JUDGMENT P. Subramonian Poti, J. 1. The Gold (Control) Act, 1968 provides, in section 27, that save as otherwise provided in the 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. “Dealer� is defined in section 2 (h) of the Act as a 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 deferred payment or for commission, remuneration or other valuable conside­ration. Section 27 (6) of the Act deals with the issue of licence. That sub-section reads: “(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.� 2. The Gold Control (Licensing of Dealers) Rules, 1969 has been framed in exercise of the powers conferred by section 114 read with sub-section (6) of section 27 of the Gold (Control) Act, 1968. Matters to which regard is to be had in issuing licences are enumerated in rule 2 of the Rules. That rule reads: “2. The Gold Control (Licensing of Dealers) Rules, 1969 has been framed in exercise of the powers conferred by section 114 read with sub-section (6) of section 27 of the Gold (Control) Act, 1968. Matters to which regard is to be had in issuing licences are enumerated in rule 2 of the Rules. That rule 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) whether the application has been made in the prescribed form and the prescribed fees have been duly deposited; (b) the experience of the applicant with regard to the dealing in, or making, manufacturing, preparing, reparing or polishing of ornaments; (c) whether the premises where the applicant intends to carry on business as a licensed dealer is suitable and secure for the carrying on of such business; (d) whether any licence previously held by the applicant had been cancelled under any law for the time being in force; (e) whether the applicant has been convicted of an offence, or any penalty has been imposed on him, under— (i) the Gold (Control) Act, 1968, or (ii) any other law for the time being in force relating to gold, or (iii) any other law for the time being in force in so far as such law prohibits, restricts or regulates 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; (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 increase 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 three 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.� It may be seen from the said rule that in the case of a dealer applying for a licence to carry on business in a city or town one of the matters relevant in considering the grant of the licence is the need to increase the number of licensed dealers in the city or town in which the dealer intends to carry on business. This need is to be determined having regard to the (1) number of licensed dealers existing in such city and (2) the demand for ornaments which is likely to arise in such city or town. The rule further provides that the demand is to be determined on the basis of the turnover of the licensed dealers for a period of three years preced­ing the year in which such application has been made. It goes without saying that the insistence upon the possession of a licence for the purpose of carrying on business is a res­triction on the exercise of an avocation and therefore any rule which imposes such a restriction will have to be sub­jected to the test of reasonableness. The regulation of the issue of licences on the basis of demand for the goods in which the dealer is to carry on business may be said to be a reasonable restriction. Therefore the provision in rule 2 (f) that the grant of licence would depend upon the need to increase the number of licensed dealers may be a reasonable provision. The rule indicates the method to determine the need for increase in the number of licensed dealers. The turnover in the particular article, gold ornaments in this case, at the time of the application may be quite a relevant factor, for, it is such demand that should determine the grant of further licences. That would naturally be related to the number of dealers. It may not be possible to deter­mine the turnover in a particular year without sufficient data and the rule has chosen to rely upon the turnover for the 3 previous years for the purpose of making the estimate of the turnover of the year in which the application is made. If in the three years there has been progressive increase in the turnover and there are no circumstances which would warrant the assumption of a different course of events during the year in question, it would be normal to expect a similar progressive increase in the year in which the application is made. If, on the other hand, there has been progressive reduction in the turnover, that again will be relevant in determining the turnover for the year in which the application is made. If, on the other hand, there has been progressive reduction in the turnover, that again will be relevant in determining the turnover for the year in which the application is made. But in order to relate such turn­over to the grant of fresh licence, it is not sufficient to ascertain the number of licensed dealers existing on the date of the application. The question as to the quantum of turn­over which would justify the operation by a dealer must also be known. In other words, the number of dealers and the total turnover can be related to each other only if the esti­mate is made of the requirement of turnover to justify the licence for one dealer. 