak Ebinesar
v. Chairman, CBEC. It was submitted that the Form “F”
card is given to the applicant who has given the examination and
passed the written and oral examination and is employed by Customs
House Agent. The Form “F” does not confer upon the
petitioner the right to grant of licence under the Regulations.
Reliance
was placed upon the decision of the Supreme Court in the case of
D.V. Bakshi v. Union of India, (1993) 3 SCC 663
wherein questions relating to interpretation of Regulations 8 and 9
of the Customs House Agents Licensing Regulations, 1984 had been
raised. However, the said decision pertains to interpretation of the
said regulations and is not relevant to facts of the present case.
Reliance was also placed upon the decision of the Supreme Court in
the case of Federation of Customs House Agents’
Association and others v. Union of India and others, (1996)
10 SCC 136 wherein the validity of Regulation 8 of the Customs House
Agents Licensing Regulations, 1984 had been called in question on
the ground that it provided for the grant of temporary licence
before the applicant qualified at the prescribed examination and
enables the holder of such temporary licence to work on a par with
the regular licensees who had got the licence after passing the
requisite examination. The issue involved in the said case, has no
relevance to the controversy in issue in the present case, hence the
said decision does not come to the aid of the respondents in any
manner. Reliance was placed upon the decision of the Supreme Court
in the case of Union of India v. International Trading Co.
and another, (2003) 5 SCC 437 for the proposition that the
doctrines of promissory estoppel and legitimate expectation cannot
come in the way of public interest. Public interest has to prevail
over private interest.
Reliance
was placed upon the decision of the Maharashtra State Board of
Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar
Sheth, (1984) 4 SCC 27, for the proposition that it is a
common legislative practice that the Legislature may choose to lay
down only the general policy and leave it to the delegate to make
detailed provisions for carrying into effect the said policy and
effectuate the purposes of the statute by framing rules/regulations
which are in the nature of subordinate legislation. It was
accordingly, submitted that section 146 of the Act lays down a
general policy and it is left to the delegate to make detailed
provisions for carrying it into effect to effectuate the purpose of
the statute. Accordingly, the Board has framed regulations making
provision for passing of an examination as per the syllabus
prescribed by the Board to give effect to the provisions of section
146 of the Act. That as such, the Board has not transgressed the
scope of the powers delegated to it and the Regulations as framed
are well within the bounds of the powers delegated to the Board and
do not call for any interference.
In
conclusion, it was submitted that similarly situated persons to the
petitioners had not been given differential treatment under the
CHALR 2004 or under the Notification No.30/2010 dated 8.4.2010, and
as such, there is no violation of any of the fundamental rights of
the petitioners including the rights guaranteed under the provisions
of Article 19(1)(g) or Article 14 of the Constitution. That, the
petitions being devoid of merit, deserve to be rejected.
In
rejoinder, Mr. K. S. Nanavati, learned Senior Advocate submitted
that the decision of the Madras High Court has been rendered in a
different set of facts and would not be applicable to the facts of
the present case. That the Madras High Court has directed the Board
to examine the issue and to come up with a Scheme for extending to
the petitioners therein the same benefits as conferred upon
similarly placed persons in Delhi, Punjab & Haryana, and in the
case of their failure, the Central Government should take
appropriate steps under section 161 of the Customs Act. That even
while rejecting the petition of the petitioners therein, the Court
was sensitive to the plight of the petitioners therein, and had
directed the CBEC to examine the issue and come up with a scheme for
extending to the petitioners therein the same benefits as conferred
on similarly situated persons in certain other States. Attention
was invited to the additional affidavit made by the petitioner of
Special Civil Application No.6152 of 2010, wherein it had been
pointed out that he had come across two entities in Jamnagar, who
despite being similarly situated, have been granted licence by the
Commissioner after the new regulations, that is, CHALR, 2004, came
into force. That these two entities had cleared Regulation 9
examination under CHALR, 1984 and regular licences were not issued
to them during that regime. As per the information of the
petitioner, the two entities were given licenses after CHALR, 2004
came into force while he as well as other similarly situated persons
were sought to be denied the same right.
