TaxTMI 
TaxTMI 
1987 (8) TMI 223
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....isfactory explanation regarding the said shortage of gold ornaments the statutory records GS-11 and GS-12 registers, receipt voucher book and issue voucher books from 1-4-1983 were taken into possession. Statement of Shri Parmeshwar Khanna was also recorded on the spot. In his statement, Shri Parmeshwar Khanna had stated that the appellant firm, in addition to the jewellery business, also runs a Cinema in Dehradun and that till the death of his father, Shri Shambhu Nath on 9-6-1983, the affairs of the appellant firm were exclusively managed by his father and it was only after the death of his father that he and his other brothers started looking after the jewellery business. He further stated that he and his other brothers were also partners of the firm and had not physically verified the stock in hand since the death of his father. This can be verified from his register. Immediately on the following day, that is to say, on 9.9.1983 it was informed by one of the partners of the appellant firm that actually at the time of physical verification on 8-9-1983 there was no shortage of gold ornaments as it happened that one of the partners had placed some jewellery in the drawer of the ma....
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.... an affidavit in support of his application which was already allowed on 12.8.1986 explaining the circumstances which prevented the appellant from filing the additional evidence earlier. This request was granted and the case was adjourned. When the case was taken up for hearing on 19-8-1987 Shri Gupta, learned counsel for the appellants orally explained the circumstances which prevented the appellants from filing the additional evidence earlier and undertook to file the affidavit after the arguments, which he did. The affidavit is now on the record. 4.  Shri R.R. Gupta, learned counsel vehemently submitted that the imposition of penalty on the appellants firm is totally illegal and without jurisdiction, inasmuch as, - (i) No show cause notice was ever issued to the appellant firm; and alternatively (ii) from the show cause notice which is on record it is clear that no allegation regarding the alleged contravention of Section 71 or 74 was made against the appellant firm and the appellant firm was never asked to show cause, and (iii) that no penalty was proposed in the show cause notice against the firm. O merits he submitted that the learned Adjudicating Autho....
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....y mention at the outset that show cause notices were issued to all the partners of the appellant firm, but the learned Collector has not imposed any penalty on any of the partners. The Department has also not filed any Cross-Objections. Hence, we are not concerned with the individual partners of the appellant firm. 8. Now adverting to the arguments advanced by the parties, we are of the opinion that the contention of the appellant that no show cause notice was issued to them and alternatively that no allegation regarding the alleged contravention of Sections 71 or 74 was made against the appellant firm in the show cause notice and that no penalty was proposed in the show cause notice against the firm must be given an effect to Section 79 of the Gold (Control) Act, 1968 provides for giving of an opportunity to the owner or other person concerned before the goods are confiscated or penalty is imposed. Section 79 so far as relevant for the purpose of this appeal reads as follows :- "79. Giving of an opportunity to the owner of gold, etc. No order of adjudication of confiscation or penalty shall be made unless the owner of the gold, conveyance, or animal or other person conc....
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....vention of the Gold (Control) Act. However, the Adjudicating Authority levied a certain penalty on one of the partners of the said firm, Shri C.B. Shah under Section 74 of the Gold (Control) Act. Setting aside the penalty imposed on the said partner, Shri C.B. Shah, this Tribunal held as follows :- "14. In so far as the Collector's order of levy of penalty of Rs. 5000/- on Shri C.B. Shah is concerned, it is seen that the same had been levied without the issue of show cause notice to Shri C.B. Shah. The name of Shri Shah was just mentioned among the names of the partners in the show cause notice issued to M/s. Parimal Jewellers. But Shri C.B. Shah has not been called upon to show cause against any alleged contravention of the Gold (Control) Act. In view of this fact, we cannot accept the explanation of the learned Senior Departmental Representative that adequate opportunity was given to Shri C.B. Shah for showing cause. Since principles of natural justice had not been complied with, we find that the Collector's order of levy of penalty of Rs. 5,000/- on Shri Shah is bad and accordingly, we set aside the same." (Emphasis supplied) 10. The contention of the learned ....