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TMI Blog1998 (8) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the books and verification of the stocks, the petitioner had the assistance of one Sri S.G. Udayar, a sales tax practitioner, who according to the respondents scribed a statement on behalf of the petitioner, and signed by Sri Phasalkar, its partner. The verification of the stocks and the books maintained by the petitioner disclosed that 179 cases of liquor valuing Rs. 71,600 and involving an estimated tax payment of Rs. 25,000 had not been duly accounted for. No bills for the purchase of the said excess stock were produced by the petitioner. The respondent was therefore of the opinion that the petitioner had not maintained true and complete accounts and in the process fraudulently evaded the payment of tax due to the State contrary to section 29(1)(e) and 29(2)(c) of the Act. A notice dated June 23, 1989 to this effect was issued to the petitioner, in which the above violations were pointed out besides stating that the department proposed to launch a prosecution against the petitioner for the offences committed by it. The notice gave an opportunity of being heard to the petitioner before the proposed penal action was initiated. In response, the petitioner offered to compound ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compounded the same departmentally the petitioner cannot turn round and question the factual foundation on which such violations were alleged. If the petitioner disputed the conclusions arrived at by the respondent on the basis of his inspection and verification, it could have done so on receipt of the notice, which proposed to initiate prosecution proceedings against it. Instead of doing so, the petitioner readily offered to departmentally compound the offence upon payment of the amount mentioned therein. This offer implied an unequivocal admission of the findings recorded on the basis of the verification. It is not therefore permissible for the petitioner to question the correctness of the said findings in the extraordinary writ jurisdiction of this Court, which the court can decline to exercise in cases where the petitioner has acquiesced in the proceedings and even consented to the passing of the order, which it now seeks to avoid. The scope of judicial review is limited in such situations only to finding out whether on the facts admitted the order under challenge could have been made. That however is different from assailing the factual foundation on which the order is passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was issued to it. It bears a copy of the notice issued to the petitioner in which the petitioner was informed about the violations alleged against it, and the action proposed to be taken in the matter. The receipt of this notice has been acknowledged by the petitioner in the application for composition filed on its behalf. That being so, it is difficult to see how the petitioner can dispute either the issue or the receipt of the notice in question. From the notice the petitioner had a clear idea of what was in store for it if the violations were not departmentally compounded. Its offer for a settlement of the issue, does not suggest any misapprehension as to the nature of the allegations or the offences for which it was sought to be prosecuted. This was in my opinion a sufficient compliance with the requirement of fair play in action. No further notice before the acceptance of the offer made by the petitioner was necessary. Reliance by Mr. Gandhi, upon the decision of a single Bench of this Court in K.M. Puttaswamy v. Commercial Tax Officer (Intelligence), Mysore Circle, Mysore [1988] 68 STC 241, is misplaced. In that case the business premises of the petitioner was visite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sore [1973] 32 STC 596. Dealing with the decision Babu, J., in Gayathri Oil Industries v. Commercial Tax Officer (Intelligence)-II (W.P. Nos. 800 to 806 of 1989 dated March 17, 1990) observed as under: However, the learned counsel for the petitioner relied upon the decision of this Court in Puttaswamy v. Commercial Tax Officer [1988] 68 STC 24 to contend that such notice is required. I am afraid and with great respect to the learned Judge, the view expressed there is not in consonance with the Division Bench rulings referred to above and hence the question of notice in the matter of composition does not arise at all. When an offer is made by the dealer for composition which is accepted by the authorities to except a notice as contended on behalf of the petitioners is fundamentally incorrect. 6.. I have therefore no difficulty in rejecting the submissions made by Mr. Gandhi that any further notice was required to be given to the petitioner before the offer made by it could be accepted. 7.. It was lastly contended by Mr. Gandhi, that the recovery of a sum of Rs. 37,500 towards the compounding fee was legally bad being in excess of the maximum prescribed by section 31 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding one hundred rupees during the period of the continuance of the offence. 9.. Section 31 of the Act, deals with composition of the offences and, inter alia, provides that the prescribed authority may accept from any person who has committed or is reasonably suspected of having committed any offence punishable under the Act by way of composition of such offence, in addition to the tax or amount not paid or evaded to be paid a sum of money not exceeding Rs. 1,000 or double the amount of tax or amount so remaining unpaid or evaded to be paid whichever is greater where the offence committed is under clause (d) of subsection (1) of section 29 or clause (c) of sub-section (2) of section 29. In all other cases, compounding fee cannot under section 31(b) exceed Rs. 1,000. 10.. In the present case, in so far as the offence punishable under section 29(2)(c) was concerned the composition fee for the same could be a sum of Rs. 1,000 or double the amount of tax or the amount remaining unpaid or evaded whichever was greater. The amount of tax which the petitioner was alleged to have evaded was estimated by the respondent at Rs. 25,000. The composition fee could therefore extend up to a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omes the basis of an order of composition tantamount in law to the acquittal of the dealer from the charge against him cannot be withdrawn by the person making the same, except in cases where the admission is found to be vitiated by fraud or any other legal disability. Generally speaking such withdrawals, cannot be permitted in the courts writ jurisdiction under article 226 particularly when the same involve disputed questions of fact and have the effect of depriving the department of the option of prosecuting the dealer which it would have done but for the order of composition made at his instance. Having benefited from an order invited by him by inducing the opposite party to agree to a composition the dealer cannot avoid the consequences by merely contending that the basis on which the composition had been offered by him and accepted by the prescribed authority, did not exist. 13.. The decision of this Court in Assistant Commercial Tax Officer (Intelligence) v. N.N. Jariwala [1992] 86 STC 229; ILR 1991 Kar. 4414, relied upon by Mr. Gandhi, does not lead any assistance to him. All that the same lays down is that if the amount of composition fee recovered is in excess of what i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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