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1975 DIGILAW 222 (KER)

Lakshmana Achari v. Assistant Collector Of Central Excise Trivandrum

1975-09-04

K.K.NARENDRAN

body1975
JUDGMENT K.K. Narendran, J. 1. The petitioner in this original petition hails from the Viswakarma Community whose traditional occupation is that of a goldsmith. The petitioner grievance is against Exts. P-2, P-3 and P-5 orders by which he is denied a dealer licence under the Gold (Control) Act, 1968 (for short, the Act). The two questions that arise for consideration in this original petition are: (1) whether for the issue of a dealer licence under section 27 (6) of the Act read with rule 2 of the Gold Control (Licensing of Dealers) Rules, 1969 (for short, the Rules) the applicant should have actual experience as a dealer in ornaments and (2) whether the application for licence as a dealer made in a particular year lapses on the expiry of that year. 2. The petitioner applied for a licence as a dealer in ornaments under section 27 (6) of the Act on 1st September 1970 to the 1st respondent Assistant Collector of Central Excise, Trivandrum. Ext. P-1 is a copy of the covering letter submitted by the petitioner along with his application. The facts that the petitioner belongs to the Viswakarma Community and that he has experience as a goldsmith from the age of 14 and is well-versed in the art were all stated in Ext. P-1. But the 1st respondent by Ext. P-2 order dated 15th March 1971 dismissed the petitioner application. The three reasons stated in Ext. P-2 are that the petitioner was not a dealer previously, that he obtained a goldsmith certificate only in 1969 and that there was absolutely no need to increase the number of dealers. From Ext. P-2 order the petitioner filed an appeal before the 2nd respondent Collector of Customs and Central Excise, Cochin. But by Ext. P-3 order the 2nd respondent on 28th September 1971 dismissed the petitioner appeal. Thereupon, the petitioner submitted Ext. P-4 revision petition to the 3rd respondent Union of India. Ext. P-4 also met with the same fate and the 3rd respondent by Ext. P-5 order dated 10th April 1973 dismissed Ext. P-4 on the ground that the number of gold dealers in Alleppey was sufficient to meet the demand for gold ornaments and hence there was no need to grant a further licence. It was under the above circumstances that the petitioner has approached this Court with this original petition. 3. P-5 order dated 10th April 1973 dismissed Ext. P-4 on the ground that the number of gold dealers in Alleppey was sufficient to meet the demand for gold ornaments and hence there was no need to grant a further licence. It was under the above circumstances that the petitioner has approached this Court with this original petition. 3. A counter-affidavit*has been filed on behalf of respondents 1 to 3. In para 3 of the counter-affidavit the dates of applications and the dates of issue of licences to certain persons made mention of in the original petition are given. The dealer turnover of gold for the three years preceding the- receipt of the petitioner application has been given in para 4 of the counter-affidavit. The allegation of discrimination made in the original petition is denied in para 5. On 13th March 1975 an additional counter affidavit was filed on behalf of respondents 1 to 3 and para 2 of the above additional counter-affidavit reads: "It is submitted that normally all applications for licence for dealing in gold under the Gold Control Act is applied only for a period of one year. In this particular case the petitioner has specifically stated in his application that the licence is only for the period ending 31st December, 1970. The period is now over and the original petition is therefore infructuous and therefore no remedy can be given to him."� The petitioner on 31st March 1975 filed a reply affidavit to answer the contentions raised in the additional counter -affidavit. It is stated in para 2 of the reply affidavit that the practice followed in the department throughout is against the contention raised in the additional counter-affidavit. It is pointed out in para 2 that there has been no instance of any application for licence rejected merely on the ground that the year to which the application pertained, expired. The petitioner also submitted C.M.P. 4896 of 1975 for a direction to the respondents to produce before court details of all the licences issued in India under the Act after it was enacted, namely, the year to which the application related, the date on which the licence was granted and the period to which it was granted. The petitioner also submitted C.M.P. 4896 of 1975 for a direction to the respondents to produce before court details of all the licences issued in India under the Act after it was enacted, namely, the year to which the application related, the date on which the licence was granted and the period to which it was granted. The respondents did not produce before court any material as requested by the petitioner in the above C.M.P. on the ground that it is practically impossible to produce those records. 4. When the original petition came up reposted on 14th August 1975, learned counsel for the petitioner submitted that he is not pressing the grounds raised on the basis of Articles 14 and 19 of the Constitution of India. The petitioner contentions on the strength of Articles 14 and 19 are not considered in this judgment and no relief is granted on the basis of those contentions. 