Having
regard to the facts and circumstances of the case as well as the
rival contentions advanced on behalf of the respective parties, the
Court is of the view that it is possible to decide these petitions
without entering into larger controversy as to whether the Board is
empowered to prescribe for a qualifying examination for the grant of
Customs House Agent’s license, hence, the contentions raised in this
regard are not dealt with, leaving it open to the parties to agitate
the said issue in an appropriate case, if so required.
The
controversy involved in the present case is, therefore, as to
whether the action of the respondents in requiring the petitioners
to appear in the additional subjects prescribed under CHALR, 2004 is
arbitrary and discriminatory and as such, is violative of the
petitioners’ fundamental rights under Article 14 of the Constitution
of India.
On
a perusal of the provisions of CHALR, 1984, it is apparent that the
same provide for the Commissioner to invite applications for grant
of such number of licences as assessed by him to act as Customs
House Agent in the month of January every year in the area of his
jurisdiction for clearance work within the jurisdiction of the said
Commissioner. Regulation 5 of the said Regulations provides for
application for a licence to act as a Customs House Agent in a
customs station. Regulation 6 provides for the conditions to be
fulfilled by the applicant. Regulation 7 provides for scrutiny of
applications for licence received under Regulation 5 by the
Commissioner, and provides for making all inquiries for verification
of the particulars set out in the application as well as such other
inquiries as the Commissioner may deem necessary, including the
inquiries about the reliability and financial status of the
applicant. Regulation 8 makes provision for grant of temporary
licence. Under the said provision, the applicant whose application
is received within the last date specified in Regulation 4 and who
satisfies the requirements of Regulations 5 and 6, shall be
permitted to operate as Custom House Agent at the Customs station
for which the application is made, initially for a period of one
year and for such extended period in terms of the provisions of the
said regulation. Regulation 9 makes provision for examination of the
applicant, and provides that the holder of a temporary licence in
the case of an individual and the person or persons who will be
actually engaged in the work of clearance of goods through customs
on behalf of the firm or company holding a temporary licence, as the
case may be, shall be required to qualify in examination at the
earliest opportunity. Such person or persons shall be eligible to
appear in the examination as soon as a temporary licence is granted
and shall be permitted to avail of three chances within a period of
2 years from the date of issue of the temporary licence on payment
of prescribed examination fee for each examination. Regulation 9
also provides for the subjects in which the applicants are required
to clear the examination. Regulation 10 makes provision for grant of
regular licence to such holder of a temporary licence who qualifies
in an examination referred to in Regulation 9 and whose performance,
is found to be satisfactory with reference to the conditions
enumerated thereunder. Thus, under the Scheme of CHALR, 1984
initially upon receipt of an application to act as Customs House
Agent, provision was made for grant of a temporary licence upon
satisfaction of the requirements of Regulations 5 and 6, and a
holder of a temporary licence was required to appear in the
examination prescribed under Regulation 9 within the period
prescribed thereunder. A holder of a temporary licence, who
qualified in an examination referred to in Regulation 9 and whose
performance was found to be satisfactory with reference to the
conditions stipulated in Regulation 10, could be granted a regular
licence in Form “D” by the Commissioner on receipt of an
application in Form “C”.
Under
CHALR, 2004, Regulation 4 which is similarly worded to Regulation 4
of CHALR, 1984 provides for invitation of applications. Regulation 5
makes provision for application for licence and is also similarly
worded to Regulation 5 of CHALR, 1984. Regulation 6 of the CHALR,
2004 makes provision for conditions to be fulfilled by the
applicant. Regulation 7 makes provision for scrutiny of applications
for licence and is similarly worded to Regulation 7 of CHALR, 1984.
Whereas Regulation 8 of CHALR, 1984 which makes provision for grant
of temporary licence, has been done away with in CHALR, 2004.
