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2017 (3) TMI 1487 - HC - VAT and Sales TaxCompounding of offences - KVAT Act - For compounding an offence, which of the compounding fees should be paid by the assessee: the one prevailing when the evasion took place or the one prevailing at the time of actual compounding? Held that: - If it is a continuing offence, the penalty applicable at the terminus is the penalty the erring assessee shall be mulcted with - If it is non-recurring (for want of a better expression), the liability stipulated when the offence has been committed alone shall apply. We shall, in a while, examine whether either of these contingencies applies to the case on hand. Compounding is in relation to an offence; what was imposed, however, is fee. No quarrel can we have with the proposition that imposing fee is a taxing aspect of the State under Article 265 of the Constitution of India. Equally indisputable is that fee can be levied even retrospectively as it falls beyond the mischief of Article 20(1) of the Constitution, which concerns punitive sanctions: punishment and penalty, neither of which is fee. Viewed alternatively, we may, before parting with the matter, observe that the appellant has not made out any positive case that the nomenclature notwithstanding, what is being collected is penalty rather than fee. The compounding fee as prevailing at the time of the assessee’s deciding to pay it shall alone apply - appeal dismissed - decided against appellant.
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