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TMI Blog2018 (3) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner in WP(C) No.806/2017 is the appellant. He challenges judgment dated 20/1/2017 by which the writ petition was dismissed. 2. The short facts involved in the writ petition are as under:- The petitioner challenged Ext.P6 order by which the assessing authority viz., the Commercial Tax Officer, Kollam passed an order of assessment for the assessment year 2014-15. Petitioner contended that his business place was inspected by the intelligence wing of Commercial Taxes Department on 13/10/2014. The entire stock found during the inspection were recorded and thereafter the books of accounts were verified by the Intelligence Officer. Petitioner submits that to avoid unpleasant consequences, he applied for compounding the offence in lieu of penalty. He remitted an amount of ₹ 8 lakhs u/s 74 of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as the Act) as compounding fee/tax. Ext.P1 is the said order. Petitioner preferred an application for rectification on the ground that the compounding fee was fixed on the basis of valuation of stock at MRP rate. In the absence of any provision for rectification, the 2nd respondent rejected the said application as per Ext.P2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Ker)] in order to contend for the position that when there is patent mistake in the quantification of the compounding fee payable, the assessee can contest the order of the competent authority in an appeal u/s 55 of the Act. 5. On the other hand, learned Government Pleader placed reliance upon judgment of another Division Bench in Jaya Jewellers v. Commissioner of Commercial Taxes decided as per judgment dated 20/9/2007 in WP(C) No.19641/2003 wherein the Division Bench held that when the assessee makes an application to compound the offence departmentally, it is for the prescribed authority to determine whether the offence should be compounded or not. The process of compounding would be complete only when the money offered is accepted by the authority concerned. Once the compounding of the offence is complete, the person who has committed or reasonably suspected of having committed an offence under the Act cannot be an aggrieved person. 6. Learned Single Judge found that in so far as the petitioner had accepted the offence and agreed for compounding, which resulted in Ext.P1 order, the rectification application is not maintainable even going by the dictum laid down in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the offence alleged to have been committed by it. Once it does that, the competent authority proceeds to determine the compounding fee payable by the assessee in accordance with clause (a) or (b) of sub-section (1) of the said Section. We feel that in such a situation, it will not be open to an assessee who opts for compounding under the said Section, and thereby avoids adjudication proceedings for penalty and prosecution under the Act, to turn around and contest the order of the competent authority accepting its application for compounding the offence. We are of the view that the scheme of composition of offences under Act does not permit an assessee to approbate and reprobate. No doubt it may be open, in cases of patent mistakes in the quantification of the compounding fee payable, for an assessee to contest the order of the competent authority in an appeal under S.55 of the Act but that recourse can be had only in cases where the mistake is one that is relatable solely to the quantification of the compounding fee and does not militate against the admission by the assessee of its having committed the offence alleged against it. The legal justification for such an appeal wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Under Section 55, any person aggrieved by the order issued or proceedings recorded other than those under various other provisions could prefer an appeal within a specified time. There is no provision which indicates that no appeal could be filed against an order passed u/s 74. Section 74 of the Act reads as under:- 74. Composition of offences.-- ( 1) The assessing authority or other officer or authority authorized by the Government in this behalf may accept from any person who has committed or is reasonably suspected of having committed an offence against this Act, other than those specified under clause (3) of sub-section (1) or clauses (b), (c) or (d) of sub-section (2) of section 71, by way of compounding of such offence:- ( a) where the offence consists of the evasion of any tax payable under this Act, in addition to the tax so payable a sum of money equal to the amount of tax so payable subject to a minimum of rupees five hundred and maximum of rupees eight lakh: and [Provided that the maximum compounding fee collectable against a single offence spread over several return periods in a financial year shall be two lakh rupees]. ( b) in other cases, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner is admitting that there was irregularity in maintaining true and correct accounts and also the turnover. Therefore, when the petitioner compounds the offence, he is admitting two aspects. One is that he did not maintain true and correct accounts and secondly he agrees with the actual turnover suppression. In Jaya Jewellers (supra), Division Bench held that when these facts are not disputed and the compounding application is filed without any coercion, no challenge can be made by filing appeal. 16. In Trichur Auto Spares (supra), the Division Bench only held that only in case of patent mistakes in the quantification of compounding fee payable, the assessee could contest the order of the competent authority in an appeal u/s 55 of the Act . It is also further held that such recourse can be had only in a case where the mistake is one that is relatable solely to the quantification of the compounding fee and does not militate against the admission by the assessee of having committed the offence alleged against it. Therefore, the only issue on which an appeal could possibly arise is (1) a patent mistake by the competent authority in arriving at the compounding fee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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