5. Sri T. L. Viswanatha Iyer, learned counsel for the petitioner, contends that the petitioner cannot be denied a licence under section 27 (6) of the Act read with rule 2 of the Rules. The petitioner has the necessary qualifications. The petitioner cannot be denied a licence on the ground that the turnover of gold is too meagre for granting fresh licences because licences were issued to persons who applied for the same after the petitioner submitted his application, Sri Viswanatha Iyer also contends that the petitioner application cannot be rejected as infructuous since the year in which he applied for the licence has expired. It is pointed out that in a number of cases the 1st respondent has actually issued licences after the expiry of the year in which the applications were made. Sri Viswanatha Iyer submits that a licence when issued will be for the year in which it is issued even though the application might have been submitted in the previous year and the request in the application was for the issue of licence for that year. Sri Viswanatha Iyer refers to sections 2 (A) and 27 (6) of the Act and rule 2 (b) and (f) of the Rules. Sri Viswanatha Iyer refers to sections 2 (A) and 27 (6) of the Act and rule 2 (b) and (f) of the Rules. Section 2 (h) of the Gold (Control) Act, 1968 reads: "dealer means any person who carries on, directly or otherwise, the business of making, manufacturing, preparing, repairing, polishing, buying, selling, supplying, distributing, melting, processing or converting, gold, whether for cash or for defferred payment or for commission, remuneration or other valuable consideration, and includes" (i) a Hindu undivided family which carries on such business; (ii) a local authority, company, society registered under the Societies Registration Act, 1360 (21 of I860), co-operative society incorporated under any law with respect to co-operative societies, club, firm or other association of persons which carries on such business, or (a) buys or accepts gold (for the purpose of making ornaments) from, (b) makes, manufactures, prepares, repairs or polishes ornaments for, (c) processes, melts or converts gold (for the purpose of making ornaments) for, (d) sells, supplies or distributes ornaments or other gold (for the purpose of making ornaments to, its members; (iii) a commission agent, broker, del credere agent, auctioner or other mercantile agent, by whatever name called, who carries on such business on behalf of any principal, but does not include the Reserve Bank of India, the State Bank of India, any subsidiary bank as defined in clause (k) of section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), In so far as such bank sells or transfers, or exhibits for sale or transfer, any gold. Explanation. Explanation. For the purposes of this Act (a) every person who acts as an agent of a dealer residing outside India and carries on the business of such dealer in India or acts on behalf of such dealer as (i) a mercantile agent as defined in the Sale of Goods Act, 1930 (3 of 1930), or (ii) an agent for handling gold or documents of title relating to gold, or (iii) an agent for the collection or 'payment of sale price of gold or as a guarantor for such collection or payment; and (b) every branch in India of a firm or company having its registered office outside India, if such firm or company is a dealer, shall be deemed to be dealer;"� Section 27 (6) of the Act reads; "27. Licensing of dealers. (1) Save as otherwise provided in this Act, no person shall commence, or carry on business as a dealer unless he holds a valid licence issued in this behalf by the Administrator. (3) (4) (5) (6) (a) No application for the issue of a licence to commence or carry on business as a dealer shall be granted unless the Administrator, having regard to such matters as may be prescribed in this behalf and after making such enquiry in respect of those matters as he may think fit, is satisfied that the licence should be issued. (b) No application for the renewal of a licence to carry on business as a dealer shall be rejected unless the holder of such licence has been given a reasonable opportunity of presenting his case and unless the Administrator is satisfied that (i) the application for such renewal has been made after the expiry of the period specified therefor, or (ii) any statement made by the applicant at the time of the issue or renewal of the licence was incorrect or false in material particulars, or (iii) the applicant has contravened any term or condition of the licence or any provision of this Act, or any rule or order made thereunder or of any other law for the time being in force in so far as such law prohibits or restricts the bringing into or taking out of India of any goods (including coins, currency, whether Indian or foreign, and foreign exchange) or the dealing in such goods by way of acquisition or otherwise; or (iv) the applicant does not fulfil the prescribed conditions. (c) Every order granting or rejecting an application for the issue or renewal of a licence shall be made in writing. (6A) (7) (8) (sub-sections which are not relevant for the purpose of the case are omitted). " Rule 2 (b) and (f) of the Gold Control (Licensing of Dealers) Rules, 1969 reads: 2. (c) Every order granting or rejecting an application for the issue or renewal of a licence shall be made in writing. (6A) (7) (8) (sub-sections which are not relevant for the purpose of the case are omitted). " Rule 2 (b) and (f) of the Gold Control (Licensing of