Stamping and penalty under the Gold Control Act fail where old purchased ornaments were not proved to breach the statutory duty.

Section 30 of the Gold Control Act, 1968 requires a licensed dealer to stamp ornaments made, manufactured, or prepared by him certifying purity; unstamped old and used ornaments purchased by the dealer were therefore not shown to attract that obligation, so confiscation was unsustainable. An alleged stock shortage under Section 74 also failed because the department did not prove illegal disposal or otherwise establish the ingredients of contravention, so penalty on that basis could not stand. The same acts could not be punished cumulatively against both the partnership firm and its partners, so the composite penalty structure was impermissible. The confiscation and penalties were set aside.

---

---

Issues: (i) whether unstamped gold ornaments purchased as old and used ornaments by a licensed dealer could be treated as contravening the stamping requirement under Section 30 of the Gold Control Act, 1968; (ii) whether the alleged stock shortage and consequential penalty under Section 74 of the Gold Control Act, 1968 were proved and sustainable; and (iii) whether penalty could validly be imposed both on the partnership firm and on its partners for the same set of acts.

Issue (i): whether unstamped gold ornaments purchased as old and used ornaments by a licensed dealer could be treated as contravening the stamping requirement under Section 30 of the Gold Control Act, 1968.

Analysis: Section 30 requires a licensed dealer to stamp every piece of article or ornament made, manufactured or prepared by him certifying the purity of gold. The uncontroverted position was that the seized ornaments were not manufactured by the appellants but were purchased old and used ornaments. On that factual basis, the statutory obligation to stamp as contemplated by Section 30 did not attach in the same manner. The reasoning also proceeded on the view that exact purity could not practically be certified without melting, while melting would itself raise difficulties under the Act.

Conclusion: The alleged contravention of Section 30 was not proved, and confiscation of the unstamped ornaments was unsustainable.

Issue (ii): whether the alleged stock shortage and consequential penalty under Section 74 of the Gold Control Act, 1968 were proved and sustainable.

Analysis: The record did not disclose proof of illegal disposal or any adequate rebuttal of the explanation offered for the alleged shortage. The burden remained on the Department to establish the contravention with its ingredients. Since the ornaments were not held liable to confiscation on this aspect and the evidentiary basis for the shortage was lacking, the precondition for penalty under Section 74 was not satisfied.

Conclusion: The finding of shortage did not justify penalty, and the penalty order was unsustainable on this count.

Issue (iii): whether penalty could validly be imposed both on the partnership firm and on its partners for the same set of acts.

Analysis: The penalty was imposed cumulatively on the firm and each partner. The reasoning treated the firm as not being a separate legal entity for this purpose and viewed cumulative punishment for the same acts as impermissible in the circumstances of the adjudication. On that footing, the composite penalty structure could not stand.

Conclusion: The penalties imposed on the firm and on the partners were not sustainable.

Final Conclusion: The adjudication order failed on the merits of the alleged stamping violation, the alleged shortage, and the penalty structure, so the confiscation and penalties were set aside.

Ratio Decidendi: A confiscation or penalty under the Gold Control Act cannot be sustained unless the statutory contravention is affirmatively proved, and a dealer cannot be penalised for failure to stamp ornaments that were not made, manufactured, or prepared by him within the statutory mandate.

---