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of <h1>Appeal dismissed, penalty upheld under Gold Act. Search legality affirmed, partnership firm liable.</h1> The appeal was dismissed as devoid of any merits. The imposition of penalty under Section 74 of the Gold (Control) Act, 1968, was upheld, and the defenses ... Shortage of gold ornaments found in shop of licensed gold dealer Issues Involved:1. Imposition of penalty under Section 74 of the Gold (Control) Act, 1968.2. Legality of the search and seizure.3. Adequacy of personal hearing by the Adjudicating Authority.4. Validity of defense regarding the shortage of gold ornaments.5. Applicability of Section 75 versus Section 74 for penalty imposition.6. Imposition of penalty on a partnership firm.7. Excessiveness of the penalty amount.Detailed Analysis:1. Imposition of penalty under Section 74 of the Gold (Control) Act, 1968:The appellants contested the imposition of a penalty of Rs. 1,75,000/- under Section 74 of the Gold (Control) Act, 1968. The factual backdrop reveals that on 11-11-1983, Gold Preventive Officers detected a shortage of 3141.450 gms of new gold ornaments (22 cts. purity) and 410.300 gms of new gold ornaments (24 cts. purity) valued at approximately Rs. 6,45,330/-. The shortage was admitted by Shri Mahesh Khanna, a partner of the appellant firm, during the search.2. Legality of the search and seizure:The appellants argued that the search and seizure were illegal due to the absence of a search warrant. However, the judgment clarified that Section 58 of the Gold (Control) Act authorizes Gold Control Officers to enter and search premises if they suspect a contravention of the Act, without requiring a search warrant. The Panchanama prepared during the search was also deemed valid despite not mentioning the hours of the search or specific places within the premises.3. Adequacy of personal hearing by the Adjudicating Authority:The appellants claimed that the Collector adjudicated the case without a proper hearing. However, the judgment noted that Shri Rajesh Khanna, a partner of the appellant firm, appeared before the Collector on 10-2-1984 and reiterated the defense, which was recorded in the impugned order. The contention that no personal hearing was granted was rejected.4. Validity of defense regarding the shortage of gold ornaments:The appellants' defense included claims about an almirah being painted and gold ornaments being transferred to another almirah or iron safe, which were not checked by the Gold Control Officers. The judgment found this defense to be a 'cooked up story' as no evidence was provided to support these claims, and the statement given by Shri Mahesh Khanna on the spot contradicted the subsequent defense.5. Applicability of Section 75 versus Section 74 for penalty imposition:The appellants argued that any penalty should have been imposed under Section 75, not Section 74. The judgment clarified that the contravention of Section 55 read with Rule 13 of the Gold Control (Forms, Fees, and Miscellaneous Matters) Rules, 1968, made the gold ornaments liable to confiscation and the appellants liable to penalty under Section 74, irrespective of the availability of the gold ornaments for confiscation.6. Imposition of penalty on a partnership firm:The appellants contended that a firm is not a legal entity and cannot be penalized. The judgment referenced several legal precedents, including the Supreme Court's decision in Raj Bahadur v. Director of Enforcement, which held that a firm can be penalized. The Gold (Control) Act defines a 'dealer' to include a firm, thereby justifying the imposition of penalty on the appellant firm.7. Excessiveness of the penalty amount:The appellants argued that the penalty was excessive. The judgment found no mitigating circumstances to justify reducing the penalty amount and upheld the penalty of Rs. 1,75,000/-.Conclusion:The appeal was dismissed as devoid of any merits. The imposition of penalty under Section 74 of the Gold (Control) Act, 1968, was upheld, and the defenses raised by the appellants were rejected. The legality of the search and seizure, adequacy of personal hearing, and the applicability of penalties to a partnership firm were all affirmed in favor of the respondent.
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