Retracted statement and undisclosed documents cannot sustain gold control penalty without independent corroboration.

Penal liability under the Gold (Control) Act could not be sustained on a retracted statement alone; independent corroboration was required, and none was produced linking the appellant to the seized ornaments. The chits relied on were not disclosed in the show cause notice or supplied to the appellant, so they could not be effectively rebutted and, in any event, were not proved to have been written by the appellant or to match the seized ornaments. The charge therefore failed on legally admissible and corroborated evidence, and the penalty was held unsustainable.

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Issues: Whether penalty under Section 74 of the Gold (Control) Act, 1968 could be sustained solely on the basis of a retracted statement, and whether the reliance placed on undisclosed chits was legally permissible.

Analysis: The only material linking the appellant with the seized ornaments was the statement of the person from whose possession the ornaments were recovered, and that statement had been retracted. No independent corroborative evidence connected the appellant with the ornaments. The chits referred to in the order were not set out in the show cause notice or supplied to the appellant, and were therefore unavailable for effective rebuttal. Even otherwise, the chits were not proved to be written by the appellant and the figures therein did not tally with the seized ornaments. In a penal proceeding, a retracted statement without corroboration was insufficient to establish the charge.

Conclusion: The penalty was not sustainable and the appellant was entitled to the benefit of doubt.

Final Conclusion: The charge was not proved on legally admissible and corroborated evidence, so the appellant stood exonerated and the penalty order was set aside.

Ratio Decidendi: A penal liability cannot rest solely on a retracted statement unless it is independently corroborated by reliable evidence, and any documentary material relied upon must be disclosed to the noticee for a fair opportunity to meet it.

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