2009 (6) TMI 112 - HC - Customs

Customs House Agent s Licence - Held that - Prima facie though the Rules do not specifically cover the case of a firm which undergoes a dissolution on account of the retirement or death of a partner as in the present case, there is sufficient guidance indicated in the Rule for allowing an existing partner to continue with a licence provided he is otherwise not disqualified. There is no dispute before us about the qualification of the existing partner, i.e. Shri Ulhas Mohile, to hold the licence. Moreover, the aforesaid Rules indicate that it is not the policy to stop any legal work under a licence merely because of a change in the constitution.

Summary

Issues:
1. Questioning rectification order of CESTAT regarding entitlement to carry on business as a Customs House Agent.
2. Change in the constitution of the respondent firm after retirement of a partner.
3. Renewal of license in the name of a non-existing entity.
4. Interpretation of Customs House Agents Licensing Regulations, 2004 regarding change in firm's constitution.
5. Whether existing partner can continue with the license post-change in firm's constitution.
6. Direction to authorities to make necessary changes in license based on the change in firm's constitution.

Analysis:
1. The appellant challenged the rectification order of CESTAT regarding the entitlement of respondent firm to operate as a Customs House Agent. The High Court admitted the appeal, restored the Customs House License of the respondent, and directed its continuation until the appeal's disposal.

2. The issue arose due to a change in the respondent firm's constitution after the retirement of a partner, which was notified to the appellant. Despite the notification, the license was renewed in the name of the non-existing firm instead of the proprietorship. The Court emphasized that authorities must act on such changes promptly and make necessary adjustments in the license.

3. The Court referred to Regulations 15 & 16 of the Customs House Agents Licensing Regulations, 2004, which provide guidelines for changes in a firm's constitution. It noted that the Rules allow an existing partner to continue with the license post such changes if not disqualified, ensuring the continuity of legal work under the license.

4. It was clarified that the Rules do not explicitly address cases where a firm dissolves due to partner retirement or death. However, the existing partner, if qualified, can continue with the license. The Court highlighted the policy of not halting legal work under a license due to changes in the firm's constitution.

5. The Court directed the appellant to acknowledge the change in the firm's constitution and make necessary adjustments in the license accordingly. Any renewal should reflect the updated status. All actions were made subject to the appeal's outcome, ensuring compliance with the legal provisions and fairness in the process.