M.L. VARMA, J.
By this petition under Article 226 of the Constitution of India the petitioner has challenged the action of the respondents in confiscating gold ornaments weighing 569 grams and in imposing a penalty of Rs. 500. The petitioner has sought the release of the said ornaments and waiver of the penalty. He has also prayed for quashing of the show cause notice, the adjudication order as well as the orders in appeal and in revision which are Annexures 'D', 'J', 'M' and 'O' respectively to the writ petition.
2. At the relevant time the petitioner carried on sarafa business at his business premises in Partap Bazar, Vrindavan, Mathura, U.P. This is his proprietary business. It includes the purchase and sale of silver and silver ornaments and utensils. According to the petitioner he also accepts gold and silver ornaments given to him for pawning. According to him he did not carry on any business in gold and gold ornaments at the relevant time i.e., 17th of November, 1972 on which date the business premises and residence of the petitioner were searched by the officers of the Central Excise Department (from Agra) who administer the Gold (Control) Act, 1968 (for short 'Act'). The petitioner is not a licensed dealer in Gold.
3. Pursuant to the aforesaid search, 569 gms. of gold ornaments were seized from the business premises of the petitioner and a recovery memo was prepared which is Annexure 'A' to the writ petition. In this recovery memo the weight of the seized gold ornaments is mentioned as 560 gms. It is recorded in that memo that on interrogation the petitioner stated that all the seized ornaments belonged to his different customers but he was not in a position to give their names and would supply the list of such customers within a fortnight. He also admitted that he did not possess either any gold dealer's licence or a certificate of a goldsmith.
4. Annexure 'B' to the writ petition is the statement of the petitioner recorded on 17.11.1972 at his business premises during the course of this search. In this statement it is recorded that the petitioner had been doing the sarafa work for a sufficiently long time and that mostly he dealt in pawning gold and silver ornaments. He also stated that occasionally and on the request of his customers he took their old jewellery for repair and polish work and after getting them repaired and polished from some other goldsmith he returned the jewellery to those customers. For this he took from the customers only the charges for the goldsmith. It is pertinent to point out that Annexure 'B' is the English translation of the statement of the petitioner recorded at the time of the search. This statement was given in Hindi, a copy of which has been filed as Annexure 'R-1' to the rejoinder affidavit of the petitioner.
5. On 7.12.1972 the petitioner addressed a letter to the Assistant Collector, Central Excise, Agra, giving the details in respect of ornaments seized viz., the name and address of the customers, the details of ornaments, the approximate weight of the ornaments in grams, the purpose of its receipt by the petitioner and in the relevant cases the amount borrowed from him by the customers. This letter is Annexure 'C' to the writ petition. With this letter the petitioner enclosed 7 attested true copies of affidavits of the said customers. In this letter it is also stated that he could not furnish the correct name and addresses of these customers at the time of search because he was busy throughout the day in connection with the search at his house, shop and at the banks and further that he was also mentally disturbed. It is also stated that when his shop was being searched he had to "leave at the instance of the officers for the search at the Syndicate Bank and Punjab Bank and he had left behind his uncle at the shop to be present during the search. It is also written in this letter that when he returned "all the items had been taken out of the boxes and had been separated and weighed."
6. A show cause notice dated 15.2.1973 was issued to the petitioner from the Central Excise Collector at Kanpur alleging contravention of the provisions of Section 27 of the Act. In this show cause notice (Annexure 'D' to the writ petition) it was repeated that the business premises of the petitioner had been searched on 17.11.1972 and gold ornaments weighing 569 gms. had been recovered from an iron safe and from the cavity beneath the safe of the petitioner. It is also pointed out in this notice that the petitioner had "failed to produce any account etc. in support of his claim that mostly he dealt with the pawning of ornaments". It has also been noticed that in the statement made by the petitioner on 17.11.1972 he had admitted that he accepted the ornaments from his customers for getting them repaired and polished through some goldsmiths. The notice alleged that the petitioner was conducting the business as a gold dealer without having a valid licence. Consequently the gold ornaments had been seized for the contravention as aforesaid. The petitioner was called upon to show cause why the seized ornaments should not be confiscated under Section 71 of the Act and why penalty should not be imposed under Section 74 of the Act.