Dealers) Rules, 1969 reads: 2. Matters to which regard shall be had before issuing a licence .On receipt of an application for the issue of a licence to commence or carry on business as a dealer, the Administrator shall have regard to the following matters, namely: (a) (£) the experience of the applicant with regard to the dealing in, or making, manufacturing, preparing, repairing or polishing of ornaments; (c) (d) (e) (f) the need to increase the number of licensed dealers in the city or town in which the dealer intends to carry on business or where the applicant intends to carry on Business in a village, the need to increased the number of licensed dealers in the district within such village is situated, having regard to (i) the number of licensed dealers existing in such city, town or district, as the case may be, and (ii) the demand for ornaments which is likely to arise in such city, town or district, such demand being estimated on the basis of the turnover of the licensed dealers, existing therein, for a period of there years preceding the year in which such application for the issue of licence has been made and such turnover shall be determined on the basis of the accounts and returns submitted under the law for the time being in force in relation to gold. Sri Viswanatha Iyer points out that a renewal is automatic and renewal can be refused only on the grounds mentioned in sub-clauses (i) to (iv) of clause (b) of sub-section (6) of section 27 of the Act. It is than contended that actual experience as a dealer under the Act is not necessary because as per rule 2 (b) of the rules, experience as a goldsmith is sufficient qualification. Sri Viswanatha Iyer then contends that there is no justification in reading the word or used in the rule as and and refers to Prem Math v. Union of India A.I.R. 1973 All. Sri Viswanatha Iyer then contends that there is no justification in reading the word or used in the rule as and and refers to Prem Math v. Union of India A.I.R. 1973 All. 182 where in construing rule 2 (b) of the rules the Court said: "It is true that in certain cases, in order to effectuate legislative intention and the purposes for which the enactment is made, the expression or may be read as and and the provisions of the Act or Rule be interpreted accordingly, but in this case I find no justification for not giving normal meaning to the word or as used in rule 2 (b). I am accordingly of opinion that the Assistant Collector, Central Excise was not right in throwing out petitioner application for grant of Gold Dealer licence for carrying out the business of purchase and sale of gold ornaments, on the ground that he did not have experience of making, manufacturing, preparing, repairing or polishing of ornaments."� Sri Viswanatha Iyer also relies on a decision of this Court in Hariharaputhra Pillai v. Assistant Collector of Central Excise, Trivandrum O.P. No. 1345 of 1971 wherein my learned brother Subramonian Poti, J. has said: "Clause (b) of rule 2 requires that one of the matter that the Administrator was to consider in the matter of an application for the issue of a licence is the experience of the applicant with regard to the dealing in, or making, manufacturing, preparing, repairing, or polishing of ornaments. It is not as if any applicant should have experience in all these. He may himself be an artisan who has experience in making or manufacturing of ornaments. He may be, though not directly carrying on such work, dealing in ornaments. The experience that is required is necessarily not as the owner of a business. Association with the business which would acquaint a person in the matters referred to in the sub rule is what is contemplated. To read it otherwise would be to say that a man who owns a business can alone commence it, which on the face of it appears to be ridiculous. Fresh entrants who have the qualifications prescribed or qualifications relevant in the matter cannot be precluded from commencing their business. If the rule be otherwise then it will be subject to the vice of infringing the fundamental right of carrying on the business. Fresh entrants who have the qualifications prescribed or qualifications relevant in the matter cannot be precluded from commencing their business. If the rule be otherwise then it will be subject to the vice of infringing the fundamental right of carrying on the business. The relevant rule as I read it only requires that a man who has no experience in the line should not be considered favourably as an applicant. If the experience that is contemplated is the association with the business and acquiring experience by that process in one or other of the matters mentioned in the sub rule I fail to see how the petitioner could be said to be inexperienced unless it be that respondents chose to disbelieve the petitioner case."� It is also pointed out that as per section 2 (h) of the Act, one who makes ornaments is also included in the definition of dealer.-Sri Viswanatha Iyer has cited a number of decisions in support of his contention that, by the expiry of the year for which the petitioner applied for the licence, his application will not become infructuous. In J. C. C. of Imports and Exports v. M/s Aminchand A.I.R. 1966 SC 478 a case which arose from the refusal of an import licence under Imports and Exports (Control) Act, 1947, the Supreme Court observed: "The licensing authority, therefore, has to deal with the application for licence on the basis that the approved quotas were given to the partners of the dissolved firm from the date of the agreement and cannot refuse the licence only on the ground that the approval was granted after the import period had expired."