Talwar Diamonds Vs. Union of India and Others

Talwar Diamonds vs Union of India and Others

Type Court Judgment Court Delhi Decided Nov 10, 1986

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Citation: sooperkanoon.com/680396
Court: Delhi High Court
Judge: B.N. Kirpal and; S. Ranganathan, JJ.
Decided On: Nov 10, 1986
Case Number: Civil Writ Petition No. 1551 of 1986
Subject: Excise; Company

Case Summary

AI-generated summary - not the official court judgment text.

Gold Control - Licensing--Partnership--A firm is a legal entity under the Gold Control Act whether or not it is so considered in general law. Eligibility--'Person' holding gold dealer's license is the firm and is capable of holding the license--applicant firm is entitled to a license even if some partners are partne...

Key legal issue: Excise; Company
Acts & sections: Gold (Control) Act, 1968 - Sections 2 and 52; Gold Control (Licensing of Dealers) Rules, 1969 - Rule 2; Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968

Parties & Advocates

Appellant / Petitioner

Talwar Diamonds

Respondent

Union of India and Others

Legal References

Acts: Gold (Control) Act, 1968 - Sections 2 and 52; Gold Control (Licensing of Dealers) Rules, 1969 - Rule 2; Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968
Reported In: AIR1988Delhi320; [1987]61CompCas426(Delhi); 1987(12)ECC122; 1987(12)LC814(Delhi); 1987(28)ELT331(Del)

Excerpt

.....so considered in general law. eligibility--'person' holding gold dealer's license is the firm and is capable of holding the license--applicant firm is entitled to a license even if some partners are partners in another firm holding a gold dealer's license. gold control (licensing of dealers) rules, 1969 : rule 2(dd). - section 13: [altamas kabir & cyriac joseph,jj] custody of child - welfare of child vis--vis comity of courts - the minor girl child of 3 1/2 years was brought to india by her mother. the minor girl was a citizen of u.k. being born in u.k. her parents had set up their matrimonial home in u.k. and had acquired status of permanent residents of u.k. the child with her mother was supposed to return to u.k. but the mother cancelled her tickets and remained behind in india. the husband thereupon started procededings before the high court of justice, family division. u.k. praying for an order that the minor child be made a ward of the court and for a direction upon the wife to return the minor child to the jurisdiction of the said court. a further direction was given for the passport and other international travel documents of the minor child to be handed over to the solicitors of the husband. a petition seeking protection of minor child was thereupon filed by father of the husband before delhi high court. a direction for handing over custody of child to father of husband was also sought. the high court considering fact that the u.k. court was already in seisin of matter and had passed an interim order and by relying on principle of comity of nations and comity of judgments of the courts of two different countries in deciding the matter directed the wife to take the child of her own to u.k.or hand it over to father of husband to be taken to u.k. as measure of interim custody and that it would be for the u.k. court to decide the question of custody - order was challenged by wife - held, the order of high court was not liable to be interfered with...........of the collector, the excise department preferred an appeal to the tribunal which allowed the appeal and restored the order of the deputy collector. hence, the present writ petition. 4. the short ground on which the application of the petitioner firm for a license has been refused is that under rule 2(dd), the petitioner is not entitled to such a license because three of its partners are partners in m/s. talwar jewellers, a firm which has already obtained a license under the act. rule 2(dd) requires the department, while dealing with an application for license to consider 'whether the applicant is a person who does not hold a valid license to carry on business as a licensed dealer in his name or is person who is not partner of a firm which hold such license.' 5. on behalf of the petitioner, it is submitted that the applicant is a firm, namely, m/s. talwar diamonds. the petitioner firm does not hold a valid license to carry on business as a dealer in gold. the firm cannot also be said to be a partner of a firm which holds such a license. it is, thereforee, contended that rule 2(dd) cannot justify the refusal of the application filed by the petitioner. on the other had, the contention of the department is that a firm does have a juristic personality and that when a license is granted in the mane of firm, it is really a license granted to all the partners of the firm jointly. it is submitted that since three of the partners of m/s. talwar jewellers thus held a license in their names jointly along with three others and since these persons are partners in the petitioner firm, the prohibitions contained in rule 2(dd) will come into operation. 6. we are unable to accept the contention urged on behalf of the department. a perusal of the gold (control) act clearly shows that a license under the act is to be granted to a 'dealer'. 'dealer' is defined in section 2(h) as including a hindu undivided family, a local authority, company, society registered under the societies.....

Full Judgment

Ranganathan, J.

1. We had issued notice to the respondents to show cause why the writ petition should not be admitted. We are of the opinion that as the question which is involved in this petition is a very short one, it would be expedient to dispose of the writ petition itself. We, thereforee, issue rule D.B. and, having heard both counsel, we proceed to dispose of the writ petition on merits.