7. A short reply dated 27.2.1973 to the aforesaid show cause notice was filed by the petitioner stating that vide his letter of 7th of December, 1972 he had furnished the names and addresses of the customers and had also enclosed true copies of the affidavits of such customers. He sought personal hearing to produce originals of his account books and the affidavits of the customers in support of his contention that he had not contravened Section 27 of the Act. It was again stated in this reply that the petitioner mainly did pawning business, and that occasionally on the request of the customers he got their pawned ornaments repaired and polished from some goldsmith. In this reply it has been stated that he made the customers pay the charges of the repairs/polishing to the goldsmith and that he did not undertake any sale or purchase of the gold ornaments.
8. On 21.1.1974 one Mr. O.K. Sarkar, Deputy Collector of Central Excise Collectorate, Kanpur, gave a personal hearing to the petitioner. During the course of bearing it was pointed out on behalf of the petitioner that the letter of 7.12.1972 was sent by him under registered A.D. cover which was received in the office of the Assistant Collector, Central Excise, Agra on 11.12.1972 as per the acknowledgement receipt. It was asserted that the petitioner was a regular income-tax payee and his income-tax records showed that he was "enjoying income from property, pawning business and sale of silver ornaments". It was pointed out that Mr. J.D. Misra, Inspector (Gold)/Seizing Officer had confirmed that the search had been conducted on the same day at the residential premises and the lockers of the petitioner in the two banks simultaneously when his business premises were searched and that he was required to be present at the banks, residential premises and also at his business premises. It was urged that due to tension and anxiety the petitioner could not satisfactorily explain or co-relate the ornaments seized from his business premises.
9. The record of personal hearing is Annexure 'F' to the writ petition. In this it is also noted that Mr. Harcharan Lal Gupta and Gopal Prasad Sharma; who had pledged their ornaments with the petitioner; had produced their accounts and registers showing the entries regarding the ornaments pledged with the petitioner and had confirmed that certain ornaments had been given to the petitioner for purposes of polishing. An extract from the copy of accounts of Mr. Harcharan Lal Gupta was also filed. A list of persons, who had pledged their ornaments with the petitioner along with the copies of the affidavits of such persons was again filed during the course of hearing.
10. It was argued in the Adjudication Proceedings that the Act did not prohibit taking of ornaments of different parties for getting such articles polished or repaired by a certified goldsmith. It was contended that such an action did not contravene the provisions of Section 27 of the Act. It was also argued that the gold ornaments and articles, being third party goods, were not liable for confiscation and no evidence had been put forth by the excise department to controvert the evidence in support of the petitioner's case or to justify such confiscation. It was urged that as the ornaments were not liable for confiscation under the Act, no penalty could be imposed on the petitioner. It was pointed out that no investigations had been conducted by the Collector of Central Excise, Agra, to show that the list of persons submitted by the petitioner was not genuine. The petitioner sought the release of the seized goods.
11. It may be noted that during the course of the personal hearing the said Seizing Officer had also been cross-examined by the defence counsel. A copy of such cross-examination is Annexure 'G' to the writ petition. In this cross-examination he stated that no documents or accounts indicating dealing with the ornaments and articles of gold or manufacture thereof were found nor were any implements or instrument or equipment for the manufacture of gold ornaments found in the premises of the petitioner. He stated that "During the seizure and completion of formalities thereon the proprietor Mr. Baij Nath Prasad Sarraf was not present all along. At the time of recovery of the ornaments Mr. Baij Nath Pd. Sarraf was present, but at the time of weighment and preparation of recovery Memo etc. he was not there........ Mr. Baijnath Pd., was away from the shop premises during the time of seizure and its formalities for about 11/2 hours."