� In Sha Maggajee and Bros. v. Joint C.C. of Imports and Exports A.I.R. 1966 Mad. 309 Srinivasan, J. of the Madras High Court has said: "The rights of the established importer to the licence for the back periods cannot be denied if his application had been kept pending for reasons other than laches on the part of the applicant. v. Joint C.C. of Imports and Exports A.I.R. 1966 Mad. 309 Srinivasan, J. of the Madras High Court has said: "The rights of the established importer to the licence for the back periods cannot be denied if his application had been kept pending for reasons other than laches on the part of the applicant. An application for import licence for a particular period must be considered only in the light of the policy relevant to that period and cannot be refused on the basis of a later policy which might have changed the position with regard to the licences for the import of the item applied for."� In Hans Raj v. Excise Commissioner A.I.R. 1970 Delhi 107 rejecting a preliminary objection that the grant of a liquor licence is a grant from year to year and the licence having expired on 31st March 1968 the writ has become infructuous, the Delhi High Court said : "It is true that a licence under the Delhi Excise Act is a licence which is granted for the period 1st April in any year to 31st March in the subsequent year but it is not correct, in our opinion, to say that there is always a fresh grant of a licence. Rule 5.10 of the Delhi Liquor Licence Rules talks of the renewal of a licence and so does section 43 of the Act. In fact also, it appears that the L-2 licence which was granted by the authorities in the beginning has been renewed from year to year. It cannot, therefore, be said that the rights of the holder of a licence are terminated completely upon the expiry of the annual term. The Act and the rules contemplate renewal of the very same licence and that being so, we do not find any substance in this preliminary objection."� Sri Viswanatha Iyer points out that the actual practice in the department also is that renewals are granted long after the expiry of the period. 6. Sri Ratna Singh, learned Central Government Pleader, contends that rejection of the petitioner application for a licence by the 1st respondent-Assistant Collector of Central Excise, Trivandrum by Ext. P-2 order was in order and it does not call for any interference by this Court. The 1st respondent was not satisfied about the petitioner experience. 6. Sri Ratna Singh, learned Central Government Pleader, contends that rejection of the petitioner application for a licence by the 1st respondent-Assistant Collector of Central Excise, Trivandrum by Ext. P-2 order was in order and it does not call for any interference by this Court. The 1st respondent was not satisfied about the petitioner experience. As the petitioner had no gold business previously, he had no previous experience in the business. The turnover of business in ornaments in Alleppey did not justify the issue of any more licences and hence the rejection of the petitioner application was justified on that ground also. Sri Ratna Singh then contends that as the year for which the licence was applied for has expired, the petitioner application has become infructuous. In support of this contention, Sri Ratna Singh has relied on a decision of Jagannatha Shetty, J. of the Mysore High Court in Sheshagiri Narayan Netalkar v. Assistant Collector of Central Excise, Bellary (W.P. No. 2597 of 1971) wherein the learned Judge has said: "It is true that the orders of the Collector and the Central Government are not at all satisfactory, nor they satisfy the requirements of quasi-judicial determination of disputed facts and law, but there is no purpose in setting aside those orders in this writ petition, though Mr. Krishnaswamy Rao, learned counsel for the petitioner vehemently contended that they should be set aside. The licence is to be obtained every year. The petitioners application for the grant of licence for the year 1969 was already dismissed. There is, therefore, no purpose in directing the authorities to consider that application because that year is already over. If he wants licence for the year 1973 or 1974, he must make a fresh application and if he makes one, the authority has to consider and dispose of the application in accordance with law. It is open to the petitioner to prove that due to the ever-increasing demand for gold ornaments, there is justification for the grant of licence to him. If the petitioner makes an application, it shall be disposed of immediately."� It is also contended that even if a renewal of a licence is automatic, the issue of a licence cannot be automatic. If the petitioner makes an application, it shall be disposed of immediately."� It is also contended that even if a renewal of a licence is automatic, the issue of a licence cannot be automatic. Sri Ratna Singh relies on State of Mysore v. C. R. Seshadri A.I.R, 1974 S.C. 460 and contends that this Court cannot grant a licence to the petitioner and that matter has to be left to the Assistant Collector of Central Excise. In the above case, Krishna Iyer, J. speaking for the Court has said: "The power to promote an officer belongs to the Executive and the judicial power may control or review Government action but cannot extend to acting as if it were the Executive. The Court may issue directions but leave it to the Executive to carry it out. The judiciary cannot promote or demote officials but may demolish a bad order of Government or order re-consideration on correct principles."