JUDGMENT : R.N. Misra, J. - This is an application for a writ of certiorari asking for quashing of the order dated 12-7-1973 passed by the Assistant Collector, Central Excise. Cuttack (opposite party No. 2) imposing on the Petitioner a penalty of Rs. 1,000/- u/s 74 of the Gold (Control) Act of 1968 (hereinafter referred to as the "Act"). 2. Petitioner is a dealer in silver and gold and is duly licensed as a dealer in gold under the Defence of India Rules, 1963 and thereafter under the Act. Prior to the Act, there was no statutory provision regarding precautions to be taken by a licensed dealer in gold in the matter of purchase of gold. For the first time under the Act, provision was made u/s 100 to the following effect: Every licensed dealer or refiner of certified goldsmith shall, before accepting buying or otherwise receiving any gold from any person, take all reasonable steps to satisfy himself as to the identity of such person and if, after an inquiry made by an officer authorised in this belief by the Administrator, it is found that such person. is not either readily traceable or is a fictitious person, it shall be presumed, unless such dealer or refiner or certified goldsmith, as the case may be, established that he had taken all reasonable steps to satisfy himself as to the identity of such person, that such gold was brought, acquired, accepted or received by such licensed dealer or refiner or certified goldsmith, as the case may be in contravention of the provisions of this Act'. The vires of the Act was challenged before the Supreme Court in the case of Gannon Dunkerley and Co., Ltd. Vs. Union of India (UOI). The Court upheld the constitutional validity of the statute in general, but dealing with Section 100, as extracted above, held: This section imposes a statutory obligation upon a dealer to take all reasonable steps to satisfy himself as to the identity of persons from whom any gold is bought. The section does not specify the nature of steps which a dealer should take for satisfying himself as to the identity of the person from' whom any gold is bought. The statutory obligation imposed by the section is uncertain and incapable of proper compliance. The section does not specify the nature of steps which a dealer should take for satisfying himself as to the identity of the person from' whom any gold is bought. The statutory obligation imposed by the section is uncertain and incapable of proper compliance. It must be held that the section imposes an impossible burden upon the dealers and constitutes an unreasonable restriction. Section 100 of the Act was amended by Central Act 26 of 1969 to the following effect: Precautions to be take by a licensed dealer, refiner, or certified goldsmith before acquiring any gold: (1) Every licensed dealer or refiner or certified goldsmith, as the case may be, shall before accepting, buying or otherwise receiving any gold from any person, take such steps as are specified by the Central Government by rules made in this behalf, so satisfy himself as to the identity of the person from whom such gold is proposed to be accepted, bought or otherwise received by him. (2) If on an inquiry made by a Gold Control Officer the person from whom a licensed dealer or refiner or certified goldsmith is purported to have accepted, bought or otherwise received any gold is nut found at the address mentioned by the licensed dealer, If finer or certified goldsmith or at any other address ascertained from the first-mentioned address, the Gold Control Officer may call upon such dealer, refiner or certified goldsmith, as the case may be, to establish that he had taken the steps specified by the rules made under Sub-section (1). (3) If such dealer, refiner or certified goldsmith, as the case may be omits or fails, when called upon so to do, to establish that he had taken the steps specified by rules made under Sub-section (1), it shall be presumed, until the contrary is proved, that such gold was accepted, bought or otherwise received by such dealer, r? finder or certified goldsmith; as the case may be in contravention of the provisions of this Act. (4) Nothing in this section shall apply to a petty transaction. Explanation : In this section, 'petty transaction' means a transaction in which the total weight of any primary gold, article or ornament which is accepted. bought or otherwise received from the same person in the course of a day, does not exceed twenty-five grammes. (4) Nothing in this section shall apply to a petty transaction. Explanation : In this section, 'petty transaction' means a transaction in which the total weight of any primary gold, article or ornament which is accepted. bought or otherwise received from the same person in the course of a day, does not exceed twenty-five grammes. The Gold Control (Identification of Customers) Rules, 