12. The adjudication order (Annexure J) was passed on 29.10.1974 by the said Mr. D.K. Sarkar, Deputy Collector, wherein he observed that' he was not inclined to accept the contention that the ornaments in question had been pledged by different persons with the petitioner and/or that some ornaments were given to be repaired or polished by the goldsmith through the petitioner He observed that in the event of the ornaments being pledged with the party there would certainly have been some record maintained by the petitioner either in the form of a register or a book "and there was no point for giving the ornaments to the party for getting them repaired or polished by a certified goldsmith through him." According to the Deputy Collector this contention was an afterthought and not acceptable and further that the contravention of Section 27 of the Act had been fully established and that the petitioner was carrying on business without obtaining a licence. The seized ornaments were ordered to be confiscated under Section 71(1) of the Act and a penalty of Rs. 500 under Section 74 of the Act was also imposed.
13. The petitioner herein appealed against the order of confiscation and the penalty imposed on him, before the Collector of Central Excise, Kanpur However, this appeal was belated and, therefore, an application for condonation of delay was also tiled along with the appeal. The said Collector passed a short order dismissing the appeal as being barred by time after holding that the explanation for condonation of delay was not satisfactory. No personal hearing was afforded to the petitioner herein in spite of a specific request in that regard because, in the opinion of the Collector, it was not necessary to do so as the appeal was rejected as being time barred. The order-in-appeal is Annexure 'M' to the writ petition.
14. Thereafter the petitioner filed his revision petition before the Gold Control Administrator, Government of India, Ministry of Finance (Department of Revenue and Insurance), New Delhi. This revision petition was also dismissed on the ground that the reason advanced for filing a belated appeal could not be taken "as 'sufficient cause' to merit waiver of the time limit." The revision application was therefore rejected. Consequently the present writ petition was filed. A copy of the order in revision is Annexure "O" to the writ petition.
15. Mr. N.C. Chawla learned counsel appearing for the petitioner contended that there was no violation or contravention of the provisions of Section 27 of the Act and, therefore, the confiscation of the seized gold ornaments as well as imposition of penalty; which was sought to be done under the provisions of Sections 71 (1) and 74 of the Act; were illegal. He pointed out that from the very beginning the case set up by the respondents against the petitioner was that since the petitioner had admitted that he accepted the ornaments from his customers for repairs and polish "which he got done through some goldsmith", therefore, the petitioner was conducting the business as a gold dealer without a valid licence. According to Mr. Chawla this was evident from the show cause notice itself. He also drew attention to Ground VI of the writ petition wherein it has been contended that neither the show cause notice nor the impugned order (Annexure J) disclosed any contravention of any provision of the Act having been made or attempted in relation to the confiscated gold ornaments. He pointed out that in the counter-affidavit it was again contended that the petitioner had himself admitted that he accepted the ornaments from his customers for repair and polish and on that basis the charge of dealing in gold ornaments was made against the petitioner and that such "dealing" was in violation of Section 27 of the Act.
16. Mr. Chawla further argued that it was implicit in this charge that the seized gold ornaments belonged to third parties and not to the petitioner and therefore, not liable for confiscation in view of the proviso to Section 71(1) of the Act. This, according to him, was the position even if it were to be assumed that the petitioner was conducting the business of a gold dealer without having a valid licence in contravention of Section 27 of the Act. It was urged that in view of the proviso to Section 71 (1) of the Act third party goods/gold ornaments cannot be confiscated. He pointed out that this proviso was inserted in the Act when Section 71(1) was amended and re-enacted after the said Section had been struck down by the Supreme Court as being ultra vires since Section 71 as enacted earlier did not have the proviso and it empowered confiscation of third party goods/gold ornaments. This judgment of the Supreme' Court is in the case of Badri Prasad v. Collector of Central Excise, Sarvodaya nagar Kanpur and Ors., as well as other connected cases reported in 1971 AIR(SC) 1170, 1971 (2) SCC 1. He urged that it is settled law now that gold ornaments of third parties cannot be confiscated.
