The liability to confiscation and the levy of penalty are two independent matters under the Gold Control Act, 1968.

Headnote:
Gold Control Act - Confiscation of Seized Gold - S. 79, S. 55, S. 74 - The court examined the provisions of S. 79 of the Gold Control Act, 1968 and held that the notice must be served or tendered in order to complete the process of giving notice. The court referred to the Supreme Court's decision in K. Narasimhiah v. H. C. Singri Gowda to support its interpretation. The court also discussed the liability to penalty under S. 74 and concluded that the liability to confiscation and the levy of penalty are two independent matters. The court remitted the matter back to the original authority for re-examining the question of levying an appropriate penalty on the appellant.
Fact of the Case:

The appellant, a licensed gold dealer, had gold ornaments seized by the authorities on the allegation of violating S. 55 of the Gold Control Act, 1968. The appellant filed a representation contending that the notice for confiscation was served beyond the prescribed period of six months from the date of seizure.
Finding of the Court:

The court found that the notice was served beyond the prescribed period, and the appellant became entitled to the return of the seized gold. The court also discussed the liability to penalty under S. 74 and remitted the matter back to the original authority for re-examining the question of levying an appropriate penalty on the appellant.
Issues: 1. Whether the notice for confiscation was served within the prescribed period. 2. Whether the liability to confiscation and the levy of penalty are independent matters.
Ratio Decidendi: The court held that the notice must be served or tendered to complete the process of giving notice, and the liability to confiscation and the levy of penalty are two independent matters.
Final Decision: The court allowed the appeal, set aside the judgment of the learned single Judge, quashed the impugned orders, and remitted the matter back to the original authority for re-examining the question of levying an appropriate penalty on the appellant.

Judgment :-

MALIMATH, C.J.

This is an appeal against the judgment of the learned single Judge in O.P. No. 171 of 1979. The relevant facts necessary for the disposal of this case may briefly be stated as follows : The appellant was a dealer in gold, holding licence issued by the Gold Control Licensing Authority. He was doing the business as a licensed gold dealer. On 9th July, 1974, the Superintendent of Central Excise, Integrated Divisional Office, Ernakulam and party searched the premises of the appellant and seized gold ornaments weighing 2029.500 grams under a mahazar prepared on the occasion. That was done on the allegation that the appellant had violated the provisions of S. 55 of the Gold Control Act, 1968 (hereinafter referred to as 'the Act'), the appellant not having entered the possession of the said gold ornaments in the accounts which were required to be maintained in accordance with the said statutory provision. The appellant was duly served with notice under S. 79 of the Act on 11th January, 1975 requiring him to show cause as to why the seized gold should not be confiscated and as to why penalty should not be imposed under S. 74 of the Act. The appellant filed a representation in response to the said notice wherein it was inter alia contended that the notice though dt. 27-12-1974, it having been served only on 11th of January 1975 i.e. more than six months after the seizure of the gold, the seized gold is not liable for confiscation and that the appellant has become entitled to return of the seized gold. The Additional Collector of Customs and Central Excise made an order on 5th March, 1976 confiscating the seized gold and levying a penalty of Rs. 5,000/-. The appellant was permitted to redeem the gold on payment of redemption fine of Rs. 30,000/-. On appeal the said order was confirmed by the Collector of Customs and Central Excise on 16th October, 1976. On a further revision to the Central Government, the order was modified on 20th October, 1978 reducing the penalty to Rs. 2,500/- and permitting the appellant to redeem the confiscated gold and the redemption fine was reduced to Rs. 20,000/-. It is the said decision that was challenged by the appellant in O.P. No. 171 of 1979, which having been dismissed by the learned single Judge on 26th February, 1982, this appeal is preferred.

2. It was contended by learned counsel for the appellant Smt. Lovely Poulose that the learned single Judge has committed an error of law in taking the view that the notice having been issued on 27th December 1974, well within the period of six months from the date of seizure, the same must be regarded as a notice given in accordance with the provisions of S. 79 within a period of six months from the date of seizure.

3. S. 79 of the Act reads as follows:

"79. Giving of an opportunity to the owner of gold etc. - No order of adjudication of confiscation of penalty shall be made unless the owner of the gold, conveyance, or animal or other person concerned is given a notice in writing -

(i) informing him of the grounds on which it is proposed to confiscate such gold, conveyance or animal or to impose a penalty; and

(ii) giving him a reasonable opportunity of making a representation in writing within such reasonable time as may be specified in the notice against, the confiscation or imposition of penalty mentioned therein and if the so desires, of being heard in the matter :

Provided that the notice and representation referred to in this section may, at the request of the owner of other person concerned, be oral :

Provided further that where no such notice is given within a period of six months from the date of the seizure of the gold, conveyance or animal or such further period as the Collector of central Excise or of Customs may allow, such gold, conveyance or animal shall be returned after the expiry of that period to the person from whose possession it was seized.

Explanation - Where any fresh adjudication is ordered under this Act, the

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Judicial Analysis