1969 (hereinafter called the "Rules"), have been framed u/s 100(1) of the Act. Under the Rules detailed provisions have been made regarding conditions of acquisition sale, etc. of gold by a licensed dealer or refiner and the particulars to be obtained in each voucher have also been prescribed. Rule 3(2) of the Rules provides: Before accepting, buying or otherwise receiving any gold from a customer, licensed dealer shall, in every case (a) obtain on voucher, the signature and full postal address of the customer; (b) where the licensed dealer's satisfaction as to the identity of the customer is based on the identification made by another person, obtain on the voucher the signature and full postal address of such identifier, and where such identifier is not personally known to him, he shall also note on the voucher, the particulars of the documents on the strength of which he has been satisfied as to the identity of such identifier; (c) where the licensed dealer's satisfaction as to the identity of the customer is based on any other document, note on the voucher, the date and other particulars of such document. 3. On 29-12-1969, officers under the Act inspected the business premises of Petitioner and took possession of certain gold vouchers under which Petitioner had purchased gold ornaments. In July, 1972, a notice was issued to Petitioner calling upon it to establish within ten days of receipt of the said notice that Petitioner had taken steps specified in the Rules made u/s 100(1) of the Act in respect of these purchases. On receipt of the said notice, Petitioner submitted a written reply on 31-7-1972 in which it was pointed out that the vouchers which were in possession of the department would themselves show that Petitioner had taken necessary steps as required under the Act and the Rules and there was no violation. On receipt of the said notice, Petitioner submitted a written reply on 31-7-1972 in which it was pointed out that the vouchers which were in possession of the department would themselves show that Petitioner had taken necessary steps as required under the Act and the Rules and there was no violation. A fresh notice was issued to Petitioner to show cause why the explanation given by Petitioner earlier should not be rejected as the identifiers were unable to furnish the changed addresses of the customers and to produce the customers before the Gold Control Officer. On receipt of the said notice, Petitioner submitted a further reply on 27-1-1973 in which it was explained that Petitioner had taken all steps required by the Rules and, therefore, had no further responsibility in the matter. Opposite party No. 2 rejected Petitioner's explanation and imposed a penalty of Rs. 1,000/- u/s 74 of the Act by the impugned' order which Petitioner received on 4-8-1973 (Annexure. 6). The said order is assailed before us in this proceeding. 4. According to Petitioner, opposite party No. 2 misconstrued the provisions of Section 100 and the Rules made thereunder and committed a grave error apparent on the record in casting an additional liability on Petitioner in excess of the requirement of the Rules. Since the relevant provisions of the statute were penal; a strict view of the law had to be taken and the impugned order, therefore, is not tenable in law. Opposite party No. 2 has, as a fact, found in paragraph 5 of the impugned order: It would, therefore, appear that though the provisions of Section 100(1) were observed in paper by M/s. Alankar, the spirit of the rule has not been earned out. In view of the aforesaid finding, it must follow that the requirements of the statutory provisions have been complied with by Petitioner. Once that it has been done and it is not found by the authority concerned that Petitioner entered into clandestine transactions by giving a show of genuineness in the documents, we do not think, a case for imposition of penalty is made out. As has been indicated by the Supreme Court in the case of Hindustan Steel Ltd. Vs. State of Orissa merely because a penalty is exigible under the statute in particular circumstances of a case, it is not mandatory that the penalty shall be imposed. As has been indicated by the Supreme Court in the case of Hindustan Steel Ltd. Vs. State of Orissa merely because a penalty is exigible under the statute in particular circumstances of a case, it is not mandatory that the penalty shall be imposed. Where the statute provides for the imposition of a penalty, the department before imposing the penalty must establish the facts clearly authorizing imposition thereof. In the facts of this case, we are satisfied that there is no justifications for imposition of any penalty. We accordingly direct that a writ of certiorari shall issue to quash the impugned order. We make no direction as to costs. K.B. Panda, J. 5. I agree.