Regulation 8 of CHALR, 2004 makes provision for examination of the
applicant, which is more or less in pari materia to
Regulation 9 of CHALR, 1984, except that the same provides for
certain additional subjects in respect of which questions may be
asked in the examination. Regulation 9 makes provision for grant of
licence in Form “B” to an applicant who has passed the
examination referred to in Regulation 8. Thus, the basic difference
between the two Regulations is, firstly, that in the new
Regulations, the provision for temporary licence has been done away
with and an applicant who has passed the examination referred to in
Regulation 8 is qualified to the grant of a licence to act as
Customs House Agent. The other difference is in the subjects in
relation to which the questions will be asked in the examination.
The additional subjects are the Patent Act, 1970, the Copyrights
Act, 1957, the Central Excise Act, 1944, the Prevention of
Corruption Act, Online Filing of Electronic Shipping Bills or Bills
of Entry and Indian Customs and Central Excise Electronic
Commerce/Electronic Data Interchange Gateway (ICEGATE) and Indian
Customs Electronic Data Interchange Systems (ICES) and instead of
the Imports & Exports Control Act, 1947, Foreign Exchange
Regulation Act, 1973, Opium Act, 1978 as prescribed under CHALR,
1984, in CHALR 2004, the Foreign Trade Development & Regulation
Act, 1993, the Foreign Exchange Management Act, 2000 and the
Narcotics Drugs & Psychotropic Substances Act have been
introduced.
Regulation
9 of CHALR, 2004 provides for grant of licence in Form “B”
to an applicant who has passed the examination referred to in
Regulation 9, however, the same does not specify as to what would be
the position of those candidates who have already cleared the
examination under Regulation 9 of CHALR, 1984. The preamble to
CHALR, 2004 provides for supersession of CHALR, 1984 “except
as respect things done or omitted to be done before such
supersession”.
The
Board vide clarification dated 10.6.2004, has clarified that those
who have not been granted licences under CHALR, 1984 till 23.4.2004
lose their right and have to meet the qualifications and pass the
examination under Regulation 8 of the CHALR 2004. Subsequently, by
virtue of the (Amendment) Regulations 2010, under Regulation 8 of
CHALR, 2004, sub-regulation (9) has been inserted, which provides
that any person who had passed the examination conducted in
Regulation 9 of the Customs House Agents Licensing Regulations,
1984, and has not yet been granted licence under the said
Regulations, upon declaring successful in a written examination
conducted on the subjects specified thereunder, shall be deemed to
have passed the examination referred to in Regulation 8 for the
purpose of CHALR 2004. Pursuant to the said amendment in the
Regulations, the Commissioner of Customs, Ahmedabad has issued
Public Notice No.26/2010-Customs calling upon the candidates who had
already qualified under Regulation 9 of CHALR, 1984, but have not
got Customs House Agent licence to appear in the Customs House Agent
examination in respect of additional subjects for the presently
prescribed course curriculum under CHALR 2004. The examination was
scheduled to be held on 15th July 2010.
The
main grievance ventilated in the present petitions is that the
petitioners along with others have qualified under Regulation 9 of
CHALR, 1984 for the grant of Customs House Agent licence. However,
on account of failure on the part of the concerned Commissioner in
inviting applications for grant of licence, the petitioners though
being qualified in all other respects, were not in a position to
obtain licences despite having made applications in this regard. Now
in view of the newly framed regulations, the petitioners are sought
to be discriminated against and are required to pass an examination
in additional subjects, whereas similarly situated persons who had
qualified under Regulation 9 of CHALR, 1984 and had already obtained
licences under the said Regulations, are not required to appear in
the said examination. According to the petitioners, they are
qualified under CHALR, 1984 on par with the licence holders who were
qualified under the said Regulations. When, the licence holders who
were granted the licences under CHALR, 1984 are not required to
appear in the additional subjects and are permitted to continue with
their old licences, and even in case of renewal of licence, they are
not required to appear in the additional subjects examinations, the
condition prescribed for the petitioners to appear in the
examination to qualify for getting Customs House Agent licence is
clearly arbitrary and discriminatory and as such, is violative of
the petitioners’ fundamental rights under Article 14 of the
Constitution of India.
