Retracted co-noticee statements need independent corroboration before confiscation, penalty, or licence cancellation can be sustained.

Retracted co-noticee statements cannot, by themselves, sustain confiscation or personal penalty under the Gold (Control) Act, 1968 unless independently corroborated by material such as proof of financing, ownership, collusion or other connecting evidence. The note also explains that cancellation of a gold dealer licence requires a specific proposal in the show cause notice and compliance with the statutory notice-and-hearing procedure; where the notice does not seek cancellation and the prescribed process is not followed, the cancellation cannot stand. The stated legal effect is that liability and licence cancellation are both unsustainable on an uncorroborated statement and defective procedure.

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Issues: (i) Whether the appellant could be held liable for confiscation and penalty on the basis of the retracted statement of the co-noticee without independent corroboration. (ii) Whether cancellation of the gold dealer licence was valid in the absence of a specific proposal in the show cause notice and compliance with the statutory procedure.

Issue (i): Whether the appellant could be held liable for confiscation and penalty on the basis of the retracted statement of the co-noticee without independent corroboration.

Analysis: The statements recorded by the Customs officer in connection with the seizure were treated as usable in proceedings under the Gold (Control) Act, 1968. However, the core allegation against the appellant rested only on the earlier statement of the co-noticee, which was later retracted. The record disclosed no independent corroboration of financing, ownership, collusion, or conspiracy, and the search of the appellant's premises yielded no material connecting him with the seized gold. The presumption under the Gold (Control) Act could not be displaced on the basis of an uncorroborated and retracted statement alone.

Conclusion: The appellant could not be held liable for confiscation and penalty on the basis of the retracted statement alone, and the finding of contravention was unsustainable.

Issue (ii): Whether cancellation of the gold dealer licence was valid in the absence of a specific proposal in the show cause notice and compliance with the statutory procedure.

Analysis: The show cause notice did not propose cancellation of the licence or call upon the appellant to meet that proposed action. Section 50 of the Gold (Control) Act, 1968 provided a specific mechanism for suspension or cancellation of a gold dealer's licence and required a reasonable opportunity of showing cause before cancellation. In the absence of such notice and in view of the statutory procedure, the cancellation order could not stand.

Conclusion: The cancellation of the gold dealer licence was invalid.

Final Conclusion: The charge against the appellant was not proved, and both the personal penalty and the licence cancellation were set aside.

Ratio Decidendi: A person cannot be fastened with liability under the Gold (Control) Act, 1968 on the basis of a retracted statement unless it is independently corroborated, and a dealer's licence cannot be cancelled without adherence to the statutory notice and hearing requirement.

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