1988 (12) TMI 279 - Commissioner - Customs

Summary

Issues:
- Interpretation of proviso (f) to Rule 2(f) of Gold Control (Licensing of Dealers) Rules 1968
- Application of turnover figures in granting Gold Dealers Licence
- Compliance with the requirement of making the application within 60 days of leaving employment
- Consideration of relevant factors in rejecting the application
- Delegation of powers under Section 27 of the Gold Control Act

Analysis:

Interpretation of Proviso (f) to Rule 2(f):
The appellant contended that the Deputy Collector misinterpreted the provisions of proviso (f) to Rule 2(f) while rejecting the Gold Dealers Licence application. The appellant argued that continuous employment as a salesman since 1974 made him eligible for the licence. The Appellate Tribunal's judgment in the matter of S.G. Jain supported the appellant's position, emphasizing the importance of the Madras High Court's ruling on the scope of the licensing authority's power in granting licences.

Application of Turnover Figures:
The Dy. Collector rejected the application based on turnover figures, citing a decline between 1983 and 1984. However, the appellant argued that there was a substantial rise in turnover in subsequent years. The Appellate Tribunal's ruling highlighted that a decline in turnover alone should not be the basis for denying a licence. No minimum turnover requirement for gold business was prescribed by law, and the relevance of turnover in granting licences was discussed in detail.

Compliance with the 60-Day Requirement:
The appellant claimed to have submitted the application within 60 days of leaving employment, contradicting the Dy. Collector's assertion. The Dy. Collector failed to provide evidence supporting the claim that the application was not timely. The proviso (f) did not stipulate continuous employment for five years as a prerequisite for the licence.

Consideration of Relevant Factors:
The Dy. Collector's rejection lacked consideration of crucial factors such as the impact on existing license holders, public interest, and the applicant's ability to sustain a livelihood. The appellant's experience and the continuous increase in licensed dealers and turnover per dealer were not adequately evaluated in the decision-making process.

Delegation of Powers under Section 27:
The judgment highlighted the delegation of licensing powers under Section 27 of the Gold Control Act and the Central Government's authority to restrict the number of licensed dealers. Without explicit directions from the Central Government, officers delegated with licensing powers cannot arbitrarily deny licences. The Madras High Court's ruling in a related case provided a guiding precedent for interpreting Rule 2(f).

In conclusion, the judgment set aside the Dy. Collector's decision as legally unsustainable and ordered the grant of the Gold Dealers Licence to the appellant within a specified timeframe, emphasizing adherence to legal provisions and relevant considerations in licensing decisions.