In
this regard, it may be pertinent to note that those persons who had
acquired licences under CHALR, 1984 had passed the same qualifying
examination, namely, under Regulation 9 of CHALR 1984 similar to the
present petitioners who have been working as agents of licence
holders and are otherwise qualified for grant of licence. The only
difference between the petitioners and those persons holding licence
under CHALR, 1984 is that on account of failure on the part of the
concerned Commissioner to invite applications for grant of Customs
House Agent Licence, the petitioners were unable to get licences
prior to the coming into force of the new regulations, viz., CHALR,
2004. The petitioners are otherwise in all other aspects similarly
situated to the licence holders under the CHALR, 1984. The issue
that arises for consideration is as to whether the provisions of
CHALR, 2004 read with the (Amendment) Regulations, 2010 and the
clarification issued by the Board, requiring the petitioners to
appear in examination of additional subjects for the qualifying to
apply for a licence under CHALR, 2004 are arbitrary and
discriminatory so as to be violative of the petitioners’
rights under Article 14 of the Constitution.
In
the case of Union of India v. International Trading Co. and
another, (2003) 5 SCC 437, the Apex Court has held that
while the discretion to change the policy in exercise of the
executive power, when not trammeled by any statute is wide enough,
what is imperative and implicit in terms of Article 14 is that a
change in policy must be made fairly and should not give the
impression that it was done arbitrarily or by any ulterior criteria.
It
is a well settled principle of law that when a rule is challenged
as denying equal protection, the question for determination by the
court is not whether it has resulted in inequality but whether there
is some difference which bears a just and reasonable relation to the
object of the legislation. Mere differentiation or inequality of
protection does not amount to discrimination within the inhibition
of equal protection clause under Article 14 of the Constitution. To
attract the attention of the clause, it is necessary to show that
the selection of differentiation is unreasonable or arbitrary and
that it does not rest on any rational basis having regard to the
object which the legislature had in view. The court has to examine
whether the classification can be deemed to rest upon differentia
discriminating the persons or things grouped from those left out and
whether such differentia has a reasonable relation to the objects
sought to be achieved. (Dhan Singh v. State of
Haryana, 1991 Supp (2) SCC 190). It is also well settled
that the burden of establishing the reasonableness of the
classification and its nexus with the object of the legislation is
on the State. (B. Prabhakar Rao v. State of A.P., 1985
Supp SC 432)
In
State of Kerala v. N.M. Thomas, (1976)
2 SCC 310, it was held thus :
“24.
Discrimination is the essence of classification. Equality is violated
if it rests on unreasonable basis. The concept of equality has an
inherent limitation arising from the very nature of the
constitutional guarantee. Those who are similarly circumstanced are
entitled to an equal treatment. Equality is amongst equals.
Classification is, therefore, to be founded on substantial
differences which distinguish persons grouped together from those
left out of the groups and such differential attributes must bear a
just and rational relation to the object sought to be achieved.
31.
The rule of parity is the equal treatment of equals in equal
circumstances. The rule of differentiation is enacting laws
differentiating between different persons or things in different
circumstances. The circumstances which govern one set of persons or
objects may not necessarily be the same as those governing another
set of persons or objects so that the question of unequal treatment
does not really arise between persons governed by different
conditions and different sets of circumstances. The principle of
equality does not mean that every law must have universal
application for all persons who are not by nature, attainment or
circumstances in the same position and the varying needs of different
classes of persons require special treatment. The legislature
understands and appreciates the need of its own people, that its laws
are directed to problems made manifest by experience and that its
discriminations are based upon adequate grounds. The rule of
classification is not a natural and logical corollary of the rule of
equality, but the rule of differentiation is inherent in the concept
of equality. Equality means parity of treatment under parity of
conditions. Equality does not connote absolute equality. A
classification in order to be constitutional must rest upon
distinctions that are substantial and not merely illusory. The test
is whether it has a reasonable basis free from artificiality and
arbitrariness embracing all and omitting none naturally falling into
that category.
