Gregory Torney, 32, appeared in Warrnambool Magistrates Court on Friday where he made a successful self-represented bail application.

The court heard the man attended Warrnambool Diving and Firearms in Fairy Street on Wednesday about 10.30am and handed in a semi-automatic 22-carbine Sturm Ruger rifle.

A staff member identified the firearm as being stolen and called 000.

Police attended and located Mr Torney outside the store.

The court heard he wouldn't disclose any details about the firearm and believed he didn't have to under Australia's permanent national firearm amnesty.

Detective Senior Constable Richard Hughes, of the Warrnambool police crime investigation unit, said the rifle was seized and was pending forensic testing.

He alleged the firearm was stolen from a property in North Warrnambool overnight on June 13.

The firearm was locked in a case which was chained to a seat and concealed inside a vehicle parked in the driveway of a private residence.

Detective Senior Constable Hughes said there was no forced entry to the vehicle but the case was prised open.

He said the victim noticed the firearm was missing at 8am the following day.

The detective said an individual DNA swab was taken from the firearm and had been sent off for forensics alongside Mr Torney's DNA to see if there was a match.

Mr Torney has not been charged with the theft of the firearm.

He is a prohibited person under the Firearms Act.

The court heard Mr Torney later attended Warrnambool police station and spoke to a detective.

He would not disclose who or where he obtained the gun from but that he was asked to get rid of it through the firearm amnesty.

Detective Senior Constable Hughes said inquiries with Victoria Police's licensing and regulation division revealed the amnesty didn't cover matters relating to indictable offence, where an accused has the right to have the matter heard before a judge and jury.

He said that at the time of the offending, Mr Torney was on summons charged with making threats to kill, destroying property, unlawful assault and possessing a controlled weapon.

Detective Senior Constable Hughes said Mr Torney was observed by police walking on the north side of Lava Street on Friday shortly before 11am.

He said he was found in possession of a "mid-size steak knife".

He was arrested and charged with weapon and other offences.

On Friday, Mr Torney told the court he had spent a long time in custody.

He said he'd only been in the community for about 15 months.

"The longest I've been out (of jail) before this time is three months since juvenile," Mr Troney said.

"I'm a little bit institutionalised."

Magistrate Peter Mellas said the man had community support and a stable residence, among other things.

He granted the man bail with strict conditions.

Mr Torney will appear in court again in October.

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