Prior notice to the actual licensee is essential before confiscation or penalty; employee liability needs clear statutory basis.

Prior written notice to the actual licensee is mandatory before confiscation or penalty can be imposed under the Gold (Control) Act, 1968. A notice issued only in an employee's name cannot cure the defect where the licensee is the person legally liable and is identifiable from the record. The commentary also notes that a manager or servant cannot be proceeded against for the licensee's alleged contraventions unless the Act creates a specific basis for such liability. In the absence of valid notice to the licensee and a lawful foundation for fastening liability on the employee, confiscation and penalty are legally unsustainable.

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Issues: Whether confiscation and penalty under the Gold (Control) Act, 1968 were sustainable when no show cause notice was issued to the licensee, and whether an employee or manager could be proceeded against for the alleged contraventions.

Analysis: The licensee's status was undisputed and was reflected in the seizure mahazar as well as in the employee's statement. Section 79 required notice in writing to the owner or other concerned person before confiscation or penalty could be imposed. A copy of the notice issued in the employee's name could not substitute for a proper notice to the licensee. Since the proceedings were initiated against the employee as though he were the licensed dealer, and no valid notice was issued to the actual licensee, the adjudication suffered from a fundamental procedural defect. In addition, the employee, being only a manager or servant, could not be fastened with liability for the licensee's alleged contraventions under Sections 33, 55(1) and 56.

Conclusion: The confiscation and penalty were unsustainable and were set aside; the appeals were allowed.

Ratio Decidendi: Where the statute makes prior notice mandatory before confiscation or penalty, non-issuance of notice to the actual person liable vitiates the proceedings, and an employee cannot be proceeded against as if he were the licensee absent legal liability under the Act.

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