Testing
the facts of the present case on the anvil of the principles
enunciated in the aforesaid decisions, the undisputed facts are that
the petitioners herein have cleared the examination held under
Regulation 9 of CHALR, 1984 and were otherwise qualified for grant
of licence under the said Regulations subject to scrutiny of certain
conditions. The petitioners are also working in some capacity or the
other, whether as director, partner, power or attorney, etc. of
regular licence holders. Thus, for all practical purposes the
petitioners are holding qualifications equal to that of regular
licence holders and have been discharging similar duties. On behalf
of the respondents no other distinguishing feature has been pointed
out to indicate anything to the contrary. Thus, the petitioners were
discharging functions on par with the regular licence holders,
except the fact that as the concerned Commissionerates/Collectorates
did not invite applications as envisaged under Regulation 4 of the
Regulations, between the period since the petitioners cleared the
Regulation 9 examination and the coming into force of CHALR, 2004 on
supersession of CHALR, 1984, the petitioners were not in a position
to obtain regular licences as contemplated under Regulation 10 of
CHALR, 1984. By virtue of the provisions of CHALR, 2004 as amended
vide (Amendment) Regulations, 2010 the respondents have sought to
create two classes of persons, viz., those who have obtained
licences prior to the coming into force of CHALR, 2004 and those who
on account of failure on the part of the concerned Commissionerates
to invite applications under Regulation 4 of CHALR, 1984, though
qualified, could not obtain licences before the new Regulations came
into force. As noted hereinabove, the burden of establishing the
reasonableness of the classification and its nexus with the object
of the legislation is on the State.
To
establish the reasonableness of the classification and to explain
that the same has a valid nexus to the object sought to be achieved
by creating two classes, on behalf of the respondents it has been
stated that taking a decision to conduct written examinations for
persons, who had passed the Regulation 9 of CHALR, 1984, on the
additional subjects, is based upon the need to ensure same
competence and knowledge levels amongst successful applicants under
both the Regulations; that in the present scenario of electronic
filing of import and export documents in majority of Customs
Stations, majority of import documents are facilitated by Risk
Management System (RMS), and the rest of the documents are
scrutinized by the officers based upon the risk perception; such
facilitated documents do not get scrutinized by the Customs
Officers. Thus a lot of faith has been imposed on the Trade.
According to the respondents in such a situation the onus on the
Customs House Agents is much more to scrutinize the documents
properly, before filing and to advise their clients properly.
However, they can do this work more efficiently only if they are
competent enough to do so. The explanation sought to be put forth on
behalf of the respondents, however, fails to explain as to how the
petitioners are in any manner differently situated than the regular
licence holders who had qualified under CHALR, 1984, so as to be any
less competent than them. If those persons who had passed the
Regulation 9 examination under CHALR, 1984 and obtained regular
licences at the relevant time possess the competence to act as
regular licence holders, one fails to understand as to how, in
absence of any other distinguishing feature being pointed out, the
petitioners who too have passed the Regulation 9 examination under
CHALR, 1984 and have been discharging similar duties in different
capacities on behalf of the regular licence holders are any less
qualified or lack the competence that the said licence holders
possess. On an overall consideration of the facts of the case, the
State has neither been able to establish the reasonableness of the
classification nor its nexus with the object sought to be achieved
by the legislation. As to what is the basis and how is it reasonable
in differentially classifying equally qualified persons, merely on
the basis of those having obtained licences prior to the coming into
force of the new regulations and those who on account of failure on
the part of the concerned Commissioner to invite applications could
not get regular licences, is not coming forth. The nexus of such
classification, in requiring those who had passed the Regulation 9
examination but could not obtain licences, to appear in the
examination for the additional subjects, with the object sought to
be achieved is also not established inasmuch as those who had
already obtained licences earlier are not required to take the
examination. Thus, if those persons are competent to continue
holding licences and are entitled to renewal of licences under
CHALR, 2004, one fails to understand as to how similarly situated
persons are deemed to be not competent merely because they could not
obtain licences earlier for the reasons noted hereinabove, namely,
reasons beyond the control of the petitioners. Besides, in any field
over a period of time with advancement, new subjects are added to
the syllabus, but that does not mean that persons who have already
qualified under the old syllabus are no longer qualified, merely
because subsequently new subjects are added. Besides, once an old
enactment is repealed and is substituted by a new one, those dealing
with the same would normally acquaint themselves with the new
enactment, and one does not need to pass the qualifying examination
once again after having already qualified for the said purpose.
