Gold-control charges need specific notice and proof; a lone sale attempt and denied cross-examination could not sustain confiscation.

A charge under the gold-control law failed where the show-cause notice did not allege the precise contravention ultimately relied on and the material did not prove that the appellant was a licensed gold dealer. A solitary attempt to sell ornaments was insufficient to establish carrying on business in gold, which requires a course of transactions rather than a stray act. Refusal of cross-examination, despite dispute over the seizure panchnama and witnesses, breached natural justice. As the confiscation order lacked a valid foundation and was procedurally unfair, the redemption fine and penalty also could not stand, and the seized ornaments were directed to be released.

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Issues: (i) whether the appellant was established to be a gold dealer and had contravened the statutory restrictions applicable to a licensed dealer; (ii) whether a solitary transaction or asserted attempt to sell gold ornaments, without a specific allegation in the notice, could sustain a charge of carrying on business in gold without licence; (iii) whether denial of cross-examination and the manner of seizure vitiated the proceedings on principles of natural justice; and (iv) whether confiscation, redemption fine and penalty could legally stand.

Issue (i): whether the appellant was established to be a gold dealer and had contravened the statutory restrictions applicable to a licensed dealer

Analysis: The material on record showed that the licence stood in the name of the appellant's father, and affidavits supported the appellant's stand that he was not the licensed dealer. The initial statement at the time of seizure, later retracted, could not by itself establish dealer status. The contradictory findings in the adjudication order also weakened the conclusion that the appellant was a licensed dealer carrying on business from an unauthorised premises.

Conclusion: The charge that the appellant was a gold dealer and had contravened the restrictions applicable to a licensed dealer was not proved.

Issue (ii): whether a solitary transaction or asserted attempt to sell gold ornaments, without a specific allegation in the notice, could sustain a charge of carrying on business in gold without licence

Analysis: The notice did not allege a contravention of the provision dealing with carrying on business without licence on the basis ultimately relied upon in the order. A person cannot be found guilty on a ground not put to notice. In addition, the facts disclosed at best a single attempt to sell ornaments, and business in gold contemplates a course of transactions rather than a stray act. The materials therefore did not establish carrying on business as a dealer in gold.

Conclusion: The alternative charge of unlicensed business in gold was not made out.

Issue (iii): whether denial of cross-examination and the manner of seizure vitiated the proceedings on principles of natural justice

Analysis: The appellant specifically disputed the panchnama and the presence of the panch witnesses. Since the documentary basis of seizure was challenged, refusal to afford cross-examination of the seizing officer and witnesses deprived the appellant of a fair opportunity to meet the case. The record also showed that the third-party claimants to the ornaments were not put on notice, which further affected fairness where their ornaments were treated as liable to confiscation.

Conclusion: The proceedings were vitiated by breach of natural justice.

Issue (iv): whether confiscation, redemption fine and penalty could legally stand

Analysis: Once the charges under the relevant provisions failed and the proceedings were found unfair, the foundation for confiscation and penalty disappeared. The redemption fine and penalty were consequential to the unsustainable confiscation order.

Conclusion: The confiscation, redemption fine and penalty could not be sustained.

Final Conclusion: The appellate order was set aside and the seized gold ornaments were directed to be released.

Ratio Decidendi: A charge under the gold-control law cannot be sustained unless the specific contravention is put in the show-cause notice and proved by reliable material; a solitary attempt to sell ornaments does not by itself establish carrying on business as a dealer, and denial of cross-examination where seizure is disputed violates natural justice.

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