3. When an application is made to the Administrator under the Gold (Control) Act in accordance with the pro­visions of the Gold Control (Licensing of Dealers) Rules, the Administrator, in granting or refusing the application, must necessarily have an objective approach to the matters mentioned in rule 2. I say ‘objective’ because it is not suffi­cient for him merely to notice the turnover of the 3 pre­vious years and the number of dealers operating, but he must further objectively approach the question whether, on the basis of the turnover estimated for the year in which the application is made the number of dealers existing in the city then would be sufficient. In other words, he must be able to assess what would be the number of dealers that could exist as licensed dealers in a city or town on the basis of a specific estimated turnover. Once that is determined by him, it is easy to grant or refuse the application. That determination calls for consideration of the question as to how much turnover must be taken as the average turnover required for licensing a dealer, a matter on which I rarely find consideration bestowed by the Administrator in cases such as the one before me and that is what has prompted me to preface my judgment with these observations. 4. The petitioner in this case was a partner of a firm by name “Ellar Jewellery� which had been a licensed dealer under the Gold (Control) Act, 1968 from 1962. The firm was dissolved on 1st March 1970. After the dissolution the petitioner applied for the issue of a gold dealer’s licence in his name to enable him to deal in gold. The firm was dissolved on 1st March 1970. After the dissolution the petitioner applied for the issue of a gold dealer’s licence in his name to enable him to deal in gold. This was on 16th December 1970. The other partner of the dissolved firm applied for similar licence and he was granted such licence. But it is seen from the counter-affidavit that he did not continue the business. 5. The petitioner’s application was not granted. By Ext. P-1 order the Assistant Collector who is the licensing authority under the Act rejected the application on the ground that there are 39 licensed dealers in Trivandrum city and this number is more than sufficient to meet the demand for gold ornaments in and around the city. The petitioner’s application was for licence to carry on business in Trivandrum city. The ground therefore was that there was no need to increase the number of licensed dealers in the Trivandrum city then. 6. The petitioner took up this matter in appeal before the Collector of Customs and Central Excise who is the appellate authority. The matter was disposed of by the appellate authority by Ext. P-3 order dated 5th January 1972. Ext. P-1 was set aside by Ext. P-3 order and this was on the ground that the Assistant Collector had not con­sidered all the points which were required to be considered before issue of a dealer’s licence. The Assistant Collector reiterated what he said earlier, in his fresh order, Ext. P-4. The petitioner was found to have sufficient experience in gold business. The premises where the applicant intended to carry on business was found to be suitable and secure for gold business. No licence previously held by the applicant was found to have been cancelled. The petitioner had not been penalised for any offence under any law mentioned in rule 2 (e) of the Gold Control (Licensing of Dealers) Rules, 1969. The applicant was therefore found to be qualified for the issue of a licence. All the same the application was rejected on the ground that “there is absolutely no need to increase the number of dealers in Trivandrum city at present�. Again the matter was taken up in appeal before the Collector of Customs, who, by Ext. P-6 order, upheld the order of the Assistant Collector. All the same the application was rejected on the ground that “there is absolutely no need to increase the number of dealers in Trivandrum city at present�. Again the matter was taken up in appeal before the Collector of Customs, who, by Ext. P-6 order, upheld the order of the Assistant Collector. It is seen that at the hearing it was submitted by the petitioner’s represen­tative that one N. Subramonia Pillai of Trivandrum whose case also stood on the same footing as that of the appellant (petitioner here) had been granted licence, which could not have been the case had there been no need for increase in the number of licensed dealers in the Trivandrum city. Referring to this the appellate authority said that the application of Sri Subramonia Pillai is seen to have been filed earlier than that of the appellant. He also found that other licences had been issued in Trivandrum city but those were cases where the Assistant Collector, having regard to the matters specified in rule 2 of the Rules, was satisfied that the licences should be issued. The appellate authority simply reiterated the statement of the Assistant Collector that the turnover of gold business for the three years preceding the year in which the licence was sought for by the appellant did not justify any increase in the number of gold dealers. The appeal was rejected. 7. The petitioner has attacked Ext. P-4 order as con­firmed by Ext. P-6 for several reasons. He refers to the laconic statement in Ext. P-4. The satisfaction of the licensing authority, it is contended, must be objective but Ext. P-4 does not show any such objective satisfaction. The petitioner’s case is that the licensing authority must estimate the demand for the ornaments and the need to increase the number of licensed dealers and it is not sufficient merely to state that there is no need. 8. The orders Ext. P-4 and Ext. P-6 do not state the facts which would justify the conclusion reached by the authorities concerned. There is no reference to the turnover for the three relevant preceding years, the number of dealers justified by such turnover and the turnover estimated for the year in which the application was made and further the number of dealers that would be justified by such turnover. Such