17. The second limb of Mr. Chawla's contention is that on the admitted facts the petitioner could not be said to be a 'dealer' since he did not himself receive any remuneration for having the ornaments repaired and polished which ornaments according to him belonged to the customers. He urged that there was no bar no accepting gold ornaments on pledge and keeping them as pawned articles and goods as security for lending money. He argued that the petitioner had been doing sarrafa business for many years and he had a goodwill in the market and that at the request of his customers he used to take the gold ornaments for having them repaired or polished from certified goldsmiths arid he only used to charge the goldsmith charges from his customers. The definition of a "dealer" is given in Section 2 (h) of the Act. The relevant portion of the definition reads as under:
"(h) "dealer" means any person who carries on, directly or otherwise, the business of making, manufacturing, preparing, repairing, polishing, buying, selling, supplying, distributing, melting, processing or converting, gold whether for cash or for deferred payment or for commission, remuneration or other valuable consideration, and includes......".
18. Learned counsel for the petitioner also referred to the provisions of Section 29 of the Act and contended that admittedly no primary gold had been found at the business premises of the petitioner. "He drew attention to the statement of Mr. Misra, Inspector/Seizing Officer made during the course of his cross-examination in the adjudication proceedings. He emphasized that the Inspector had admitted that neither any document nor any accounts dealing with the ornaments and articles of gold or manufacture thereof were found nor were implements or instrument or equipment for the manufacture of gold ornaments found in the premises of the petitioner at the time of the search. He also contended that the allegations made in paragraph 7 of the counter-affidavit; to the effect that the seized ornaments were new and in large quantity and, therefore, believed to be "not meant for pawning" "and were of stock and trade" and were kept for sale ; were not borne out from the records of the case. He urged that this was in contradiction to the show cause notice. He argued that the respondents cannot supplement the reasons for confiscation by filing affidavits and relied upon the judgment of the Supreme Court in the case of Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi and Ors., reported in 1978 AIR(SC) 851, 1978 (1) SCC 405, 1978 (2) SCR 272
in support of this contention. According to Mr. Chawla the case of the petitioner is that the seized jewellery were pawned with him and not that they were meant for pawning.
19. In the alternative, Mr. Chawla argued that if it were to be held that the seized gold ornaments did not belong to his customers then, according to him, under the provisions of Section 99 such ornaments as were seized from his business premises have to be presumed to be owned by him unless the contrary was proved. It was contended that in case it was not accepted that the gold ornaments belonged to his customers then by virtue of the provisions of Section 99 they were owned by him and, therefore, he could not be said to be a dealer in respect thereof. It was argued that an individual as an owner was entitled to keep 2000 gms. of gold by virtue of Section 16 (5)(b)(i) of the Act and that admittedly in this case the seized gold was only 569 gms. Therefore, according to him, he was not even required to make any declaration in respect of this gold as is evident from Section 16 of the Act. Mr. Chawla made a pointed reference to paragraph 1 of the reply to the grounds in the counter affidavit (page 85 of the paper book), wherein it is "......submitted that in terms of Section 99 Mr. Baij Nath was rightly considered to be owner of the recovered Gold ornaments.". He pointed out that according to the respondents themselves the petitioner is the owner of the seized gold ornaments and, therefore, it was not open to the respondents to argue contrary to their own pleadings that the petitioner was a dealer in respect of the seized gold ornaments.
20. Another argument raised by Mr. Chawla was that only those gold ornaments in respect of which contravention of any provision of the Act has been, or is being, or is attempted to be made can be confiscated under Section 71 (1) of the Act. He contended that third party goods/gold ornaments cannot be confiscated. In any event, according to him, such contravention has to be established in respect of each of the ornaments which the respondents had failed to do and therefore none of the seized gold ornaments could be confiscated Mr. Chawla relied upon the judgment of the Allahabad High Court in the case of Kashlnath Seth and Anr. v. The Collector, Central Excise, Allahabad and Ors., reported in 1976 AIR(All) 35 in support of his contention that third party goods cannot be confiscated. He also relied upon the judgment of the Allahabad High Court in the case of L. Kashi Nath v. The Collector, Central Excise, Allahabad and Ors., reported in 1972 AIR(All) 16 for the proposition that only those ornaments are liable to confiscation in relation to which a contravention of the provisions of the Act or rule or notification has been established. According to him no such contravention had been established by the respondents in the instant case.