On
behalf of the respondents, it has been submitted that the persons
already holding Customs House Agent licences and the petitioners who
are yet to obtain a licence are two different classes of persons and
cannot be equated with each other; that the new subjects have been
introduced in the light of the recommendations of the Kelkar
Committee and that the additional subjects are based upon the need
to ensure the same competence and knowledge level amongst successful
candidates under both the Regulations. Thus, the object sought to
be achieved by the impugned (Amendment) Regulations, is to ensure
that the petitioners who had passed the qualifying examination under
CHALR, 1984 gain knowledge of the additional subjects as according
to the respondents, these were the subjects knowledge of which was
essential in case of all Customs House Agents and as such the same
has a direct nexus to the object sought to be achieved, namely, that
the Customs House Agents should be properly qualified. However, the
explanation put forth by the respondents fails to explain as to how
if the petitioners, because they have not passed examination in the
additional subjects, are not competent and qualified to obtain
licences under CHALR 2004, the licence holders who were already
holding licences prior to the new regulations coming into force are
qualified to continue with such licences.
In
the case of the petitioners, though they are similarly situated to
the licence holders under CHALR 1984, except for the fact that they
had not been granted licences as the concerned Commissionerate had
not invited applications, the petitioners are now sought to be
saddled with the liability to appear in the examinations to be
conducted in respect of additional subjects, whereas similarly
situated licence holders are not required to do so. If the case of
the respondents is to be accepted, namely, that the requirement of
the petitioners to appear in the additional subjects has a nexus
with the object sought to be achieved, one fails to understand as to
how the existing licence holders are not required to appear for the
same examinations in additional subjects. In case licence holders
are deemed to be qualified under the new regulations also for the
purpose of continuation and extension of licence, it is beyond
comprehension as to why the petitioners who are similarly situated
persons, except for the fact that they were unable to obtain
licences because the concerned Commissionerate did not invite
applications, are required to be treated differently. Thus, the
action of the respondents is, on the face of it, arbitrary and
discriminatory and as such, cannot be countenanced. The fact that
the petitioners, who though qualified under CHALR, 1984, due to no
fault of theirs’ could not obtain licences under the said
Regulations, are required to appear in the additional subjects when
other similarly qualified persons who had obtained licence under the
said Regulations are not required to appear in the said examination,
gives an indication that the same has no nexus to the object sought
to be achieved. If the object sought to be achieved was that all
Customs House Agents should have knowledge of the said subjects,
then there is no rationale behind making an exception in respect of
those persons who had already obtained licences under the old
Regulations from having to appear in the said examination. Thus,
submission that the classification is reasonable and has a nexus to
the object sought to be achieved does not merit acceptance.
