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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 ..... 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 Rs. 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 order dated 4/5/2016. Petitioner preferred a revision along with an application to condone delay. In the meantime, the 1st respondent issued notice u/s 25(1) of the Act to reopen the assessment despite the objection filed stating that he was forced to compound the matter under pressure from the department officials. The assessment was reopened and as proposed in the notice, an order dated 6/5/2016 has been passed which is produced as Ext.P6. Petitioner again filed rectification application on 19/1/2016. In the meantime, further proceedings were taken by the department for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Trichur Auto Spares (supra). In so far as the suppressed turn over was made known to the assessee by the authorities after which the assessee accepted the offence and agreed to compound the offence and the assessee did not chose to file any appeal or pay the amounts determined as compounding fee, the dictum in Jaya Jewellers (supra) clearly applies and accordingly, the writ petition was dismissed. 7. Learned counsel for the appellant submits that there is a conflict of opinion between the two judgments viz. Jaya Jewellers (supra) and Trichur Auto Spares (supra). 8. In Jaya Jewellers (supra) the business premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee 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 would be the contention that while the assessee has admittedly compounded the offence, the department has no right to demand or collect any amount towards compounding fee, as is in excess of what is authorised by the statutory provision." 10. It is apparent from the aforesaid two judgments that there is a conflicting view. In Jaya Jewellers (supra) it is held that once a compounding is accepted, the order cannot be challenged at all whereas in Trichur Auto Spares (supra), another Division Bench observed that the legal justification for preferring an appeal against a compounding offer would be the contention of the assessee that while admitting compoundi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, 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, a sum of money not exceeding ten thousand rupees: Provided that the Commissioner may by order authorize any officer to compound the offence under this section on payment of a reduced amount. (2) On payment of such amount under subsection (1), no further penal or prosecution proceedings shall be taken against such person, in respect of that offence." 14. This provision enables the assessing authority or other officer authorized by the Government to accept from any person who has "committed or is reasonably suspected of having committed an offence under the Act other than exempted provisions, by way of compounding of such offence" and if compounding is ordered, on payment of such amount under subsection ..... X X X X Extracts X X X X X X X X Extracts X X X X
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