21. Lastly and again in the alternative Mr. Chawla contended that Section 73 of the Act confers discretionary power on the authority concerned to give an option to the owner of the gold ornaments/articles to redeem the same on payment of fine in lieu of confiscation which fine is not to exceed the value of the thing in respect of which confiscation is to be ordered. Mr. Chawla has made a grievance that no such option to redeem the seized gold ornaments on payment of fine was given to the petitioner. He drew attention to the provisions of Section 2 (v)(i) of the Act in support of his argument that such value has to be as on the date of the seizure of the gold. According to him the value of the seized gold ornaments was not even Rs. 12, 000 on the date of the seizure and the maximum fine that could have been imposed could not exceed the aforesaid amount. The authorities thereby caused prejudice to the petitioner.
22. Learned counsel for the petitioner also pointed out that with effect from 6.6.1990 the Act had been repealed. This, according to him, was for the reason that the Act did not serve any socio-economic purpose. He urged that after the repeal of the Act the charge leveled against the petitioner pursuant to the search and seizure on 17.11.1972 would not amount to any contravention or infraction of law. Mr. Chawla, however, conceded that the repealing Act was only prospective and did not effect the action taken against any infraction of the Act at the time when the Act was in force. This is so particularly in view of the provisions of Section 6 of the General Clauses Act.
23. Mr. D.N. Sawhney, learned counsel for the respondents, urged that the question as to whom the seized jewellery belonged and whether it belonged to the petitioner or not was essentially a question of fact and the authorities under the Act have dealt with this question on the basis of some evidence. Therefore, according to Mr. Sawhney, such a finding cannot be assailed under Articles 226 of the Constitution of India. This argument of learned counsel is really in the nature of a preliminary objection. Mr. Sawhney made references to the various portions of the orders of the authorities under the Act. He contended that it was not open to the petitioner to urge that the seized jewellery did not belong to him. He cited the judgment of the Allahabad High Court in the case of Ram Mohan Rastogi v. Union of India and Ors., reported in 1984 Tax. LR 902 in support of his contention that the scope of the proceedings in writ jurisdiction under Article 226 of the Constitution was limited wherein findings on facts cannot be interfered with. It may be noted that this was a case under the Income Tax Act where, under Section 132, the person from whose premises money, bullion and other valuable articles are seized is presumed to be the owner thereof.
24. Mr. Sawhney also referred to a judgment of the Gauhati High Court in the case of Workmen of Dewan Group of Tea Estates v. Presiding Officer, Labour Court of Assam and Ors., reported in 1981 LIC 713 in support of his contention that disputed questions of fact cannot be raised for the first time in the writ proceedings and also that a finding of fact arrived at by the Tribunal as a result of appreciation of evidence cannot be re-assessed in writ proceedings under Article 226 of the Constitution of India. According to Mr. Sawhney the authorities below had decided the question as to whether or not the petitioner was a "dealer" under the Act on the basis of some material and the finding was against the petitioner holding him to be a dealer. According to Mr. Sawhney, this finding was a finding of fact not assailable in these proceedings.
25. In reply to the arguments of Mr. Chawla based on the provisions of Sections 99 and 16 of the Act Mr. Sawhney urged that the object of the Act was prevention of a certain activity; which was that a person should "deal in gold" under certain circumstances or not at all. He pointed out that Section 99 would not come into play in situations such as the present one where the petitioner has been held to be a dealer. Section 99 of the Act reads as under:
"99. Presumption as to ownership of gold-Any person who has in his possession, custody or control any primary gold article or ornament shall be presumed, unless the contrary is proved, to be the owner thereof."
Mr. Sawhney's contention is that in this case the "contrary has been proved" that the petitioner was a dealer in gold without having a valid licence for the same.
