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Are you talking about a player dropping one, or an enemy?
As the others said, it was a special drop during the "Loot Hunt" event. Those versions are just normal guns that can be dropped, traded, etc. Lots of people picked some up during that event, and no doubt there are plenty of duped copies of some of those floating around. And it's probably possible to create that version of the GN in Gibbed, so there are probably plenty of those around too.
So, if you saw a player drop a GN, it was probably one of those. That particular GN may or may not be "legitimate", but ones like that do exist.
If you saw an enemy drop a GN, it was dropped by the Gold Golem during the "Loot Hunt" event. If you saw anything else drop it, or it was dropped at some other time, that was not legitimate.
Are you sure it was an Iron GOD? The Gold Golem is the one that dropped it, and, AFAIK, he doesn't become an Iron GOD.