Moreover,
it may be pertinent to note that the Board has issued instructions
on 31.10.2007 as well as 8.4.2010, calling upon the Commissionerates
to clear up backlog of pending requests by various applicants who
had qualified as per CHALR, 2004 for issue of licences which have
been held up by various Customs Commissionerates within a month and
send a compliance report to the Board. Thus, the instructions issued
by the Board are on the face of it contrary to the provisions of
Regulation 4 of the Regulations which vests in the Commissioner the
discretion as to when to invite applications and the number of
applications to be invited. In the circular dated 8.4.2010, the
Board has expressed the view that no restriction should be placed on
the number of Customs House Agents operating in the Custom Houses
and the market forces should govern the number of proficient and
qualified persons required to carry out the job of Customs House
Agent commensurate with the volume of import/export cargo. In the
circular dated 31.10.2007, the Board has instructed the
Commissionerates that irrespective of the norms prescribed by the
Board under CHALR, 1984, the concerned Commissioners of Customs
shall issue Customs House Agent licence to all those applicants who
had passed the Regulation 8 examination conducted under CHALR, 2004,
subject to their fulfillment of the requisite conditions as
mentioned in CHALR 2004. Thus, it is apparent that the respondents
are blowing hot and cold at the same time. When it comes to dealing
with the applications made by the petitioners despite the
Commissioners not having invited applications, it has been contended
on behalf of the respondents that in the light of the provisions of
Regulation 4, licences can be issued only as and when the concerned
Commissioner invites applications in respect of the same even if the
applicants may be qualified in all respects. Whereas, as regards
the persons who have qualified under CHALR, 2004, despite the fact
that Regulation 4 of the CHALR, 2004 also prescribes for
applications being invited by the concerned Commissioner and is in
pari materia to the provisions of Regulation 4 of CHALR, 1984,
the Board has thought it fit to override the said regulation and has
directed the Commissioners of Customs to clear the backlog of
pending applications by various applicants who had qualified as per
CHALR, 2004.
One
finds it difficult to comprehend as to how there were applicants
under CHALR, 2004 when the concerned Commissionerate had not invited
any applications in this regard. In fact, as can be seen from the
instructions dated 31.10.2004, not only has the Board directed the
Commissioners to clear the backlog of pending requests of various
applicants, who had qualified as per CHALR 2004, for issue of
licences, within a month but also to send a compliance report to the
Board. Thus, the treatment meted out to the petitioners herein is
on the face of it discriminatory inasmuch as upon applications made
by the petitioners, they are told that the same would be subject to
concerned Commissioner inviting applications under Regulation 4,
whereas in respect of those applicants who have qualified as per the
new regulations, general directions have been issued to
Commissionerates to grant licences to them within a period of one
month. As pointed out on behalf of the petitioners two persons have
already been granted licences in Jamnagar after the coming into
force of CHALR, 2004 and several persons in other States have also
been granted licences under the new regime. In the circumstances,
the action of the respondents is clearly arbitrary and
discriminatory and violative of the petitioners’ fundamental
rights under Article 14 of the Constitution of India and as such
cannot be sustained.
For
the foregoing reasons, the petitions succeed and are, accordingly,
allowed. The Customs House Agents Licensing (Amendment) Regulations,
2010 issued vide Notification No.30/2010 dated 8.4.2010, insofar as
the same impose a condition upon those persons who had passed the
examination conducted under Regulation 9 of the Customs House Agents
Licensing Regulations, 1984 and have not been granted licence under
the said Regulations, to clear the examination in additional
subjects to be deemed to have passed the examination referred to in
Regulation 8 for the purpose of Customs House Agents Licensing
Regulations 2004, is hereby quashed and set aside. Consequently, the
petitioners are entitled to be considered for grant of Customs House
Agent licences without having to clear the examination in the
additional subjects. In the light of the instructions issued by the
Board in respect of the applications made by the applicants who had
qualified as per Customs House Agents Licensing Regulations 2004,
the respondent No.3 is directed to dispose of the
applications/pending applications of the petitioners for grant of
licences treating the petitioners on a par with the applicants who
have qualified under CHALR, 2004, subject to their fulfilling other
requirements under the Regulations. Rule is made absolute
accordingly with no order as to costs.
In
the light of the order made in the main petition, Civil Applications
No.5891 and 5892 of 2010 praying for stay of the impugned
notification do not survive and are, accordingly, disposed of.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
At
this stage, on behalf of the respondents, a request has been made for
staying the operation of the judgment by Mr.R.M.Chhaya, learned
Senior Standing Counsel. Considering the request made by the learned
counsel, the operative part of the judgement, except to the extent
indicated hereinafter, is stayed for a period of eight weeks from
today. The direction to the respondent No.3 to dispose of the
applications of the petitioners for grant of licence shall continue
and the grant of licence, if any, shall be subject to the final
outcome of any proceedings preferred against the present judgement.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
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