26 Lastly Mr. Sawhney contended that the proviso to Section 71 (1) of the Act was of no avail to the petitioner for the reason that the officer adjudicating the confiscation was not satisfied that such gold ornaments belonged to a person other than the petitioner and unless the satisfaction required under the proviso was recorded there was no question of the ornaments not being confiscated. According to Mr. Sawhney, it follows that there was no need for giving any notice to anyone else under Section 79 of the Act.
27. In reply Mr. Chawla argued that the case of the petitioner was that the seized jewellery belonged to 7 persons. Those seven persons had owned that the "confiscated/seized" jewellery belonged to them. They had filed affidavits which ware uncontroverted. Nothing had been brought on the record to shake the veracity of those affidavits. Mr. Chawla pointed out that these affidavits had been filed even before the show cause notice was issued to the petitioner. He again contended that the only charge against the petitioner was as contained in the show cause notice; the very basis of which was that the seized ornaments belonged to the customers of the petitioner i.e. third parties and were not of the petitioner. He pointed out that if it was not open to the petitioner to urge that the seized ornaments did not belong to him; as was strongly contended by learned counsel for the respondent; then Section 99 and 16 come to his rescue.
28. It would be apposite to first deal with the argument of Mr. Sawhney noticed in paragraphs 23 and 24 above. It is important to note that the question involved in the case is whether the petitioner was a 'dealer' and not whether the seized jewellery belongs to him. Therefore, the judgment in the case of Ram Mohan Rastogi (Supra) is not of much assistance to the respondents. Similarly, the judgment in the case of the Workmen of Dewan Group of Tea Estates (Supra) is also not of much assistance. In my view what has to be seen is whether the petitioner answers the definition of 'dealer' on the admitted facts and the facts on the record and this is not a question or a finding of fact but question of law.
29. The jurisdiction of the High Court under Article 226 is not hide-bound. It is meant to give effective relief. This jurisdiction is not ousted merely because a question of facts is raised. In the instant case, however, the finding of the authorities under the Act that the petitioner is a dealer cannot be said to be a finding of fact. There is no finding by any of the authorities under the Act that the petitioner received any remuneration or any other consideration as contemplated under Section 2 (h) of the Act which defines "dealer". On the facts of the instant case without such a finding it could not be held that the petitioner was a dealer in gold. There is merit in the argument of Mr. Chawla that there is no bar on accepting gold ornaments on pledge or keeping them as pawned articles for lending money on the strength of such security. This is also not a case of purchase or sale of gold or gold ornaments.
30. Before proceeding further it may be observed that the dismissal of the appeal vide Annexure 'M' without even affording a hearing to the petitioner was not the right thing to do. It is obvious from the appellate order that the delay was caused not on account of the petitioner but because the petitioner's file had been wrongly delivered to some-one else by the clerk of his Advocate. The observation of the Appellate Authority that "counsel need not have waited till the last" is contrary to the settled law that the delay has to be explained only after the limitation has expired and no explanation need be offered as to what was being done "till the last". The rejection of the appeal on the ground that it was time barred was, therefore, incorrect in law. The revisional authority fell into the same error and the dismissal of the revision petition being Annexure 'O' was also wrong.
31. Mr. Sawhney, learned counsel for the respondent did not dispute that in view of the proviso to Section 71(1) of the Act the gold jewellery of a third party cannot be confiscated and if such confiscation has to be done it can only be done after notice to those persons under Sections79. Admittedly no such notice was issued under Section 79. The contention on behalf of the respondent that there was no need to issue any such notice because the proviso to Section 71(1) was not applicable does not stand the test of scrutiny. The very basis of the show cause notice was the statement of the petitioner that he received gold jewellery from his customers either for repairing/polishing or on pawn as security for lending money. This pre-supposes that the seized jewellery belonged to such customers and not to the petitioner. The inference on the basis of the above fact that it amounted to admission on the part of the petitioner that he was a dealer in gold is neither intelligible nor logical nor does such an inference follow by necessary implication.