� 7. Sri Viswanatha Iyer replying to the arguments of Sri Ratna Singh contends that if all the conditions for the issue of a licence are satisfied, a licence cannot be refused to the petitioner arbitrarily. It is contended that the turnover of the business in ornaments in the Alleppey District at the time when the petitioner applied for a licence justifies the grant of further licences. As a licence has been granted to one Sreedharan Nair who applied for a licence after the petitioner applied for the same, the petitioner cannot be denied a licence on the ground of turnover. It is also pointed out that no satisfactory explanation has been given for granting a licence to the said Sreedharan Nair in preference to the petitioner. Sri Viswanatha Iyer also points out that the only ground on which the 3rd respondent has refused to interfere with Ext. P-2 order of the 1st respondent- Assistant Collector of Central Excise refusing a licence to the petitioner is that the turnover of existing dealers in Alleppey in 1970 when the petitioner applied for the licence was too meagre. Sri Viswanatha Iyer also emphasises the fact that want of sufficient experience on the part of the petitioner taken as a ground in Ext. P-2 order by the 1st respondent has not been taken as a reason for denying the petitioner a licence by the 3rd respondent. Sri Viswanatha Iyer also emphasises the fact that want of sufficient experience on the part of the petitioner taken as a ground in Ext. P-2 order by the 1st respondent has not been taken as a reason for denying the petitioner a licence by the 3rd respondent. Moreover, the fact that the 3rd respondent disposed of the petitioner revision in April 1973 on the merits militates against the contention of the Central Government Pleader that the application became infructuous on the expiry of the year for which the licence was applied for. Sri Viswanatha Iyer then relies on Dwarka nath v. I. T. Officer A.I.R. 1966 SC 81 and contends that this Court has ample powers under Article 226 of the Constitution to interfere in a matter like this where a real injustice has been done to the petitioner. In the above decision, Subba Rao, J. (as he then was) speaking for the Court has said: "This article is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the natures of the power, the purpose for which and the person or authority against whom it can be exercised. It can issue writs in the nature of prerogative writs as understood in England; but the scope of those writs also is widened by the use of the expression nature, for the said expression does not equate the writs that can be issued in India with those in England, but only draws an analogy from them. That apart, High Courts can also issue direction, orders or writs other than the prerogative writs. It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this country."� 8. There is considerable force in the contentions of Sri Viswanatha Iyer. Grant of a gold dealer licence is controlled by section 27 (6) of the Gold (Control) Act, 1968 read with rule 2 of the Gold Control (Licensing of Dealers) Rules, 1969. Experience under rule 2 (b) of the rules need not be experience as a dealer as such. So, a licence cannot be refused on the ground that the applicant was never a dealer. Moreover, one can become a licensed dealer only after getting a licence. Experience under rule 2 (b) of the rules need not be experience as a dealer as such. So, a licence cannot be refused on the ground that the applicant was never a dealer. Moreover, one can become a licensed dealer only after getting a licence. There is no reason why the word or in rule 2 (b) be read as and. An applicant need be experienced in dealing in, or making, manufacturing, preparing, repairing or polishing ornaments. A goldsmith is one who makes ornaments. The petitioner who has been working as a goldsmith from the age of 14 and who possesses a goldsmith certificate cannot be denied a licence for want of experience. No doubt, the number of licences can be restricted on the basis of the demand for ornaments. But when a licence is granted to one who submitted an application subsequently, the same cannot be denied to one who submitted an application earlier, on the ground of want of demand for ornaments. An application cannot be rejected simply because the year for which the licence was applied for has run out. The decision of the question whether the applicant was entitled for a licence cannot in any way be influenced by the fact that the year for which the licence was applied for was over. This is all the more so since there is provision for renewal of the licence from year to year and a renewal cannot be arbitrarily denied. With great respect to the learned Judge of the Mysore High Court who decided W.P. No. 2597 of 1971 referred to earlier in this judgment, I express my inability to rely on that decision. 9. In the result, I quash Exts. P-2, P-3 and P-5 and direct the 1st respondent-Assistant Collector, Central Excise, Trivandrum to pass fresh orders on the petitioner application dated 1st September 1970 in the light of what is stated above. Fresh orders are to be passed within three months from today. The original petition is allowed to the above extent. There will be no order as to costs.