Statutory licensing bar overrides departmental permission, but bona fide breach may avoid penalty while confiscation remains valid.

Statutory prohibition under the gold licensing regime prevailed over departmental permission or trade notices: a licensed dealer could not lawfully sell outside the licensed premises, and any contrary permission was void. Penalty was nevertheless set aside because breach of the obligation was treated as technical and bona fide, with no finding of deliberate defiance or dishonest intent. Confiscation of the offending gold ornaments was upheld because the attempted transactions contravened the law, while one redemption fine was reduced and the other left undisturbed. The core principle stated is that executive permission cannot override a statutory bar, but bona fide conduct may justify relief from penalty even where confiscation remains permissible.

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Issues: (i) Whether a licensed gold dealer could lawfully carry on business or effect sales outside the licensed premises on the strength of departmental permission or trade notices despite the statutory bar; (ii) whether penalty was exigible in the facts and circumstances notwithstanding the bona fide belief of the dealers; (iii) whether confiscation and the fine in lieu of confiscation required interference.

Issue (i): Whether a licensed gold dealer could lawfully carry on business or effect sales outside the licensed premises on the strength of departmental permission or trade notices despite the statutory bar.

Analysis: Section 27(7)(b) imposed an express prohibition against carrying on business as a licensed dealer in any premises other than those specified in the licence. Any departmental permission, endorsement, or trade notice contrary to that mandate could not override the statute. The power under Section 109 vested only in the Central Government to exempt by order subject to specified conditions, and the record showed revocation of the earlier facilities. The permissions relied upon by the dealers were therefore without jurisdiction and void.

Conclusion: The statutory prohibition prevailed, and the dealers could not rely on the departmental permission or trade notices to justify sales outside the licensed premises.

Issue (ii): Whether penalty was exigible in the facts and circumstances notwithstanding the bona fide belief of the dealers.

Analysis: Penalty for breach of a statutory obligation is not automatic and depends upon judicial discretion. Where the breach is technical, venial, or flows from a bona fide belief that the conduct was permitted, penalty need not be imposed. The appellants had acted under permission granted by the authorities and there was no finding of deliberate defiance, contumacious conduct, or dishonest intention.

Conclusion: The penalty was not sustainable and was set aside.

Issue (iii): Whether confiscation and the fine in lieu of confiscation required interference.

Analysis: The attempted transactions were in contravention of law, so the seized ornaments were offending goods and liable to confiscation. However, the quantum of fine could be moderated in the case where the circumstances called for leniency, while the other fine did not warrant further reduction on the material noted by the authority.

Conclusion: Confiscation was upheld, the fine was reduced in one appeal, and the other fine was left undisturbed.

Final Conclusion: The appeals succeeded only to the limited extent of deleting penalty and reducing one redemption fine, while the confiscation of the gold ornaments was maintained and the remaining fine was affirmed.

Ratio Decidendi: A statutory prohibition cannot be overridden by executive permission or trade notices, but penalty for its breach may be declined where the conduct was bona fide and not deliberate, even though confiscation of offending goods remains lawful.

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