32. The stand of the respondent that the petitioner is the owner of the seized jewellery is also not tenable. The 7 persons who filed affidavits stating that they were the owners of the seized/confiscated jewellery remained uncontroverted. It is, therefore, not possible to doubt the veracity of those affidavits. During the personal hearing afforded to the petitioner by the Adjudicating Officer two persons had even produced their accounts and registers showing the entries regarding the ornaments having been pledged with the petitioner or having been given to the petitioner for getting them polished. This has already been noticed by me in paragraph 9 above. No evidence has been brought on record by the respondents herein to controvert these facts. There is merit in the argument that the statement of the Inspector/Seizing Officer made during the course of cross-examination in the adjudication proceedings supports the petitioner. The Inspector had admitted that neither any document nor any accounts showing dealings in ornaments and articles of gold or manufacture thereof were found at the time of the search. Similarly, no implements or instruments or equipment for the making of gold ornaments were found in the premises of the petitioner during the search.
33. The contention on behalf of the respondent that the petitioner was the owner of the jewellery and the argument on behalf of the petitioner herein based on Sections 99 and 16 of the Act are not very material for deciding this case. In a proprietary concern, like in the instant case, a person can be a dealer in gold jewellery inspite of being an owner thereof. In such a business the proprietor owns all the stock-in-trade. In such cases ownership and dealership may coincide. It is equally possible that a person may be a
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'dealer' even in respect of ornaments of third persons. This is evident from the perusal of definition of dealer in Section 2 (h) of the Act. The case against the petitioner is of dealership in respect of the ornaments of third persons as is evident from the show cause notice. The case set up against him was not that he was the owner of the confiscated jewellery. There is no finding that the petitioner received any remuneration and, therefore, he does not answer the definition of dealer under the Act. The stand of the respondent in the counter affidavit that the confiscated jewellery was the stock-in-trade and was presumed to be for sale and were not pawned articles cannot be accepted for the reasons that this was not what was stated in the show cause notice and the respondents cannot be allowed to change their stand. This stand, apart from being contrary to the show cause notice is also not sustainable in view of the facts and the evidence adduced by the petitioner before the adjudicating officer, which went uncontroverted. 34. I am, therefore, of the opinion that the seized/confiscated jewellery belonged to the customers of the petitioner. The petitioner could be a dealer of these jewellery also but since there is no finding that he received any remuneration himself either for getting them repaired or for having them polished, therefore, he is not a dealer as per the definition of that word under the Act. In any event since I have held that the jewellery in question belonged to the customers of the petitioner, the proviso to Section 71 (1) of the Act comes into operation and it was imperative for the persons owning such jewellery to be issued notice under Section 79 of the Act before such jewellery could be confiscated Not having done so the confiscation of the jewellery is illegal. The adjudication officer had wrongly come to the conclusion that the gold belonged to the petitioner The argument advanced on behalf of the respondents that therefore the proviso to Section 71 (1) of the Act is not attracted cannot be accepted. 35. It is only if the petitioner were a dealer dealing in gold without a valid licence under the Act, could action have been taken for confiscation of the articles/jewellery. Even if a person is a dealer having a valid licence and some articles of jewellery are not accounted for, those articles can be seized/confiscated. The judgments of the Allahabad High Court in the case of L. Kashi Nath (supra) would apply to such cases. However, this is not very material since in my view the petitioner was not a dealer. Even if he were a dealer the seized/ confiscated jewellery in respect of which he could be said to be a dealer belong to third parties and were not liable for confiscation in view of the proviso to Section 71(1) of the Act without notice under Section 79. In the instant case there has been no contravention of the provisions of Section 27 for any confiscation under Section 71 or for imposition of penalty under Section 74. In view of the foregoing it is not necessary to deal with the argument on behalf of the petitioner based upon Section 73 of the Act or the repeal of the Act. 36. I accordingly allow the writ petition. The Rule is made absolute. Annexures 'D', 'J', 'M' and 'O' are quashed. The respondents are directed to release the gold jewellery weighing 569 grams seized on the 17th of November, 1972 during the course of search operations at the premises of the petitioner. The penalty of Rs. 500 is also cancelled. There will be no order as to costs.