2. The writ petition is directed against an order dated July 11, 1986, under which the Deputy Collector, Central Excise, Chandigarh, directed the petitioner to stop carrying on business as dealers in gold. This direction was issued in pursuance of an order passed by the Customs, Excise and Gold (Control) Appellate Tribunal dated May 30, 1986. The writ petition thereforee really involved the question of correctness of the above decision of the Tribunal.

3. The petitioner, M/s. Talwar Diamonds, is a firm consisting of six partners. Three of the partners of the firm are already partners in a firm known as M/s. Talwar Jewellers which holds a license as a 'dealer' under the Gold (Control) Act. The Firm, M/s. Talwar Diamonds, also applied for a license in the prescribed form. But this application was rejected by the Deputy Collector, Central Excise, who held that a license could not be granted in view of rule 2(dd) of the Gold Control (Licensing of Dealers) Rules, 1969. The petitioner filed an appeal to the Collector of Central Excise and this appeal was allowed. Aggrieved by the order of the Collector, the Excise Department preferred an appeal to the Tribunal which allowed the appeal and restored the order of the Deputy Collector. Hence, the present writ petition.

4. The short ground on which the application of the petitioner firm for a license has been refused is that under rule 2(dd), the petitioner is not entitled to such a license because three of its partners are partners in M/s. Talwar Jewellers, a firm which has already obtained a license under the Act. Rule 2(dd) requires the Department, while dealing with an application for license to consider 'Whether the applicant is a person who does not hold a valid license to carry on business as a licensed dealer in his name or is person who is not partner of a firm which hold such license.'

5. On behalf of the petitioner, it is submitted that the applicant is a firm, namely, M/s. Talwar Diamonds. The petitioner firm does not hold a valid license to carry on business as a dealer in gold. The firm cannot also be said to be a partner of a firm which holds such a license. It is, thereforee, contended that rule 2(dd) cannot justify the refusal of the application filed by the petitioner. On the other had, the contention of the Department is that a firm does have a juristic personality and that when a license is granted in the mane of firm, it is really a license granted to all the partners of the firm Jointly. It is submitted that since three of the partners of M/s. Talwar Jewellers thus held a license in their names jointly along with three others and since these persons are partners in the petitioner firm, the prohibitions contained in rule 2(dd) will come into operation.

6. We are unable to accept the contention urged on behalf of the Department. A perusal of the Gold (Control) Act clearly shows that a license under the Act is to be granted to a 'dealer'. 'Dealer' is defined in section 2(h) as including a Hindu undivided family, a local authority, company, society registered under the Societies Registration Act, a co-operative society, a club, firm or association of persons. It is, thereforee, clear that, whether a firm can be treated as a legal person or not in general law, for the purposes of the Gold (Control) Act a firm is a legal entity. In fact, it is common ground that license are applied for the firms and are granted to the firms. Indeed, in the case of M/s. Talwar Jeweller, license has been granted in the name of the firm itself. If the present objection had not been raised, the petitioner firm would have also been granted a license. The Act clearly envisages a license in the name of a firm. This is also clear from the provisions of section 52 of the Act. This section provides that, when there is a change in the constitution of a partnership, the license has been granted to firm as dealer will become invalid unless the change has been approved by the Administrator. This section makes it clear that the license is the name of the firm itself, but that change of the constitution of a partnership should be approved by the Administrator if the license in the name of the firm is to continue. Even the terms of rules 2(dd) on which reliance is placed by the respondents clearly show that the stand taken by the Department is untenable. The last part of the rule which we have extracted earlier postulates a firm holding a license. It is thereforee, clear in the context of the Gold (Control) Act, that in the case of a firm, the 'person' who holds a license is the firm itself. As under the Income-tax Act, so under this Act a firm is also a 'person' capable of holding a license. The terms of rule 2(dd) do not, thereforee, apply where the applicant firm is not the holder of another gold dealer's license, except perhaps, in a case where all the partners of the applicant firm are partners in another firm holding a valid license. Our conclusion is also fortified by the form prescribed for application for a license under the Gold control (Forms, Fee and Miscellaneous Matters) Rules, 1968, where one of the columns requires an applicant to name the partners of the firm.

7. We, are, thereforee, satisfied that the petitioner is not disqualified by the terms of rule 2(dd) from being granted a license. We, thereforee, quash the order of the Customs, Excise and Gold (Control) Appellate Tribunal dated May, 30,1986 as well as the impugned notice dated July 11, 1986. We are informed that though the Tribunal directed the cancellation of the license, it was cancelled in view of the pendency of the writ petition. There is, thereforee, no necessity to order restoration of the license to the petitioner who, as we have already held, is entitled to the license.

8. The writ petition is allowed. There will be no order as to costs.

9. Petition allowed.

Same Court & Year Delhi · 1986 Same Parties Talwar Diamonds vs Union of India and Others Same Subject Excise; Company Same Judge B.N. Kirpal and; S. Ranganathan, JJ. Acts & Sections Gold (Control) Act, 1968 - Sections 2 and 52; Gold Control (L...

Excise; Company