a consideration is necessary. There is no reference to the turnover for the three relevant preceding years, the number of dealers justified by such turnover and the turnover estimated for the year in which the application was made and further the number of dealers that would be justified by such turnover. Such a consideration is necessary. When the orders are attacked in this court on the plea that the fundamental right of the petitioner to practice a business or avocation has been infringed, it is the duty of the respondents to place before this court all the materials on which they had relied in taking the decision. In other words, even if an objective approach is not evident from the order itself there must be an attempt in this court to support the order by placing before this court the mate­rials on which such objective approach was made. The counter-affidavit of respondents 1 and 2 does not refer to any such facts, but only reiterates what has been said in Exts.P-4 and P-6 orders and therefore serves no purpose whatsoever. Time was taken by learned counsel for the respondents to place before me the relevant file to indicate that in spite of silence in regard to these matters in the orders Exts.P-4 and P-6, these orders are supportable by material available in the file, on the basis of which the decision had been reached. Having gone through the file I find the only material on which the decision was based was the report dated 28th December 1972 of the Assistant Collector to the appellate authority which shows the figures of turnover of four years. They are: 1968 : 71,951.029 grams 1969 : 1,43,303.488 � 1970 : 1,91,203.448 � 1971 : 2,30,062.901 � The number of licensed dealers in the Trivandrum city is noted as 39. There is an extract from a statement also available in the file which shows that the number of licensed dealers in the Trivandrum city in the respective years, 1968 to 1971, were 37, 39, 39 and 39 respectively. 9. The figures noticed above show that there has been a steep increase in the turnover of gold ornaments in the city between the years 1968 and 1971. In fact between these years the turnover has increased by more than three times. 9. The figures noticed above show that there has been a steep increase in the turnover of gold ornaments in the city between the years 1968 and 1971. In fact between these years the turnover has increased by more than three times. Really the relevant years for the purpose of deter­mining the turnover so far as the petitioner’s application was concerned would not be these four years, but the years 1967, 1968 and 1969 since the application was made in 1970. The figure for 1967 was not noticed by the appellate authority and I should take it that it was not taken into account by the Assistant Collector also. Thus he has not even looked into relevant matters. That apart, the turn­over of 1970 has to be estimated on the turnover for the 3 preceding years. Even assuming that the actual figures of 1970 itself was available when the application was consi­dered and therefore the assessment became easy there should have been a further consideration as to how many dealers would be justified by this turnover. It is evident that in 1968 there were 37 dealers in the Trivandrum city. In 1969 there were 39 dealers. Therefore there was increase of 2 dealers during this period. There has been considerable increase in turnover thereafter. It is also seen that Subramonia Pillai who applied in 1969 has been granted a licence. The years relevant to his application would be 1966, 1967 and 1968. The increase between 1966 and 1968 cannot be over 71,951 grams which is the total figure of turnover in 1968. If that would justify the increase of one more licence, the petitioner argues, when there was much more increase thereafter a fresh licence would be justified. I am referring to these to show the irrational approach made by the authorities. The assessment will be objective only if the turnover is rationally related to the number of dealers. It can be so rationally related only if the authority concerned decides what should be the average turnover of a dealer and once that is decided it is easy to apply it to the facts of any case. There would then be no scope for different results on different applications. There would be no scope for a charge of arbitrary acceptance or rejection of applications. 10. There would then be no scope for different results on different applications. There would be no scope for a charge of arbitrary acceptance or rejection of applications. 10. As it is, the appellate authority failed to notice the relevant facts, such as the turnover for the year 1967, failed to determine the number of dealers justified by the turnover estimated for the year 1970 and failed to decide the case on such an approach. It appears to be prima facie clear that if the grant of licence to Subramonia Pillai was proper, applying the same rule licence must necessarily be issued to the petitioner. That would be the case if what I have pointed out here is applied to the facts of the case. In these circumstances I am unable to uphold Exts.P-4 and P-6 orders. They are, therefore, quashed. The appellate authority is directed to go into this question in the light of what I have said here making an assessment in the manner I have directed in this judgment and dispose of the application in accordance with such determination. That shall be done positively within a period of 3 months from today. The Original Petition is allowed. Parties are directed to suffer costs. Carbon copies of this judgment will be issued to the respondents and petitioner, free of costs to the former and on payment of costs to the latter.